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  #1  
Old Posted Nov 24, 2016, 10:01 PM
geotag277 geotag277 is offline
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AirBnb and Canada

Over the last few years, AirBnb has gone very mainstream, with deep roots into major Canadian markets like Vancouver and Toronto.

This has had a controversial impact to markets, with unregulated short term stays causing concern from neighbours, to reducing housing supply for residents, to competing with hotels on an unregulated basis similar to Uber versus taxis.

Toronto recently convicted an AirBnb user of zoning violations.

https://www.thestar.com/business/rea...irbnb-era.html

New York recently implemented severe restrictions on AirBnb as well:

http://www.nytimes.com/2016/10/22/te...rbnb.html?_r=0

There are anecdotes about several new condos being nothing more than hotel platforms for AirBnb, much to the dismay of residents (like ICE Towers in Toronto).

How has AirBnb affected your city? Do you agree with how they currently operate their business? Do you want to see legislation in your city to restrict and regulate how AirBnb is used?
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  #2  
Old Posted Nov 24, 2016, 10:30 PM
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There isn't a whole lot of difference between condos being used as corporate/executive suites for the last 25 years and airbnb. For sure these guys should comply to all codes and regulations
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  #3  
Old Posted Nov 24, 2016, 10:40 PM
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Stayed at an actual BnB in Nova Scotia once booked via AirBnB and they said it was the best thing ever for their business. I've stayed in dozens of AirBnbs in six different provinces and have never really had much of an issue at all. From condos to spare bedrooms to couches (although that one was in New York before the restrictions). I know of condos that really dislike the coming and going of traffic but from my eye it seemed like they disliked their exclusivity being opened up to outsiders more than the actual practice.
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  #4  
Old Posted Nov 25, 2016, 12:01 AM
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I have personally seen all sides of this issue.

I know an armchair data scientist who used web scraping technology to reveal that a significant chunk of Vancouver's "whole house" (i.e. you rent the whole house, not a room in a house) AirBnBs are up for grabs for the majority of the year. In other words, these are units that nobody lives in. He is quite vociferous in his opposition to AirBnB, and says that it really contributes to the vacancy problem in the city. His argument is bolstered by the fact that he uses empirical data, not just anecdotes.

Now for some anecdotes.

I also know some well-to-do homeowners who would like to make some extra money off their property, and have converted their basements into AirBnBs. Two of them used to rent their basements out to tenants who signed leases; the other just had extra basement space that he renovated to raise his resale value, but didn't ever want to commit to being a landlord. In all cases, these homeowners are either getting out of, or never got into, the landlord game because they want the flexibility of using their own living space, don't really want to deal with the hassle and wear and tear of tenants and felt that they were well off enough not to rely on rental income. On the other hand, they have just taken 2 two bedroom rental units out of the city's stock. These are the people who my data scientist friend would rail against, but I understand where they're coming from too.

Finally, I have a good friend, who actually was in financial dire straits, who listed her apartment on AirBnB. She would sleep on the couch and rent her bedroom out to guests. It worked really well for her until her property manager got notice of this and promptly evicted her. I am not entirely unsympathetic to the claims of the property management company, either: non-tenants had access to the building and its common areas; you could argue that having enough people run AirBnBs in their own apartments would create a sort of transient environment with people coming and going at all hours, overusing the common laundry facilities, etc., etc.

As with all complex problems where you hear more than one side, I'm unsure of whether AirBnB is "good" or "bad" for the city as a whole. While I don't think it should be outlawed, I don't think it should be encouraged. I would require hosts to pay taxes and keep records.
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  #5  
Old Posted Nov 25, 2016, 12:19 AM
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Originally Posted by hipster duck View Post
It worked really well for her until her property manager got notice of this and promptly evicted her.
If this story of yours is taking place in Canada, then it's definitely not taking place in Quebec.
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  #6  
Old Posted Nov 25, 2016, 12:20 AM
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In Ontario, there was a private member bill proposed to regulate the sharing economy and IIRC, the proposals for Air Bnb was for it to be legal but for homeowners to have a cap on the number of days they're allowed to rent out--I think it was something like 90 days per year, tops.
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Old Posted Nov 25, 2016, 12:22 AM
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Originally Posted by lio45 View Post
If this story of yours is taking place in Canada, then it's definitely not taking place in Quebec.
or Ontario.. although we're not as bad. Here it largely depends on how much of a workload the local branches of the Ontario Tenancy Board have, so it varies by city. In Kingston it typically takes about a month to process an eviction, although a savvy tenant can still use legal tactics to bog it down for quite some time.
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  #8  
Old Posted Nov 25, 2016, 12:30 AM
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Well, by "promptly evicted her", I mean they promptly served notice that they would evict her within some time period (30 days, maybe? I can't recall). Not that they threw her belongings on the street.
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  #9  
Old Posted Nov 25, 2016, 12:43 AM
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Originally Posted by hipster duck View Post
Two of them used to rent their basements out to tenants who signed leases; the other just had extra basement space that he renovated to raise his resale value, but didn't ever want to commit to being a landlord.
I could be wrong but my impression is that issues like like Airbnb, laneway houses, empty condo flipping, and basement apartments get too much airtime and not enough people ask why the city doesn't have much large-scale rental construction and doesn't seem overly concerned about anything beyond boutique affordable housing projects.

As of 2015, the City of Vancouver had only 1% more purposefully-built rental units than it had in 1994! This is probably more relevant to tenants' woes than Airbnb rentals (306 Airbnb listings appear for Vancouver right now).

Generally speaking I'd rather rent a purpose-built apartment in a professionally-managed rental building than rent some portion of a house from a random homeowner, or rent a condo from an absentee owner. The small-time landlords are likelier to be quirky and break the rules. Airbnb imposes some extra regulation and accountability on people renting out units.

On the flip side, I think a lot of people underestimate how much work is involved in being a landlord and following all the rules, and how bad tenants can be.

Laneway houses meanwhile cost more to build than larger and more fully-featured apartment units.
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  #10  
Old Posted Nov 25, 2016, 12:59 AM
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Originally Posted by hipster duck View Post
Well, by "promptly evicted her", I mean they promptly served notice that they would evict her within some time period (30 days, maybe? I can't recall). Not that they threw her belongings on the street.
On a specific lease provision, I imagine, but I'm not sure what it would be. It wouldn't be a case of subletting if she was still staying there. Perhaps a prohibition on using the flat for commercial purposes?
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  #11  
Old Posted Nov 25, 2016, 1:18 AM
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I always use airbnb when I travel. It's great, and I'll fight anyone who disagrees. Vancouver has been Swiss cheese with vacant units for ten years, airbnb didn't invent that situation, inflationary property values did. If people can monetize their idle investment while they sit on it, and people can actually use the spaces--even if only temporarily--and coal harbor become less of a ghost town, that's a win all around.

The last airbnb I stayed in was a room in a 2br condo in Toronto. The couple who owned it were able to afford more condo than they otherwise might have because they could airbnb their extra room until they achieved it. And since nobody makes rentals anymore, as someone123 pointed out, more young people are forced into buying and being stuck with their investment past it being useful to them. Or struggling to afford a bigger place earlier.
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  #12  
Old Posted Nov 25, 2016, 1:46 AM
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Originally Posted by someone123 View Post
(306 Airbnb listings appear for Vancouver right now)
Not sure where you got this 306 number, but I checked a random weekend in December and there were over 2000 listings available for Vancouver alone. AirBnb (understandably) doesn't make it easy to see the exact number of listings available, but if you do some price filtering you can guesstimate it.

While executive suites and airbnb rentals might be philosophically the same, Airbnb has enabled and mobilized volumes far beyond what executive rental availability has historically entailed.

According to this report, for example, average one bedroom unit in Vancouver rents for 1079 a month (2015 data). Airbnb average is 122$ a night. So if a unit is rented 10 days a month, you come out ahead of a monthly lease, with the potential to triple your return.

That is an incentive to unit holders to risk keeping it empty for 66% of a month while still making more money.

I think it is understandable as *users* of airbnb for the purpose of travelling, clearly it makes financial sense. It "just works", the units typically significantly undercut comparable hotel rooms, and there are large advantages. I think the discussion should go beyond simply being a favourable proposition for travellers however.
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  #13  
Old Posted Nov 25, 2016, 2:18 AM
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Originally Posted by geotag277 View Post
Not sure where you got this 306 number, but I checked a random weekend in December and there were over 2000 listings available for Vancouver alone. AirBnb (understandably) doesn't make it easy to see the exact number of listings available, but if you do some price filtering you can guesstimate it.
I relaxed the filters as much as possible (any price, any type of unit, anywhere in Vancouver proper) and went to the final page of the "instant book" listing. There are more that can be booked with approval, there might be some for larger numbers of guests, and the availability will vary day to day. Even if the number of listings normally exceeds 2,000 per day that number is a relatively small percentage of rental units, and we can't assume that every Airbnb unit is one that otherwise would have been a long-term rental.

In any case my point is that, even if Airbnb is having an impact on the supply, I think this is mostly because the rental vacancies were so low to begin with and there isn't much new construction of rentals in Vancouver. There are lots of cities that were relatively affordable before and after Airbnb became popular. While it probably does make sense to worry about housing policies that can have a 5% or 10% impact on supply here, there are a couple of elephants in the room in Vancouver and some of them still get close to zero attention. Like the fact that large scale multi-unit construction is banned in most of the city and condo investment has squeezed out other types of development in the few areas that are open to development.
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  #14  
Old Posted Nov 25, 2016, 6:15 AM
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Montréal is the 3rd biggest Airbnb money-making city in the world.

http://www.forbes.com/sites/omribarz.../#4abd7bb5319c

City Average 1-bed monthly rent Average Revenue Highest 10% yearly revenue Average daily fee Average Occupancy Highest 10% ROI
1 Barcelona $787 $24,602 $35,732 $112 71% 278%
2 Prague $592 $14,562 $23,772 $67 68% 235%
3 Montreal $719 $16,905 $26,429 $86 66% 206%
4 Osaka $732 $16,651 $26,764 $73 70% 205%
5 Los Angeles $1,482 $34,861 $53,826 $144 76% 203%
6 Berlin $762 $17,864 $27,231 $84 70% 198%
7 Cape Town $637 $12,885 $22,087 $72 64% 189%
8 Lisbon $645 $15,286 $21,863 $69 70% 182%
9 Paris $1,185 $23,570 $38,716 $117 66% 172%
10 Rio de Janeiro $673 $13,904 $21,708 $83 58% 169%
11 Madrid $831 $18,017 $26,720 $81 71% 168%
12 Rome $1,055 $20,976 $33,006 $101 67% 161%
13 Toronto $1,164 $23,341 $35,115 $104 74% 151%
14 Melbourne $1,240 $25,273 $36,093 $109 75% 143%
15 São Paulo $601 $11,046 $16,901 $55 67% 134%
16 Milan $1,021 $17,954 $28,153 $94 65% 130%
17 Istanbul $513 $8,218 $14,139 $49 55% 130%
18 London $2,083 $36,115 $56,381 $163 71% 126%
19 Copenhagen $1,322 $21,615 $34,923 $123 62% 120%
20 Seoul $969 $16,164 $24,657 $67 74% 112%
21 Tokyo $1,243 $20,705 $31,535 $87 73% 111%
22 Tel Aviv $1,129 $19,127 $28,314 $97 65% 109%
23 New York $2,915 $39,434 $62,381 $176 72% 78%
24 Sydney $1,940 $27,375 $41,183 $124 73% 77%
25 Shanghai $1,483 $14,690 $23,107 $72 68% 30%
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  #15  
Old Posted Nov 25, 2016, 2:19 PM
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I personally love airbnb. Every time I travel I use the service - partly because of price but primarily because you can actually get a place in an interesting neighbourhood. Hotels tend to be in very corporate parts of the city. Depending on the set up the hosts will provide a lot of advice about things to do as well. The only Canadian city I've used it in is Montreal, but outside of Canada I've done it in New York, San Francisco, Chicago, Boston, New Orleans, Cape Town and Johannesburg. Multiple times in some places. Never had an issue outside of minor things like poor wifi (which is standard in most hotels it seems).

Now I can see where an issue may arise when you have people using empty units specifically for airbnb purposes and turning a profit - I would be supportive of sensible regulation to tax this in some way. It does also bring up issues of having random guests in a secured building, which obviously isn't the case for smaller places. I tend to avoid these ones when travelling anyway as they tend to be in condo zones.

Possibly for people using basement / secondary suites too, although this becomes a bit trickier. The place I stayed in San Fran was a secondary suite with owner upstairs however he didn't want to rent out the unit because family was often in town and they didnt' have enough space in the main apartment. In that city I don't think you're making much more money (if at all) off airbnb than simply renting it given ridiculous rents.

No issue when people use their spare bedroom or simply when they are out of town. Some of the situations I've stayed in are someone who's out of town on business about 50% of the time (Montreal, New Orleans), someone who has defacto moved in with their girlfriend but still had several months left on the lease (Chicago, Cape Town), a backyard cottage of a house (Johannesburg), an overlap between new and old apartments (New York). Similarly one of my coworkers is taking a 2 month leave of absence to study ballet in Cuba and used airbnb to get some extra cash beforehand by renting out the 2nd bedroom and then break even on the rent while she is gone. It would be difficult to monitor or tax any of these situations and unless they were making a huge amount of money I don't really see the point.
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  #16  
Old Posted Nov 25, 2016, 3:25 PM
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The impact here seems to be mixed, with strongly positive and strongly negative attributes.

We're a somewhat unusual market in that the province is a closed system and functionally all of the population growth in St. John's comes from rural Newfoundland. This makes the city very suburban. The size of our urban core is today exactly the same size it was in the 1940s, if not, smaller. The majority of those moving into St. John's are passionately opposed to any sort of urban lifestyle and prefer modern subdivisions as sparsely populated as possible. Front page controversies here have included everything from four-floor "highrise apartments turning us into Toronto" to the absolutely offensive installation of sidewalks on BOTH sides a street. This is what we're dealing with. On top of that, the vast majority of our suburbs remain separate municipalities with lower taxes than St. John's. All this just creates a situation where the urban core is, by far, the cheapest area of the city to buy property, and the most expensive area in which to rent.

AirBnB's arrival coincided with the loss of oil and gas industry executive rentals. As these business people who paid multiple thousands in rent each month left, there was no one left who could afford to match those prices. Through AirBnB, though, property owners were able to recoup pretty much the same income. And even people with lacklustre properties were able to bring in much more money than they could otherwise.

I, for example, can get about $600/month for a room in my house - at best. If I had the time and patience to do AirBnB, I could easily double or triple that income. I've friends doing it right now.

The downside is that it pushes less affluent locals out of the core, which is really the only area of the city designed for people who aren't middle class with personal vehicles and disposable income. It even pushes some middle class downtownies out. I've had friends given notice of eviction from apartments (always the best-looking and located ones) because those were going to AirBnB in a few months.

There's definitely a need, though. We don't have enough hotel beds in the core so the hotels actually work with people with these units and shuffle excess guests out to them for a night or two. One of my friends is doing that for one core hotel and she's had both rooms in her house rented for months, with almost not vacancy.

So, it's a trade-off. It's helping weather the loss of visiting executives, and improving the downtown housing stock, but preventing locals from accessing and enjoying these improvements. I suspect we'll get into a cycle where locals move into the core in the fall and winter, and out of it in the spring and summer tourist season.
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  #17  
Old Posted Nov 25, 2016, 8:03 PM
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AirBnB drives up housing costs, particularly for renters. Period.
No amount of excuses can explain that away. In Vancouver we see basement suites removed from the rental pool along with units in purpose built apartments. Condos that could be providing first time buyers with a rung on the property ladder are being turned into de facto hotel suites.

That doesn't even touch the fact AirBnB properties contribute nothing to the hotel tax, which is used to fund tourism marketing. Or that hotels provide some of the last decent paying entry level jobs.
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  #18  
Old Posted Nov 25, 2016, 8:34 PM
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Quote:
Originally Posted by GreaterMontréal View Post
Montréal is the 3rd biggest Airbnb money-making city in the world.

http://www.forbes.com/sites/omribarz.../#4abd7bb5319c

City Average 1-bed monthly rent Average Revenue Highest 10% yearly revenue Average daily fee Average Occupancy Highest 10% ROI
1 Barcelona $787 $24,602 $35,732 $112 71% 278%
2 Prague $592 $14,562 $23,772 $67 68% 235%
3 Montreal $719 $16,905 $26,429 $86 66% 206%
4 Osaka $732 $16,651 $26,764 $73 70% 205%
5 Los Angeles $1,482 $34,861 $53,826 $144 76% 203%
6 Berlin $762 $17,864 $27,231 $84 70% 198%
7 Cape Town $637 $12,885 $22,087 $72 64% 189%
8 Lisbon $645 $15,286 $21,863 $69 70% 182%
9 Paris $1,185 $23,570 $38,716 $117 66% 172%
10 Rio de Janeiro $673 $13,904 $21,708 $83 58% 169%
11 Madrid $831 $18,017 $26,720 $81 71% 168%
12 Rome $1,055 $20,976 $33,006 $101 67% 161%
13 Toronto $1,164 $23,341 $35,115 $104 74% 151%
14 Melbourne $1,240 $25,273 $36,093 $109 75% 143%
15 São Paulo $601 $11,046 $16,901 $55 67% 134%
16 Milan $1,021 $17,954 $28,153 $94 65% 130%
17 Istanbul $513 $8,218 $14,139 $49 55% 130%
18 London $2,083 $36,115 $56,381 $163 71% 126%
19 Copenhagen $1,322 $21,615 $34,923 $123 62% 120%
20 Seoul $969 $16,164 $24,657 $67 74% 112%
21 Tokyo $1,243 $20,705 $31,535 $87 73% 111%
22 Tel Aviv $1,129 $19,127 $28,314 $97 65% 109%
23 New York $2,915 $39,434 $62,381 $176 72% 78%
24 Sydney $1,940 $27,375 $41,183 $124 73% 77%
25 Shanghai $1,483 $14,690 $23,107 $72 68% 30%
Wow impressive. And the top cities are interesting too. Berlin, Osaka,Prague, Montreal, Barcelona. That's some good company at the top.
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  #19  
Old Posted Nov 28, 2016, 6:36 PM
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Even if the number of listings normally exceeds 2,000 per day that number is a relatively small percentage of rental units
It might be a relatively small number in terms of total rental stock, but what is the growth trajectory of this number? AirBnb did not even exist 10 years ago.

Assuming there are 3000 units available at any given time, and the largest rental tower in Vancouver holds 200 units, and the tallest tower in Vancouver the Shangri-la holds about 300 units - AirBnb in less than 10 years has taken out housing stock equivalent to the 15 largest rental towers in Vancouver or put another way the equivalent of 10 Shangri-la (the tallest tower in Vancouver) which would be wholly dedicated to rentals.

How many years does that set Vancouver back on getting up to speed with rental developments?

There seems to be a large tendency among people living in Vancouver to use the argument that "this won't solve the whole housing problem therefore we shouldn't worry about it". You can substitute "this" with foreign investment, zoning, secondary suites, lane-way housing, AirBnb, or literally any other negative impact to the housing market for everyday Vancouver residents. In reality, Vancouver needs to be thinking about everything at once, and doing everything at once.
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  #20  
Old Posted Nov 28, 2016, 6:46 PM
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^3,000 units is substantial. Given that AirBnB has been around for about 5 years, and the City of Vancouver adds about 1,150 new rental units to its stock every year (p. 27), that means that the AirBnB growth rate was just over half of the growth of the rental stock during this time period.

Of course, the AirBnB growth rate would eventually taper off, but given the demand and the lucrativeness of AirBnB versus long term rental, there's still a fair bit of growth left to go.
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