Crackdowns on short-term rentals in British Columbia have effectively reduced rents by 5.7 per cent, saving tenants more than $600 million last year, says a report led by the Canada Research Chair in Urban Governance at McGill University.
That figure is the result of municipal restrictions, in particular requirements that short-term rental units be located within the operator’s principal residence.
In Victoria, for example, the report says renters are paying an average of $78 to $96 less each month than they would have without the city’s principal-residence rule, representing a savings of five to six per cent.
In Nanaimo, renters are paying an average of $20 to $24 less each month, it says.
The greatest savings were seen in Vancouver, where renters are paying an average of $147 less each month, it says.
The report, led by research chair David Wachsmuth, says the recent provincewide regulation for communities with more than 10,000 residents has the power to carry similar savings across B.C., helping to ease affordability challenges.
The provincial change took effect in May, requiring listings on platforms such as Airbnb and Vrbo to be located in the operator’s principal residence and one secondary suite.
Assuming the provincewide requirements have the same efficacy as existing municipal rules, Wachsmuth’s report says tenants in those cities should see rents decline by four per cent, amounting to a total savings of $592 million each year by 2027.
Renters would pay an extra $1 billion within two years if the province’s rules were to be repealed after this year, says the report released Wednesday.
That’s a finding Premier David Eby’s New Democrats are highlighting in a statement a month before B.C.’s election, saying provincial Conservative Leader John Rustad recently told supporters he would reverse the short-term rental restrictions.
Airbnb criticized the report, noting that Vancouver has had short-term rental regulations — including a primary-residence restriction — in place since 2018.
According to data from the Canadian Mortgage and Housing Corporation, rents in the city have risen by nearly 40 per cent since 2017.
It’s not clear whether they would have risen even more if the short-term rental policies were not in place.
“There is no evidence that shows restricting short-term rentals will support housing affordability,” said Nathan Rotman, Airbnb’s policy lead for Canada, in a statement. “In fact, credible reports show that restricting short-term rentals [does] not help make housing more affordable.”
The report says the BC Hotel Association commissioned the researchers to provide an early analysis of the province’s short-term rental rules. The authors from the Urban Politics and Governance Research Group are exclusively responsible for all of the analysis, findings and conclusions, it adds.
The McGill researchers looked at 52 of 55 neighbourhoods across B.C. with a principal residence restriction in place in January 2023. The analysis found rents were an average of $110 lower than they would have been without the rule.
B.C. passed its provincewide short-term rental accommodations law in October 2023 and the government has been phasing in the measures.
The McGill report says a registration system with additional “accountability requirements” for listing platforms is expected early next year.
It says the “full implications” of B.C.’s rules won’t become clear until then, when the platforms will be obligated to remove listings without valid licences.
But the report concludes that B.C.’s principal residence restrictions mean average monthly rents will be $94 lower in the fall of 2027 than they otherwise would have been.
The researchers also looked at the number of Airbnb listings before and after the province’s principal residence requirement took effect in May.
They found 13,624 “frequently rented entire homes” in B.C. listed on the platform in June 2023, along with 34,665 properties of different types.
By May 2024, just over 86 per cent of the frequently rented homes were still listed, the report says. Close to 89 per cent of the other listings were also still visible.
The declines “suggest that many hosts withdrew their non-compliant listings in response to the province’s new [short-term rental] rules entering into force,” the report says.
“In general,” it says, “the more active the listing, the lower chance it was still visible on Airbnb after May 2024.”
The report says the researchers used public and private data sources to conduct their analysis, as well as a modelling approach that’s widely used by economists.
— With a file from the Times Colonist
This report by The Canadian Press was first published Sept. 18, 2024.
