On April 11, Vancouver was the first Canadian city to strike a deal with short-term home-rental website Airbnb, making it legal to short-term-rent a home subject to licensing.
Now, I’m all for regulating short-term rentals and trying to get some units back into the long-term rental pool. But the claims that the City and Airbnb made in their announcement – that it’s being made easier for Vancouver residents to home-share, and that 80 per cent of Vancouver’s existing short-term rental hosts will qualify for a licence – seem to me simply untrue.
Sure, it’s easy enough to fill out a licence application, as the City was quick to point out (“Takes just five minutes!”) and only costs $49 a year. Then you get your licence, post the number on your Airbnb listing (as will be mandatory from September) and boom, you’re all set. What could be easier?
Well, first, you have to be eligible for a licence – and there’s the rub. The new requirements are so onerous that relatively few hosts will be able meet them all, in order to even get to that easy, five-minute application. (Check out the City’s quiz assessing whether you could be eligible for a licence.)
For one thing, the unit or room being rented has to be your principal residence. Your actual year-round home – not a separate basement suite, not a laneway house, and certainly not an investment property or second home. All those are totally banned, as the City (understandably) wants them in the long-term rental pool. So only your own entire home (presumably when you are away) or a room in your home is allowed on Airbnb. This means all those people currently renting out secondary suites, laneway homes or investment units will have to take their listings down permanently.
The next step, for those who are indeed sharing their home, is as follows. If you are a renter, you need written permission from your landlord to get an Airbnb licence – basically requiring their express approval for you to operate a business renting out their property on a short-term basis to total strangers. How many landlords will give their tenants that permission? I know I wouldn’t.
Similarly, if you are a condo owner, you need permission from your strata council in order to get an Airbnb licence. Even most strata buildings that allow rentals very seldom allow short-term rentals of fewer than 30 days. So that’s another huge chunk of hosts who will be ineligible.
And finally, even if you’re a single-family home owner who needs no permission, you’ll still have to jump through extremely strict fire safety requirement hoops (check them out here) in order not to get shut down. Say you’re away a couple of months of the year and want to Airbnb your house in that time. You’ll have to have interconnected smoke alarms in every bedroom, fire plans (like those in hotels) at every entrance and exit, fire extinguishers on every floor, maintain and test alarms every year, and supply the City with all these records – the list goes on. Sure, for some hosts it will be worth the investment of time and money, but many won’t bother.
Will it help long-term rentals?
So the City’s assertion that 80 per cent of current Vancouver hosts will be eligible for a licence is surely way off. In fact, the City admitted this statistic is simply based on the fact that 80 per cent of current Vancouver Airbnb hosts have just one listing (as multiple listings and commercial property owners are also banned). It doesn’t take into account any of the above factors, which will surely wipe out thousands of the existing 6,600 Vancouver short-term listings.
That’s a blow to people looking for affordable accommodation in the city, and a massive blow to many current Airbnb hosts, many of whom rely on the income. But it’s reasonable to then hope all this will mean many of the ineligible units will go into the desperately low long-term rental pool, which would be a good thing, and maybe that’s why the City made the requirements so strict. Sadly, though, it’s likely that only a small proportion of the dropped Airbnb listings will be rented long term.
The problem with disqualifying secondary suites and laneway homes is that many homeowners want to be able to use them for guests whenever they want, so short-term rentals work for these owners, but they won’t rent the suite long term. The Airbnb ban on such suites means that many will therefore be left empty, and all it achieves is decreasing the pool of affordable short-term places to stay in Vancouver, which is also critically low.
Either that, or those people will use any number of workarounds to illegally Airbnb these suites in ways that would be very hard to police. Adverts can be seen for long-term rental units that offer a discount to the tenant who puts their name down on the Airbnb licence application (they are eligible, as it’s their primary residence) in order to Airbnb the other room or suite owned by the landlord. The landlord gives “permission” as they’re the one really operating the short-term rental. A similar, reverse workaround is a tenant who rents a two-bed home, and currently Airbnbs one bedroom year-round to pay for the whole rent. They might achieve permission from the landlord, and therefore get a licence, by offering the landlord a share of the Airbnb proceeds. And workarounds for owners of locked-off basement suites include removing the lock on the door between the main home and the suite, and removing the kitchen downstairs, so that it is no longer legally a suite and becomes part of the primary residence.
Likely there are many more sneaky ways that owners, tenants and landlords will think of to get around the new rules. But if you think an easy, legal workaround would be to simple move your listing to VRBO, HomeAway, FlipKey or one of the other active short-term rental websites, you're likely out of luck, as the City is expected to put similar rules in place with all other short-term rental sites.
The question you really have to ask is, what exactly is the City trying to achieve here? If it’s simply to regulate a currently unregulated short-term rental system, nice job. But if it’s to make it easier for people to home-share, or provide more affordable short-term accommodation in Vancouver, or provide more long-term rentals for the city’s residents, I suspect the new system will fail on all three counts.