The Vancouver Life Real Estate Podcast Is AirBnB To Blame For Canada's Housing Crisis?
The provincial government is creating even more restrictions around Air bnb operators with a recent announcement made by Premier David Eby and Housing Minister Ravi Kahlon regarding a proposed ban on short-term rentals in British Columbia. There are however, some exceptions for smaller municipalities and specific resort but their intent here is step up enforcement with bigger penalties and to discourage landlords and investors from removing properties from the long-term rental market.
At a time when the region is grappling with soaring rental rates, predominantly impacting the condominium sector, the government is creating more restrictive policy by attacking demand, turning away long term investment and damaging the tourism sector in some of BC’s most important communities.
Instead of looking at ways of boosting new supply, the proposed ban includes provisions for increased fines and the establishment of an enforcement unit. However, there will be potential challenges in enforcing the new regulations, especially if those who were utilizing Air bnb decide to create short term rentals on other platforms like Facebook Marketplace or Craigslist.
Air Bnb Canada has argued that the proposed legislation could adversely affect the income of residents who currently hold Air bnb properties and reduce tourism spending in affected communities like Kelowna, Penticton and many others. Furthermore, they also believe bans like this won’t do anything to help with the overall housing crisis that the province finds itself in.
Moreover, the argument as to whether the potential implications of the ban, its efficacy in addressing the housing crisis here in BC and its impact on investors and the tourism sector will actually make an impact. It feels largely like a knee jerk reaction to the loud cries of affordability in the rental market. To be seen as trying to make an immediate impact for constituents who are really grappling with the outcome of negligent public sector housing planning & legislation over the last two decades.
The truth of the matter is that the policy is aimed at a small group of investors who do not have a large enough footprint in the market to make a considerable impact on the rental market. Nor were these operators the ones who created the housing shortage. Moreover, if current operators of Airbnb can’t achieve a net positive cashflow from long term renters in the absence of short-term rentals, the assets will sell to new end users - which still leaves the renter with no new inventory.
Lastly, this week we touch on the current dynamics of the housing market, shedding light on the declining housing starts amid a significant influx of immigrants, resulting in a market standstill. Additionally, insights are provided on the latest inflation figures and findings from the MNP Consumer Price Index insolvency firm's quarterly survey, revealing mixed sentiments among Canadians regarding their ability to manage debt in the face of rising interest rates and a cooling economy.
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