Airbnbs only a tiny share of potential long-term housing? Still a problem

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Thorben Wieditz is executive director of Fairbnb Canada Network.

Statistics Canada’s report last week, “Short-term Rentals in the Canadian Housing Market,” reveals that by 2023, 107,266 housing units had been converted to commercial short-term rental (STR), rendering them unavailable for long-term occupancy. Comparing this number to Canada’s current total housing stock of 15,495,361 units, Statscan suggests that a seemingly minor 0.69 per cent of the total housing stock is utilized as commercial STRs.

Airbnb Inc.’s Canadian policy lead, Nathan Rotman, quickly seized on this statistic, arguing that Airbnb’s impact on the housing market is minimal and that further restrictions on STRs wouldn’t solve the housing crisis. However, this interpretation is fundamentally flawed.

To accurately assess the impact of commercial STRs, it’s essential to focus on their proportion of available housing units rather than the total housing stock.

According to the Canada Mortgage and Housing Corporation (CMHC), Canada’s vacancy rate for purpose-built rentals is 1.5 per cent. Assuming this rate is similar across other housing types, there are approximately 232,430 available units nationwide for long-term residents. The 107,266 units now used as commercial STRs could increase the pool of available units by another 46 per cent.

In other words, if all these units were returned to the market, Canada’s vacancy rate would rise significantly, highlighting the urgent need to address this issue again.

Furthermore, examining new housing starts provides additional context. In 2023, new housing starts in Canada decreased by 8.2 per cent compared with 2022, amounting to 240,267 units. Meanwhile, commercial STRs grew by 53 per cent during the same period, according to Statscan.

This rapid increase means a significant portion of new housing is diverted from long-term rental availability. The situation is comparable to filling a leaky bucket: despite adding new units, many are quickly absorbed into the STR market, worsening the housing shortage.

This context makes CMHC’s deputy chief economist, Aled ab Iorwerth’s statement that “STRs are not a pivotal factor on the long-term rental market,” quite puzzling. Considering CMHC regularly provides data on new housing starts and vacancy rates, one would expect their analysis to acknowledge the significant impact STRs have on the housing market.

Moreover, it is essential to highlight that commercial STR use is illegal in several Canadian jurisdictions, including major cities such as Vancouver, Toronto and parts of Montreal, and most of British Columbia, which are among Airbnb’s largest markets. The continued presence of these illegal listings on platforms such as Airbnb indicates a need for more enforcement of regulations designed to protect residents’ access to housing.

Given Statscan’s data, Airbnb could have taken a responsible approach by committing to investigating and voluntarily removing illegal STR listings in accordance with provincial and municipal laws and regulations. Instead, Airbnb’s policy lead focused on the misleading 0.69 per cent figure, downplaying its role in the housing crisis and arguing against further restrictions.

This stance deflects from the real issue: the substantial impact of STRs on the availability of long-term housing in Canada, the persistence of illegal properties on Airbnb’s platform and the company’s profiting from illegal activity.

Having closely followed STR dynamics in Canada since 2016, I have little hope that Airbnb will do anything but downplay its role in our housing crisis. While certainly not the sole cause, commercial STRs, as I have shown, add fuel to the fire.

If Airbnb does nothing to deplatform its illegal listings, perhaps the most effective approach for regulators would be to follow Barcelona’s lead, which has just outright banned STR use to ensure housing stock is not diverted into quasi-hotel inventory.