New statutes issued by officials in Vancouver meant to decrease the number of homes rented out to tourists via popular short-term rental website Airbnb appear to be working.
Vancouver’s new regulations stipulate that homeowners may only offer their primary residences for short-term rental on the Airbnb site while also requiring that they purchase a $49-a-year license to do so. The purpose of these new rules is to return non-primary residences to the long-term rental market which, as is no secret to anyone, has had troublingly low vacancy rates in recent years resulting in jaw-dropping rental prices. The city’s short-term rental policy took effect on April 19th, however, they gave hosts until August 31st to purchase a license and include it in their listing. Officials claim that the number of listings on the popular accommodation website fell from 6,600 in April to 3,742 following the new rules coming into effect on
September 1st. Though it has not been confirmed that these new regulations are the sole reason, rental prices in Vancouver do seem to have stabilized. According to popular rental site Padmapper, the median price of a one-bedroom apartment was $2,050 a month. Fourteen months later, in August of this year, the median price had fallen to $2,000. Vancouver could see the number of listings decrease even more if, and as, these regulations are enforced more aggressively. So far the city has only issued 2,630 licenses with a remaining 1,112 unlicensed properties still in violation of the new rules.
Breaking New Licensing Rules
Jens von Bergmann, who runs MountainMath Software, a data modelling and visualization company, took it upon himself to compile data from Airbnb as a side project. He used the city’s business licensing data to demonstrate that although there was upward movement in the number of short-term rental licenses approaching the deadline, it would be “extremely unlikely” that the unlicensed listings would all comply by then. He went on to say, “I think there’s some delusion on behalf of the operators that somehow these rules don’t apply to them.” The City of Vancouver refused to comment on von Bergmann’s statistics.
The license bylaw impedes short-term rentals of the host’s primary home. Hosts caught listing their secondary units on short-term rental sites could be confronted with a fine of up to $1,000 for each violation. However, through his research, von Bergmann stated that many listings he came across appeared to be still breaking these rules. By comparing the Airbnb and Vancouver licensing data, he claimed that many of the license numbers were used for multiple listings with almost 700 operators having more than one active listing. One even had 36 active listings.
Airbnb stated it would deactivate all listings that do not include a short-term business license, however, if new or existing hosts choose to sign a fake number on the website listing form, as some have decided to do, or use the same number for more than one listing, it will be up to the city, not Airbnb, to try and shut down their business:
“Airbnb will not be responsible for removing from its platform any listings that have incorrect registration numbers or are otherwise invalid…Similarly, the City may pursue enforcement action against Hosts that have otherwise violated provisions of any City bylaws. Airbnb shall not be responsible for removing listings from its platform that belong to such Hosts that have violated provisions of City bylaws.“
The popular rental site comprises about 80% of all listings for vacation accommodation in Vancouver. The city’s director of licensing, Kathryn Holm, states that many cities around the world also struggle with hosts not having proper business licenses. The Expedia/VRBO/HomeAway platform also has hundreds of listings in Vancouver, but there are not yet any requirements in place for its hosts to enter a business-licence number. Ms. Holm has stated that the city of Vancouver is in discussions with that company working towards a similar agreement to the one they have with Airbnb.
It is difficult to say whether or not 100% of hosts will choose to become legitimate and sign up for an official business license. With property and rental prices remaining the second highest in the country, only behind Toronto, many hosts value their secondary residences as critical sources of income. The city and its residents face a Catch 22 situation as housing affordability remains a primary issue while there is also a necessity for putting more properties back on the market.
