I  leased a condo on the upper East Side of Manhattan through Craigslist while doing some work in New York City. It was in a building that allowed no rentals, and I agreed to stay there less than 29 days. I paid all cash to a lady that had a local cable cooking show, and who rode around New York City in a Rolls Royce.

That slightly illegal deal has now been formalized by the disruptive technology group Airbnb.   As reported in the Vancouver Sun by Nick Eagland, the City of Vancouver is investigating the operation of 17 short-term rental units in a two storey building of 29 units located near Kitsilano Beach. The building’s name? The New York, of course.

So how does this happen?  As reported in the Vancouver Sun “In Vancouver, all rental tenancies must be at least 30 days except in hotels and licensed bed and breakfasts, but the vast majority of Airbnb hosts violate this regulation. In online reviews, many users say they stayed at the New York for just a few days.” 

If every building unit was leased out monthly for 30 days, there would be no short-term rentals which take valuable rental housing stock away from local renters, and provide higher net  income to the landlord which may be undeclared for tax purposes.

A student at SCARP (School of Community and Regional Planning) at the University of British Columbia, Iain Marjoribanks has been studying the impacts of Airbnb on the rental market.  His findings are telling. Airbnb has a centralized control of all listings and charges a 9 to 15 per cent service fee on all bookings. The company conceals the location and identity of the hosts offering rooms, making enforcement challenging for municipalities. He surmises that 99.3 per cent of all Airbnb Vancouver stays are less than 30 days.

Surprisingly the majority of bookings and revenue come from a minority of hosts-property managers who list several houses or units consistently over long time periods, using Airbnb’s anonymity to avoid municipal enforcement.

Marjoribanks estimates that one out of every 14 secondary suites in Vancouver have been converted from rental to Airbnb. In 2015, out of 4,728 December listings  3,529 had a review, suggesting that they had been leased. That is a lot of units in short-term rental in the city.

Marjoribanks points out that Airbnb as well as the owners of short-term rentals need to be accountable and suggests registering and tracking these units. He further notes that any  attempt to regulate without clarity and accountability by web providers and landlords will exacerbate the current situation. Quite simply, just enforcing would  “legitimize Airbnb’s operations and undermine municipalities’ authority to regulate zoning and business within their borders.” The challenge will be for local governments to band together to demand transparency  from Airbnb which has been operating like a Manhattan maverick.