With incredible speed and somewhat under the radar, Airbnb has become one of the biggest influences on both short and long term accommodation in cities around the world. The video below by Cracked breaks down the true costs to cities of the online rental giant through wit, satire and warning….some mild profanity.
Two of my friends in the last year have had their lives changed by Airbnb. One an eight year leaseholder of a house in Strathcona was renovicted so the entire dwelling could be put up for more lucrative short term rentals. The second friend massively over extended himself panic buying into a rising market, and left with the only option of renting his house on Airbnb for any hope in affording the hefty mortgage repayments. What have your experiences been with Airbnb? Is it good for Vancouver?
My experiences with Airbnb have been nothing but positive. It’s saved my bacon a couple of times when hotel rooms were either unavailable or ridiculously overpriced. It’s an inevitable service; little different from Uber and just as imperfect. These effects noted in the Cracked article are symptoms of the model’s success. It’s great to have travel accommodation options beyond standard hotels. If this short term profitability is more advantageous to property owners than long term rentals, then Airbnb rentals will continue to thrive. When they stop being advantageous, there will be fewer of them.
Regarding your friends, I fail to see how their circumstances are the fault of Airbnb.
You fail to see how their circumstances are the fault of AirBnB. Are you serious? One specifically lost their home because a greedy owner decided to turn the whole building over to AirBnB.
Not only does AirBnB take much needed accommodation out of the rental pool, it deprives tourism marketing of dollars derived from the hotel tax, it takes away well-paying jobs that are often a lifeline for new Canadians and it avoids any government inspection for safety of accommodation.
Airbnb didn’t invent greed. If we’re to believe a healthy wedge of PT posters, that honour clearly belongs to the Chinese. People get booted because their landlords want more money all the time. It’s not Airbnb’s fault. You might as well shake your fist at capitalism – or the nearest passing cloud.
And spare us the plea for industry support. The coal and gun industries support a lot of families, too. It’s not anybody’s responsibility to “support” the hotel industry – other than the hotel industry. If you want a hotel, and sometimes you do, pay for one. If for some trips you don’t, the existence of an alternative accommodation option is an unqualified good thing.
Then AirBnB owners should be subject to the hotel tax to create a level playing field. Owners should also have to get the appropriate business taxes as well and their property should be subject to all applicable CRA taxes.
Pricetags readers seem positively predisposed towards viewing every private development or innovation as needing a strong government response to control it. There is a deep, emotional distrust of decentralized, private power. I think this is the root cause of many beliefs here – it’s why we love transit systems (the ultimate expression of central planning). It’s why we love global warming, which justifies strong government action. It’s why we think we need “housing policy” and immediately distrust some new developer’s scheme for a big project that “goes against the plan”. When private corporations like Uber and Airbnb dream up decentralized ways to solve problems, they are responded to with fear and disgust. There is disgust at the impudence of these corporations in their willingness to ignore the rational plans of the centralized authority. These companies must be made to heel not just because they harm people, but because they harm the process and the system. Their rise necessarily redistributes power away from government and renders its plans and processes obsolete.
God Bless you Spank! We have been saying this for years.
Sincerely.
The Koch Brothers
Correct: I am a Koch Industries public relations employee. What of it?
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Dan – My friend was desperate to get into the Vancouver market (Not Airbnb’s fault), he couldn’t cover the mortgage with traditional rental so he goes for Airbnb which gives him significantly higher income. Now he can buy a house he never would have been able to (Airbnb’s fault).
It’s Airbnb’s “fault” that he can now afford a house he couldn’t previously?
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Perhaps were splitting hairs here, of course everyone is responsible for their own decisions. Airbnb has opened up a grey market that has circumvented its original purpose of allowing people to share a home with a family. Airbnb is not regulated, if the City/Province cracks down and the fees rise for my friend and said individual cannot afford the Metrics anymore maybe this will flood the market with foreclosed inventory and your capitalism bent will bear fruit.
So its the Drug Dealers fault your neighbor is addicted to Heroin?
You allude to the real problem … in most markets, AirBnB wouldn’t really matter much, only because Vancouver has so many other issues going on that it becomes a thing (low wages, high costs, foreign money, vacant units, poor renter protection, etc, etc, etc…).
Other cities of course have many of the same issues as Vancouver, just maybe not quite so acute, or not quite so many.
I totally agree with the fact that Airbnb is changing the real estate market in many cities.
Nonetheless, I have become an avid user of Airbnb. Airbnb provides my family with a product that is rarely available in the cities that we travel to – an apartment. Majority of hotels simply rent hotel rooms where we are forced to live a certain lifestyle. We are forced to eat out live on a schedule that fits with the hotel (breakfast from 7 till 10) and then also creates issues from having parents and kids in the same bedroom. Airbnb actually does work better for families traveling and staying in places for a long period of time.
In Croatia for example, people rent their apartments on Airbnb but still pay the tourist taxes that are usually based per person per night. There are several ways of dealing with the “distortion” to the real estate market that Airbnb is causing. The only issue here is that governments need to be proactive and work quickly to do so.
Well argued. AirBnB is successful because it serves a need, both for the accommodation supplier and the accommodation user. Otherwise it would fail.
The issue though is that many parts of cities are zoned “residential” which is defined as “long term rental or owner occupied” i.e. it implies indirectly “not commercial, not short term”. As such AirBnB strictly is illegal in most of Canadian cities. Long term is usually defined as 6 months or longer.
As such cities need to either
a) make it legal i.e. change the zoning AND charge a hefty fee per night [ I suggest this is the right approach, say a % or flat fee per night ], or
b) enforce the law.
The new “vacancy” tax clearly spells out the fines as houses or condos rented via AirBnB are essentially now deemed “empty” i.e. not complying with 6+ months rentals or owner occupied.
We shall see how it will be enforced. Interesting article here by BIV’s VP Kirk LaPointe who ran against Gregor Robertson under the NPA flag last civic election: https://www.biv.com/article/2016/9/totally-vacant-city-vancouvers-empty-homes-tax-ful/
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Typical LaPointe, a man with many criticisms but no solutions. We learned this during his 2014 campaign. I’m still laughing at his counter-flow arterials to reduce congestion.
Kirk was RIGHT ON. We need to utilize existing roads far better, and not intetionally stuff them with bike lanes or free parking at rush hour with the only intent to annoy car users. Too many handout seekers though support “Vision” such as folks that wish to park their cars for free on public roads. Gregor has given this town more bike lanes and more unaffordable housing, but that’s about it. That is green ? That is sustainable ? Public servants in the city grossly overpaid, no Uber, appeasing of unions, zero new rapid transit except 2010 Olympic inspired CanadaLine that is already undersized. Latest insult is to get off gas heating and SW Marine Drive from Granville to UBC that could have been a counterflow 3 lane road with traffic circles, but no, more bike lanes for 500 daily bikers to annoy 10,000+ car users. Brilliant. A subway would have been better. UBC line only to Arbutus ? What a joke !
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All you have to do is look at the massive congestion and delays caused by reducing the Burrard Bridge to 3 lanes for the bridge and bikelane retrofit….Oh wait, there are none
I agree with Thomas on this one. Some ecommerce businesses like airbnb and uber have been successful by exploiting inefficiencies in government regulations. For uber, it is the regulations around taxis. While some regulations to guarantee that handicapped, etc. people get served are good, the whole mediallion thing has turned into an investment vehicle that leaves the ordinary drivers at a disadvantage, and a incentive for taxi medallion owners to keep the number of taxis at a minimum. Hence the occasional long wait time, etc. Uber comes in, without any of the guarantees for handicapped people, but also without those legacy costs and so can offer something regular taxis cannot. The same thing goes for airbnb, which is exploiting the differential between commercial and residential tax rates. airbnb hosts have a competitive advantage against hotels, etc. in that they currently don’t have to pay commercial taxes, or any of the other fees that hotels have to pay. It’s time for the city / province etc. to step up and level the playing field, taxing every room the same. If, knowing they have to pay the taxes, people still want to rent their place, why not?
Very strange.
This Cracked YouTube clip is using two disruptive media platforms that is putting people out of work from traditional industries, as is this WordPress blog.
How would it be received if the Vancouver Sun were to hire some hipster comedians to rant on sensationally about WordPress and other unregulated on-line media putting pressmen and journalists and newsprint manufacturers out of business?
Exactly, were that t happen we would laugh. That horse has already bolted.
Airbnb hosts can be governed by the jurisdiction they are located in. People have rented out rooms to guests for as long as humans have had dwellings. Anyone in the western world has probably heard the expression, ‘no room in the inn’. An earlier form of Airbnb.
Scripps owns the video comedy channel Cracked. Cracked is not a little group of smart hipsters. They are part of a 130 year old $3.2 billion company with over 3,000 employees. Here’s their mission statement, the first line says it all:
“Scripps is a company where competing truths coexist.
We are proud of our long and rich history, but we stay fixated on the future.
We are creating digital media brands that complement and support our successful television and radio stations but also some that could compete with and disrupt them.
We employ accomplished journalists who have earned prestigious industry awards and have authority with audiences. But we’re also a band of contrarians who challenge the process and push ourselves to do new things.
We are obsessed with being right, but we’re not afraid to experiment and, occasionally, to fail.
We have a conservative financial ethos, but we use it to support an opportunistic and, at times, counterintuitive investing strategy.
We were birthed by newspapers, and we nurtured cable systems and cable networks. We loved them all, but we set them free.
We are comfortable with these kinds of disruptive ideas and contradictory facts. And that leads to a culture where our thriving broadcast business works side by side with emerging digital brands. Together these businesses create a financially attractive news and information company whose employees want to improve the circumstances of those we serve.”
‘no room in the inn’
Maybe your example of effective temporary housing systems shouldn’t reference that time a woman gave birth in a stable — because I think most people are looking for something a bit more comfortable and they aren’t generally compelled by Roman decree to travel places to help the government count its population. Gonna go out on a limb and say that after 2 thousand years, maybe we can have a reasonable expectation our systems for sheltering people might move beyond sharing space with livestock (or using it as an example of an effective solution).
Further, this example isn’t one of an AirBnB type arrangement. The new family in question were seeking accommodation at an establishment made for that purpose — not seeking to rent an extra room in someone’s Bethlehem condo while they are away for a few weeks.
Gotta laugh though. You know who else can quote scripture to his purpose right Eric?
“This Cracked YouTube clip is using two disruptive media platforms that is putting people out of work from traditional industries, as is this WordPress blog.”
Nonsense. There is plenty of work out there for the same amount of people as ever — if quality of content were the goal. New technologies could have been used to improve the audience experience and quality of product in every communications realm, and things would have continued much as before in terms of workforce numbers. What happened instead was an opportunity was spotted to cut jobs and increase profits. Turned out to be the wrong bet for some media companies and now they are hurting.
Technology is a hammer. You can build a house or cave in someone’s head. Don’t blame it because some companies (and the people who run them) can’t look forward far enough to ameliorate the negative impacts to their workforce and capitalize on the opportunities presented by new delivery methods.
there’s some great works out there on how the boarding house used to be a key feature of many cities, providing cheap accommodations for visitors and newcomers, and how these were forced out by single-use zoning and hotel favoring regulations.