B.C.'s short-term rental rules cause drop in listings: study

Early evidence suggests British Columbia's recent restrictions on short-term rentalshave led to a notable decrease in listings, according to a recent study.

The rules limit short-term rentals (STRs), such as those offered on platforms like Airbnb, to within a host's home or a basement suite or laneway home on the property where they reside.

The change, which aims at addressing the housing affordability crisis, went into effect in May for close to 80 B.C. communities, most of which have 10,000 or more people.

Since then, almost16per cent of frequently rented entire-home listings in these areas were not visible on Airbnb by July, according to the study,which was conducted on a freelance basis by McGill University professor David Wachsmuth and commissioned by the B.C. Hotel Association.

It says the change was most noticeable in northern B.C. and on Vancouver Island.

At the same time, Wachsmuth's findings which were analyzed byresearchers from the Urban Politics and Governance research group at McGill University found no observable decrease in listings in areas without the restrictions.

"We've seen very directly thousands of formerly full-time short-term rentals leave the short-term rental market," Wachsmuth said in an interview with CBC's The Early Edition on Wednesday.

But it's still unclear what happens to these units after they are removed from the STR listings.

Wachsmuth said researchers and policymakers will have to wait for the Canada Mortgage and Housing Corporation to release its annual data in order to see the rules' exact impact on vacancy rates and the number of long-term rentals.

WATCH | Callers reporta mix of decisions following short-term rental restrictions:

B.C. housing researcher dissects progress of short-term rental restrictions

22 hours ago

Duration 3:40

A new report commissioned by the B.C. Hotel Association suggests the province's new short-term rental rules are working, but Airbnb disputes the findings. Craig E. Jones with the UBC Housing Research Collaborative provides context on the rules and what's known about their impact so far, before BC Today callers share what the restrictions have meant for them. Correction, Sept. 19, 2024: A previous version of this video description stated that Craig E. Jones disputed the findings of the report on short-term rental restrictions. In fact, he provided context about the rules and their impact.

In addition, his report says B.C. neighbourhoods that had municipal STR restrictions in place at the start of 2023 paid less in rent by the end of the year than they would have without those rules. For instance, it says renters in Vancouver which has had STR rules since 2018 paid around $150 less per month on average.

The study calculates that communities under the provincial regulations could therefore see a four per cent decline in rent by 2027totalling $592 million per year if they have the same efficacy.

"This implies that, if the province's STR rules were to be repealed after 2024, within two years B.C. renter households in these cities would have paid an extra $1billion in rent," the study added.

That's a finding the B.C. NDP is highlighting one month before the provincial election, saying that B.C. Conservative Party Leader John Rustad recently told supporters he would reverse the short-term rental restrictions.

"[Rustad's] plan to scrap this new law would turn long-term homes back into short-term rentals and drive up rents. That's a risk people can't afford,"Housing Minister Ravi Kahlonsaid in a statement.

WATCH|David Wachsmuthdiscusses his report:

Short-term rental restrictions in B.C. working, new research suggests

1 day ago

Duration 7:08

David Wachsmuth, an assistant professor of urban planning at McGill University, has released a report commissioned by the B.C. Hotel Association he says shows the province's short-term rental rules are working. He says the number of active short-term rentals in B.C. has dropped by nearly 16 per cent (15.8%) since the restrictions came into effect this past May. Wachsmuth conducted the research as a freelancer outside of his position with the university.

But the study's findingshavealso faced pushback.

In a statement, Airbnb said the study useddata from before the provincial legislation was even tabled.

"Let's be clear, this report has no connection to the provincial law that went into effect on May 1 of this year," said Nathan Rotman, policy lead for Airbnb in Canada.

"There is no evidence that shows restricting short-term rentals will support housing affordability. In fact, credible reports show that restricting short-term rentals do not help make housing more affordable."

Rotman pointed to several studies including a Statistics Canada report that identified more than 100,000 short-term rentals could be homes, but the figure makes up less than one per cent of Canada's total housing stock.

Craig Jones, associate director of UBC's Housing Research Collaborative, told CBC's BC Today on Wednesdaythat a Conference Board of Canada report in 2023 looked at similar questions but found there was no statistically significant relationship between Airbnb activities and rent.

"There are a couple of key methodological differences in [Wachsmuth's] report, which could lead to some different outcomes," he noted.

WATCH | B.C. announces new rules around short-term rentals:

B.C. announces new rules around short-term rentals to take effect May 1

5 months ago

Duration 2:05

A provincial rule to limit short-term rentals to a homeowner's principal residence plus one secondary suite or accessory dwelling comes into force in British Columbia on May 1 in 60 communities. As Zahra Premji reports, 17 additional communities have chosen to opt in to the rules, despite being exempt.

Wachsmuth told The Early Edition that the data he used comes from an academic study that is currently being peer-reviewed, and his report summarizes its portion about B.C. He said it used a methodology called "difference in differences," which is "pretty much the gold standard for economic modelling" for such issues.

In addition to the STR restrictions, B.C. is also requiring rental platforms to regularly share data about its listings with the province, which Jones considers to be good policy.

"The more we know, the better decisions that we can make," he said.