WA­TER­COOLER

The debate over Airbnb's im­pact on rental hous­ing re­veals a gen­er­a­tional di­vide— but not the one you'd ex­pect

BC Business Magazine - - Contents - By Steve Burgess

What the Airbnb con­tro­versy tells us about peo­ple young and older

Airbnb— does it con­trib­ute to the eco­nomic well-be­ing of so­ci­ety? Or does it make our ci­ties less liv­able? A re­cent Mus­tel Group poll of Van­cou­ver cit­i­zens com­mis­sioned by Bcbusi­ness of­fers one per­spec­tive. Does Adam Smith of­fer an­other?

Smith—per­haps you've heard of him— sug­gested that the com­mon good was best ad­vanced by a per­son pur­su­ing only pri­vate gain. “He gen­er­ally, in­deed, nei­ther in­tends to pro­mote the pub­lic in­ter­est, nor knows how much he is pro­mot­ing it,” the Scottish philoso­pher and econ­o­mist wrote in his in­flu­en­tial 1776 book An In­quiry Into the Na­ture and Causes of the Wealth of Na­tions. Smith added that “he in­tends only his own gain, and he is in this, as in many other cases, led by an in­vis­i­ble hand to pro­mote an end which was no part of his in­ten­tion.”

Smith's phi­los­o­phy has shaped the eco­nomic world. Ar­gu­ments rage about his ideas, and the Airbnb is­sue falls into an in­trigu­ing side debate. Never mind the in­vis­i­ble hand—if con­sumers are told a prod­uct or ser­vice may have harm­ful ef­fects to so­ci­ety as a whole, how will they re­act? Will they make de­ci­sions based on a per­cep­tion of the pub­lic good or con­sider only their own needs?

Take sport util­ity ve­hi­cles. They've been shown to be safer than smaller cars in col­li­sions. How­ever, SUVS, par­tic­u­larly ear­lier de­signs, have proven more dan­ger­ous to

other mo­torists be­cause their greater height and weight make them more likely to crush smaller ve­hi­cles' pas­sen­ger com­part­ments. So would peo­ple forego an SUV out of con­cern for the safety of their fel­low trav­ellers? Or will their own safety take prece­dence? The con­tin­u­ing pop­u­lar­ity of SUVS sug­gests that in this case, con­sumers have opted for the lat­ter (while SUVS' grow­ing bulk points to an arms race of sorts on the pub­lic roads).

As for Airbnb, the on­line ac­com­mo­da­tion rental ser­vice has been ad­ver­tis­ing lately to tout the ben­e­fits it brings to Van­cou­ver. Many of the ads fea­ture prop­erty own­ers who use it to gen­er­ate income. By do­ing so, Airbnb sug­gests, these peo­ple en­rich us all by boost­ing tourism and eco­nomic ac­tiv­ity. Rent your home for your own profit, then watch as that in­vis­i­ble hand spreads the ben­e­fits around.

But to­day the in­vis­i­ble hand has been joined by the neb­u­lous In­ter­net. The pop­u­lar­ity of Airbnb has led, some say, to a short­age of long-term rental ac­com­mo­da­tion. The City of Rich­mond re­cently voted to ban short-term ren­tals, while the City of Van­cou­ver plans to let res­i­dents rent out their home for short pe­ri­ods if they have a busi­ness li­cence but to ban short­term ren­tals in sec­ondary res­i­dences or in­vest­ment prop­er­ties. By cater­ing to tourists, Airbnb drives up rental prices for lo­cals, crit­ics charge. Does this ser­vice ben­e­fit a few while deny­ing rea­son­able ac­com­mo­da­tion to many?

Thus our Mus­tel Group poll ques­tion: “Which of the fol­low­ing state­ments comes clos­est to your own view? Short­term ren­tals of res­i­den­tial prop­er­ties should be dis­cour­aged to pro­tect the hous­ing sup­ply for lo­cal res­i­dents. Or: Peo­ple should be able to rent their prop­er­ties on a short-term ba­sis re­gard­less of the im­pact on rental hous­ing sup­ply.”

As they like to say on the In­ter­net, the re­sults may sur­prise you. Op­tion A—short­term ren­tals should be re­stricted for the com­mon good—won out, 56.4 per cent to 43.6 per cent. The sur­prises were in the break­down of the to­tals. Prop­erty own­ers, who might be ex­pected to look out for their own fi­nan­cial interests, were 53.6 per cent in favour of pro­tect­ing the long-term rental mar­ket. And the strong­est sup­port­ers of a free mar­ket with no re­gard for the needs of lo­cal renters? The youngest group in the sur­vey, the 18–34 de­mo­graphic.

You might have ex­pected the co­hort with the great­est num­ber of stu­dents and, pre­sum­ably, the fewest prop­erty own­ers, to be the most mil­i­tant about pro­tect­ing the rental mar­ket. The re­verse proved true, with 53.8 per cent of 18–34s sup­port­ing the rights of own­ers to rent— the only age bracket to of­fer ma­jor­ity sup­port for Op­tion B.

Do younger peo­ple see them­selves as fu­ture prop­erty own­ers? Or do they iden­tify as con­sumers, plac­ing more value on the wider choice (and po­ten­tially lower prices) of an un­reg­u­lated shar­ing econ­omy? Or is the younger generation dom­i­nated by be­liev­ers in un­fet­tered cap­i­tal­ism? Per­haps our next sur­vey should mea­sure the pop­u­lar­ity of Ayn Rand bro­ken down by age group. In the mean­time, Airbnb might want to crank up its ad buys—most Van­cou­ver-area res­i­dents re­main un­con­vinced.

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