Why regulate home-sharing services?

Plans for legislation seem to lack a concrete goal

It seems inevitable that Calgary city council will usher in new regulations for home-sharing services such as Airbnb, but it’s still not exactly clear why.

At this point, regulations feel more like a solution in search of a problem — or at least a clearly-identified problem. Without a coherent explanation of what exactly it is we’re trying to accomplish, it only increases the risk of having poorly conceived and ultimately counterproductive rules.

Let’s hope councillors will tread carefully and be cognizant of the pitfalls of regulations for the sake of regulations.

Last week, a council committee voted unanimously to develop licences for so-called “tourism accommodation operators.” Such an approach will likely include a “tiered” category of licence for home sharing and short-term rentals, but administration would have until late 2019 to draft these regulations and so we’ll have a long wait before seeing the final details.

This is similar in certain ways to the debate around Uber, with one obvious and significant difference: whereas we were debating whether to allow Uber into Calgary, Airbnb already is here and has been for a number of years. So while last week brought us various anecdotes about hypothetical or potential problems associated with Airbnb, it’s not clear what the negative impact has been that we’re trying to mitigate through regulations.

We’re still invoking the incident from three years ago when a Calgary couple had their home trashed by Airbnb renters, causing upwards of $150,000 in damages. It should be noted, of course, that Airbnb paid for the damage at the couple’s home and so it’s unclear what this is supposed to represent in the current debate.

There were other anecdotes shared about neighbourhood disruption, such as noise, parking or garbage issues, as a result of certain Airbnb listings — in particular in homes where multiple rooms are rented out simultaneously. However, we already have bylaws that address many such issues, and it’s not apparent how tiered business licences would solve this specific problem.

There’s also been concern raised about the potential impact on the hotel industry, which very much echoes the taxi industry’s concerns about Uber. However, there’s little actual evidence to provide a clear answer to this question, and we should not regulate based on mere assumptions. For example, a 2016 study from MIT’s Centre for Real Estate looked specifically at Airbnb’s impact on hotels in Toronto and actually found “a statistically positive impact on the change in the number of hotel room nights sold.”

There’s a similar lack of evidence around the question of whether Airbnb is having any sort of negative effect on the availability of housing in Calgary. A broader snapshot of available data would seem to tell another story: a cool housing market with an abundance of homes on the market and a rental vacancy rate that, while down from the recession, is still well above the national average.

Moreover, we should not lose sight of that fact that with Alberta’s economy in a precarious position at the moment and with the possibility of further interest rate increases in 2019, the ability to draw extra income for homeowners through services like Airbnb may be what allows them to continue to be homeowners. Let’s be very careful about taking away those opportunities or putting in barriers that make them out of reach for many.

Additionally, if there remains a market for those Airbnb listings, it means tourists are visiting Calgary and spending money in Calgary. We can assume that those would come anyway absent the Airbnb option or fewer such choices, but that’s another dangerous assumption we cannot afford to make right now.

None of this is to say that home sharing or short-term rentals should remain completely unregulated, but rather that cities need to have a clear purpose in doing so and need to be smart in following through. Hopefully, that’s the outcome here.