Burned by the sharing economy
Local critics of vacation rentals likely using service themselves elsewhere
The newest enemy to be identified in The War On Real Estate is the proliferation of short-term rental (STR) suites in Metro Vancouver, the consensus being that their popularity has contributed to (a) the rental housing shortage, ( b) rising real estate prices, and (c) more overwrought media stories about rental housing shortages and rising real estate prices. I know at least one of the above is right.
Since the City of Vancouver proper contains over 75 per cent of the almost 4,800 STRs in the Metro area, its city council has been under the most pressure to do something about them. This, it has promised to do. I have no idea what that something would be, or if even doing that something is feasible, given the enforcement difficulties presented by the exponential growth of STRs. It should tell you something that stories about such rental services, of which Airbnb is but one of several in Metro, often use the phrase “technically illegal” to describe them, as if illegality could be measured in degrees, as if STRs were guilty of the same level of venality of, say, urinating in public. Be discreet enough and the law will look the other way.
But if the majority of STRs in Vancouver are illegal, then why, one asks, doesn’t the city prosecute them? Because, the answer out of city hall is that the prosecution of them presents the same problem as that of illegal suites (which, I am certain, outnumber STRs in Metro by many, many thousands). Despite what the public may think, the city does not have at the ready platoons of bylaw officers, who, at any rate, are otherwise preoccupied. They don’t go looking for STRs. So enforcement — as it is in the case of illegal suites — is complaint-initiated. Even when a complaint is received, investigations can take time. Evidence has to be assembled. “It becomes,” said Coun. Geoff Meggs, who is the city’s point man on the issue, “a very complex business.”
Other cities have legislated against STRs, some more successfully than others. Santa Monica, Calif., banned them outright, and in the nine months since the ban its city hall claims to have reduced the number of STRs to just under a thousand from an estimated 1,700. Santa
Monica, however, is a city of less than 100,000, and is a small, compact seaside enclave surrounded by Los Angeles. It also had to create and pay for an enforcement office, another level of bureaucracy. In much larger and more populous San Francisco, attempts to control STRs appear to have failed miserably. Most STR owners have ignored the city’s requirement to register, and since addresses are not given on websites, finding their suites and prosecuting them has proven difficult for the city’s new Office of Short-Term Rental Enforcement. After a year since the enactment of San Francisco’s new STR law, just over 100 cases have been closed. The biggest difficulty in legislating STRs appears to be their sheer number. One researcher put the number of Airbnb suites in San Francisco at almost 8,000, and he believes Airbnb accounted for only half of the STRs in the city.
Well, OK. The City of Vancouver will do what it can. But to me, the nut of this issue is not the proposition that STRs cause rental shortages, which remains unproven; it’s the social and economic dynamic that STRs represent. They’re another manifestation of peer-to-peer capitalism, part of the terribly misnamed “sharing economy” that has destroyed the market’s old foundations.
My colleagues and I were on the wrong end of peer-to-peer capitalism long before Airbnb came along. Once upon a time, it was ad revenue, and especially classified ad revenue, that a newspaper’s profitability depended on. Then along came Craigslist and eBay and Etsy and Kijiji and dozens of others, and within months, newspapers saw their ad revenues dry up. As I recall, no one called for those sites to be legislated or made illegal, and tens of thousands of journalists lost their jobs. Newspapers had no choice but to adapt to the new economy.
So here we have urbanites — many of them young, since they are most likely to be renters — identifying STRs as a cause of rental shortages. Yet the exponential growth of STRs attests to their popularity, and not just here but around the world. They are the manifestation of the boom in global travel. Airbnb, for example, now exists in 190 countries and 34,000 cities. And who uses its services? Urbanites with an insatiable appetite to see the world, and to see it as cheaply as possible. How many Vancouver renters, I wonder, have availed themselves of STR services in, say, Paris, which has also attempted to curb the growth of STRs? So why would those Vancouverites not consider themselves to be part of the problem they perceive STRs to be here?
It’s a new world, a new economy, and it’s one of our making, not Airbnb’s.