This Magazine

Progressive politics, ideas & culture

May-June 2020

Inside Canada’s Airbnb crisis

First, it came for our housing, now it's coming for our neighbourhoods

Nicole Beier

Illustration by Marcia Diaz

Just this past year, Canadian news was constantly covering stories of vacation rentals, made possible by platforms such as Airbnb, taking the housing supply hostage. When Airbnb first launched its platform in 2008, allowing anyone to rent out their home to tourists, they unleashed a swarm of people who were desperate to “live like a local” while travelling. Many vacation hotspots, such as Prague, Barcelona, Amsterdam, Berlin, and New York were already accommodating a steady stream of tourists, and with the introduction of Airbnb tourists could stay in properties usually reserved for locals. At the beginning, it seemed like Airbnb units were a harmless addition to the hotel supply, but property owners realized they could charge tourists more money per month than a local would be willing to pay in rent. Seizing the opportunity to make some extra cash, property owners start to replace longer-term tenants with vacationers, turning their properties into what are now ominously referred to as “ghost hotels.” But what happens to a neighbourhood when the neighbours are tourists?

Moving away from guided tours and itineraries, tourists are now seeking out travel experiences that are considered “authentic,” made possible by staying at an Airbnb in a neighbourhood not typically visited by tourists. However, neighbourhoods that have seen a growth in tourists have also seen detrimental changes as the tourists start shopping alongside the locals. Because tourists have higher purchasing power and different sleeping hours, businesses start to cater to the tourists over time. Soon local businesses like mom-and-pop grocery stores and pubs shutter their doors and are replaced with chain restaurants, expensive coffee shops, and high-end bars that can afford to pay higher rent for their storefronts.

The residents left behind in Barcelona, in neighbourhoods affected by the changes, have reported feeling like their city was “up for sale,” and that they felt unwelcome in their own neighbourhoods. Particularly, the working class residents who work and live in the area are no longer able to afford expensive rent and the cost of goods.

I saw a glimpse of this phenomenon when I travelled to Barcelona in 2016. Although the city has charm and breathtaking sites, I had the underlying feeling that I was visiting a theme park. I spent a few days wading through large crowds, floating from attraction to attraction with nothing but bars, restaurants, and souvenir stands along the way. My favourite part of my stay was a midnight stroll, where I retraced the steps of a tour I had taken of the Gothic Quarter earlier that day, without the effort of peeking at attractions through groups of other tourists. Wandering the quiet, darkened streets, away from the crowds, I couldn’t help but wonder if living like a local in the most beautiful part of the city was even possible anymore.

Just as tourism has taken a toll on Machu Picchu and the beaches of Thailand, tourist desire to live like locals, made possible by Airbnb, is destroying the very soul that made these urban gems such desirable places to visit in the first place. Our quest for authenticity leaves the locals we seek to become left without the very thing that makes their neighbourhoods vibrant—a community, and a place to call home.

Airbnb cannot be directly blamed for this problem, but the platform aggravates the impacts tourists already have on neighbourhoods. Airbnb is not the only vacation rental platform, but it is by far the most significant, operating in 220 countries and regions, with a company valuation of $38 billion in 2018. In Canada, they bring in over $2 billion each year in guest stays and grew in use by 940 percent between 2015 and 2018. Alongside Airbnb’s growth, Canada, for the third year in a row, broke its record of tourist visits, with an estimated 22.1 million visitors last year.

How long will it be before Canada faces an Airbnb-fuelled crisis in our cities’ neighbourhoods? It feels like it’s just a matter of time.

According to Airbnb, the boom in use of the platform has brought economic activity along with the tourists, upwards of $5.6 billion. From a survey conducted by the company of 10,000 users in 2019, 20 percent said that the platform offered them the opportunity to stay in specific neighbourhoods they wouldn’t normally stay in. More than 20 percent stayed on average five days longer because of the cost savings from Airbnb’s lower rates, spending their savings on food and shopping in the destination, all of which Airbnb said pumps more money into the local economy.

Thorben Wieditz is a researcher with Fairbnb, a “national coalition of homeowners, tenants, tourism businesses, and labour organizations.” Fairbnb’s research has found that instead of the tourist dollars supporting areas not traditionally visited by tourists, Airbnb is mostly operating in already tourist-heavy areas, “using housing stock as quasi-hotel inventory.” Although this can be beneficial for other local businesses, like restaurants and retailers, Wieditz said that Airbnbs are not contributing as much economic activity as they claim, by preventing investments in the hotel industry, creating tax avoidance opportunities, and reducing the benefits that come from unionized hotel workers.

But regardless of whether the money is going to hotels or local hosts, Airbnb is favourable because it brings revenues in non-traditional areas instead of hotel conglomerates, right? McGill University released an analysis on Airbnb across Canada in June 2019 and found that 10 percent of Airbnb hosts earn half the revenue from all Airbnb stays and more than 50 percent of all Airbnb revenue last year was generated by people who rent out multiple listings, rather than individuals renting out their private residences.

When digging a bit deeper, there is also a racial element to who makes money on this platform. From their data-combing research, Inside Airbnb, a website acting as ” an independent, non-commercial set of tools and data that allows you to explore how Airbnb is really being used in cities around the world,” found that in predominantly Black neighbourhoods in the United States, the majority of hosts are white, and Black hosts make 530 percent less on the platform than white hosts. As the Airbnb trend continues to grow, it’s starting to look like Airbnb has developed a tool for increasing the wealth of mostly white property managers, while operating as another hotel conglomerate—unregulated and untaxed.

Ryan (who prefers to be identified by first name only) is a photographer for the Instagram account @augustaandbaldwin and has been a merchant in Kensington Market since 2010. Located in Toronto’s Chinatown, Kensington Market is a pedestrian and artist-centred, multicultural neighbourhood with 240 businesses such as vintage stores, butcher shops, and international food shops. Ryan has noticed people who live in the market have been pushed out due to vacation rentals and says “the market has visitors from across the city and around the world. A one-night visitor won’t be shopping the same as a resident, so there will be an effect on buying patterns.” As commercial rent in Kensington Market is tripling, forcing businesses out in favour of those catering to a wealthier clientele, Ryan says he is hopeful a balance can be struck between tourism and the locals, because “the neighbourhood is nothing without the people that live here every day.”

In Ottawa, city councillor Catherine McKenney (Ward 14–Somerset) is concerned about the effects an Airbnb increase will have on residents, expressing that “if a whole area of the city is converted into short term rentals, businesses will suffer” due to disruptions that occur when neighbours are no longer neighbours, but tourists. As the ward starts to see more issues arise from short term rentals, “that has an impact across the whole neighbourhood, including businesses.”

In the Maritimes, Charlottetown has seen up to one in 50 private dwellings listed on Airbnb, the second highest per property list rate of Airbnbs in Canada. Despite the increase in listings, when questioned, there doesn’t seem to be impacts facing business owners yet. However, in a survey conducted by city planners, 213 residents answered that they are concerned vacation rentals will “threaten the character” of their neighbourhoods. One person even commented that “seasonal short-term rentals means that renters have to move in order for tourists to have a convenient place to stay. It is detrimental to the health of our communities.” With an extremely low rate of empty housing across the province, a boom of ghost hotels, and tourism continuing to grow for the sixth year in a row, how much longer will it be until Charlottetown residents feel the effects?

With the flock of tourists sharing close quarters with residents, aside from the effects on retail, there are some accompanying nightmare scenarios taking place across the country. For example, Ottawa, Newmarket, and Toronto have recently suffered deadly shootings at parties hosted in Airbnb rentals; Prince Edward County residents have found themselves surrounded by dark empty houses in low tourist seasons, and two Calgary homeowners were forced to leave their home for months after guests trashed the place and left it “covered in biohazards.” These types of scenarios make living difficult and uncomfortable, and leave locals no choice but to move elsewhere.

But there is hope: Canadian municipalities and provinces are recognizing the potential problems that Airbnb is bringing with it and are taking action. To target property owners who have multiple listings in vacant homes or units, cities like Toronto, Ottawa, Vancouver, and Oakville—as well as the province of Quebec—are requiring hosts to obtain a business license in order to list their place on the website. Toronto, Kitchener-Waterloo, and the province of Alberta are taxing the hosts, guests, or both.

Kathryn Holm, the director of licensing and community standards at the City of Vancouver, who worked on the local regulations, said the city wanted to find a way of “allowing folks to run a short-term rental business out of the place that they call home.” The policy supports tourism by providing accommodation options in neighbourhoods that aren’t serviced by hotels, so the rentals will disperse more evenly across the city, something Holm is already seeing after one year of the policy being in place. Airbnb supports the policy by requiring a business license on all listings in Vancouver and passing that information to the city on a regular basis.

With Ottawa regulations on the way, McKenney is hopeful. They said the Ottawa bylaws are some of the strongest they’ve seen to protect neighbourhoods. The “local hotel industry will be healthier, and so will our entire neighbourhoods—parking, recycling, and garbage—the things in residential neighbourhoods we count on to keep our neighbourhood healthy and sustainable.”

As with most other so-called “disruptive technologies,” Airbnb was fully embraced by users, praised for providing an opportunity for anyone to rent out their home and earn extra cash, free from the restrictions of hotel-like regulations—a true capitalist dream. The purpose of this platform, and the purpose that Airbnb espouses still, is that it brings tourists to “off-the-beaten-path” locales and boosts tourism revenue in Canadian cities. But it may be that if left unregulated, Airbnb will transform neighbourhoods and cities right before our eyes. Yes, Airbnb’s platform brings money into neighbourhoods across Canada, but we also need to protect existing businesses and the unique neighbourhoods that make our cities some of the most livable places in the world. There are valuable lessons that Canada can learn from the Airbnb crises in international tourist hubs like Barcelona and Berlin. With a little smart policy and planning, Canada’s municipalities may be stepping in to address Canada’s looming Airbnb-fuelled crisis just in the nick of time.

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