Jae Lazar moves more than she would like.
A single mother of two, she has lived in the District of Tofino, on Vancouver Island, for much of the past three decades, but was never in a position to buy a home. As with many renters in Tofino, Ms. Lazar has bounced around from home to home, given that many landlords rent to vacationers during the peak summer travel season.
It got worse, Ms. Lazar said, “once the Airbnb thing took off.” Over the past five years, she’s aware of at least five homes where she once lived that were later rented to vacationers, including on Airbnb.
“Raising babies young and alone, I never got into the market myself and missed out terribly, and then became one of those Ping-Pong balls in that town," she said. “I became completely disposable.”
Like Tofino, small towns and cities across Canada are grappling with an explosion of Airbnb activity that poses a threat to local rental supply.
A new McGill University study, shared exclusively with The Globe and Mail, finds that roughly 31,000 homes were rented frequently enough on Airbnb last year that they were unlikely to have a permanent resident. More than one-quarter are in rural Canada. (In the study, rural areas are those places with a core population under 10,000.)
“[Short-term rentals] are growing faster, concentrating faster and removing housing from the long-term market faster in rural areas” than in urban markets, the report said.
It found that active Airbnb listings and revenue were highly concentrated in four municipalities: Whistler, B.C.; The Blue Mountains and Prince Edward County in Ontario; and Mont-Tremblant, Que. In particular, there was “extreme revenue concentration” in Whistler, where Airbnb hosts earned $87.8-million last year. Over all, hosts in rural areas earned $570.5-million in 2018.
To some degree, vacation rentals have migrated onto Airbnb, which has become a popular global platform with more than five million short-term rental listings. “It’s just another place to advertise your property,” said Jason Watts, owner of StayTofino, a rental agency that lists on several websites, including his own and Airbnb.
But as short-term rental platforms have grown, local politicians have been forced to beef up regulations in a bid to keep living conditions affordable for local workers.
Across Canada, many jurisdictions now have zoning bylaws that restrict short-term rentals to certain areas, and often homeowners must obtain business licences and display registration numbers on listings. Beyond that, officials have opted for a variety of approaches to contain growth.
For instance, in Nelson, B.C., a popular ski destination, there are limits on how many licences are issued. And in Niagara-on-the-Lake, Ont., short-term rentals must front a public road and have parking.
“One of the things we suggest for smaller communities, typically, is to try to draft rules that are simple and easy for people to follow," said Alex Dagg, director of public policy at Airbnb Canada.
Still, the McGill report noted that enforcement will be a struggle for smaller communities. Because they have “fewer resources” and “less leverage” over rental companies, “this could make it difficult to prevent increasing housing-affordability issues.”
Tofino has lived through this. The district has regulated short-term rentals since 2004, well before Airbnb was founded, although Tofino Mayor Josie Osborne says local council was still hearing of residents getting evicted, only for their places to get turned into vacation rentals. There are currently more than 300 listings in the district of just under 2,000 residents.
In response, Tofino started using the services of Host Compliance, a U.S. company that mines digital platforms for rental listings; local officials are able to log into a database to help identify whether listings are properly licensed. The district has issued $500 fines for non-compliance since 2017. Ms. Osborne says compliance is well above 90 per cent, a level with which she is comfortable.
“But,” she added, “it’s still a concern that short-term renting is contributing to increased property values and making it even more difficult for local residents to own their own homes.”
Gary Sulz, mayor of Revelstoke, B.C., has noticed similar hardship in his city. While vacationers are in short-term rentals, workers in the hospitality industry “are living in cars and trucks and campers on the streets, or 15 of them living to a home to be able to afford the rent,” he said.
The McGill report found that commercial operators, or those who manage multiple listings, play an outsize role in Canada’s Airbnb market, generating nearly half of total revenue in 2018.
Prince Edward County, about three hours east of Toronto, is seeing this trend play out. Mayor Steve Ferguson said speculators are “going on shopping sprees” for up to four properties at a time “with the sole intent of converting them to short-term accommodation.”
Beyond housing supply, he worries about short-term rentals changing the fabric of a community.
“The net effect is that entire neighbourhoods [in Prince Edward County] were going dark, because houses and properties would be in full use from the May 24 weekend to Thanksgiving, and then … kaboom, there’s nothing going on.”