“Drew” is “very passionate in travelling and adventures and hope to introduce this beautiful city of Vancouver that we live in for our guests from around the world to enjoy as well!”
That’s what his Airbnb host description will tell you. What it won’t say is that he manages 22 different apartments around the city and makes an estimated half-million in income from them.
Casual hosts: Live in the unit being listed all or some of the time; Small commercial hosts: Property managers who do not live in the units being rented and operate one or two units; Intensive commercial hosts: Operate more than two listings in a single unit or structure; Extensive commercial hosts: Manage more than two units in more than one location.
Nor will the listing for Vancouver host “Sarah” say that she has 15 listings, from which she likely earns about $300,000.
Drew and Sarah are among the top 10 earners in a group of large, commercial Airbnb hosts that a local university student researcher has identified as dominating the Vancouver market in a business frequently portrayed as being about regular folks sharing their homes.
“The people making the most money are doing this kind of operation,” said Iain Marjoribanks, who used a method developed by the city of San Francisco to estimate the types of listings in the city and their earnings.
The new research comes as cities across the country, including Vancouver, struggle to respond to the growth of Airbnb, which Mr. Marjoribanks argues is having an impact on the rental housing market in a city with a near-zero-per-cent vacancy rate.
Mr. Marjoribanks estimated that commercial operators take in 77 per cent of the Airbnb revenue in the city.
Using the San Francisco methodology, he determined that 53 per cent of the 3,424 active listings in Vancouver as of last December were being run by commercial hosts – people who were renting anywhere from one to 20-plus units and didn’t live in any of them.
But those people made far more money than the “casual” Airbnb hosts, hosts who rented out a spare room or their whole unit when on vacation.
His reports classified commercial operators as one of three types: small, with one or two units being rented out more than 58 days a year; large commercial hosts who manage a number of units in one building, as if it is a hotel; and large commercial hosts who manage multiple units in multiple buildings, as if they’re running a hotel chain. The large commercial operators get about 27 per cent of the revenue; the small commercial operators about 50 per cent.
He estimated those commercial operators control 1,800 units of rental housing that have likely been taken out of the market to be used as short-term rentals, making them unavailable for people trying to rent long term, his report found.
“One problem is the city is now spending money to create rental housing [about $5,000 to $7,000 a unit], while people like Drew are taking rental off the market,” he said.
Mr. Marjoribanks, who interviewed both casual and commercial operators for his research paper done for a course at the School of Community and Regional Planning at the University of British Columbia, said they make more money because they’re often run by people who come from the hospitality or real estate sectors.
They run the units more professionally and make them look more attractive in photos.
“They have an expertise that makes them suited to this,” he said. “But they’re not the ones that Airbnb says are the majority.”
As well, they get help from Airbnb, he said, because “Airbnb pushes listings that are high quality.”
Mr. Marjoribanks’s work builds on work done by SFU student researcher Karen Sawatzky and independent researcher Murray Cox, who runs insideairbnb.com.
His results are similar to what New York and San Francisco officials have found when they’ve scrutinized Airbnb listings in their cities.
A New York Attorney-General’s investigation in 2014 into Airbnb found that big commercial operators controlled hundreds of units and that 6 per cent of hosts collected 37 per cent of the total Airbnb revenue in New York, about $168-million (U.S.).
A Penn State University study estimated that 30 per cent of Airbnb’s revenue in large metropolitan markets came from operators who were renting units all year round, making an average of $140,000 a year.
The City of Vancouver has staff investigating the situation locally and developing possible new regulations. Like other cities, many housing advocates and politicians are concerned about rental units being taken off the market.
Technically, people aren’t allowed to rent out units for less than 30 days at a time unless they are licensed bed-and-breakfast operations.
Practically, city inspectors only take action if there is a complaint and, even then, it is difficult to come up with the proof that someone is renting short-term unless an operator confesses outright or runs an advertisement on the street.Report Typo/Error