Canada's housing agency is looking to an unlikely ally in a bid to boost the stock of affordable rental housing: Airbnb.
The head of the Canada Mortgage and Housing Corp., says he believes short-term rental companies like Airbnb and Vacation Rental By Owner (VRBO) could help increase the rental supply in the country and, in turn, possibly reduce rents.
The government's upcoming national housing strategy will have a heavy focus on increasing the supply of affordable housing options, including rental units and Airbnb alone offers the potential for tens of thousands of units.
CMHC chief executive Evan Siddall said his agency recently approached Airbnb, the largest such service in Canada, to see if there are ways to turn those short-term rentals into apartments available to locals to rent for longer terms. He cautioned that it was still early days with a lot of details yet to work out.
"I think VRBO and Airbnb should get ahead of this, because they could be giving us some social utility by helping us spawn supply," Siddall said in a recent interview with The Canadian Press.
Lindsey Scully, a spokeswoman for Airbnb, said the company is speaking with potential partners about ways to "create economic opportunity for everyday people."
"We take the issue of affordable housing seriously and that is why we are collaborating with communities and organizations across Canada, sharing comprehensive data and detailed information about our community," she said.
The supply of purpose-built rental units in the country has been on a decades-long decline as developers build more condominiums than apartments.
As a result, the rental vacancy rate in 2016 was 3.7 per cent nationwide, CMHC research shows, a number that glosses over acute shortages in some cities. Vancouver, Victoria, and Kelowna, for instance, all had vacancy rates under one per cent in 2016, meaning there were limited options for renters and the conditions in place to push rents higher as demand outstripped supply.
The shortage is equally acute in the secondary rental market that has sprung up over the last eight years as condominium owners rent out their units to make a profit. A CMHC survey of 22 cities showed vacancy rates in these condominiums ranged from a low of 0.3 per cent in Vancouver to a high of 6.8 per cent in Edmonton.
Into this mix enter home-sharing services and concerns that they have further eroded the supply of rental units.
Airbnb says its hosts typically share their homes on average up to 60 nights per year, earning themselves about $4,000 – figures that the company suggests aren't high enough to support the idea that it is squeezing units out of the long-term rental market.
In a study published this summer, a McGill University research team estimated that Airbnb hosts have removed about 13,700 units from rental markets in Montreal, Toronto and Vancouver, or about two per cent of the total housing stock.
The authors argued that services like Airbnb would pull more long-term rentals off the market as home and condo owners see more money to be made through short-term rentals.
"We're not even close to the situation where there's enough supply of rental housing to meet demand and when you're in those very, very constrained situations, then even just a couple thousand units getting pulled off the market by Airbnb can have a really major impact on prices," said lead researcher David Wachsmuth.
To keep those units in the rental market, governments have to create incentives where few currently exist, said said Wachsmuth, an assistant professor of urban planning.