Who's renting what? 

New report says property managers are earning high rates of return on Airbnb

click to enlarge WWW.SHUTTERSTOCK.COM - Give it up Critics say Airbnb is taking over.

A recent report is raising concerns about who is profiting from Airbnb rentals.

The study — which focused on Montreal, Vancouver, and Toronto — found the majority of revenue earned by Airbnb renters went to commercial property managers with multiple listings.

According to the study's lead author, the report provides much-needed evidence for municipal leaders.

"I feel like there's a real hunger for data and actual facts," said David Wachsmuth, an associate professor of urban planning at McGill University. "It makes it easier for officials to decide if they need to act on it."

Drawing on information gathered by AirDNA — a third party organization that gathers information on Airbnb markets — Wachsmuth's team determined that since 2014 the number of listings in Canada's three largest cities has increased by 50 per cent every year.

According to the report, 10 per cent of hosts received roughly half of the $430-million yearly revenue.

Some commercial operators, explained Wachsmuth, have numerous properties, including San-Francisco-based Sonder, which has over 160 listings in Vancouver and Montreal. "There's very little distinguishing them from a hotel," said Wachsmuth.

In Montreal, the Plateau — a trendy neighbourhood with leafy streets and old-school Italian cafes — has proven a particularly popular tourist destination and with rent tending to be reasonable it's a profitable market for commercial operators.

Wachsmuth estimates at least 1,500 homes in the area are being rented out full-time on Airbnb, which means around two per cent of the housing market is offline.

That impact on housing, he said, can be even more pronounced in small resort communities and mountain towns, like Whistler and Pemberton.

Finding accommodation in such places has always been tough, he added. The fact that locals are now competing against tourists is making it even tougher.

"You don't flinch at spending $100 to $200 a night on renting an apartment (while on vacation)," said Wachsmuth, noting that it can be far more profitable to rent to tourists than locals.

"(But) it's not sustainable to have tourists competing for housing with locals."

Pemberton is currently in the process of developing a regulatory system for short-term rentals. Town planner Lisa Pedrini and Dan Wilson, from the Whistler Centre for Sustainability, are leading the effort, trying to craft policy that reflects the community's values.

For Wachsmuth, regulation should follow two basic principles: Hosts should only be allowed to rent their primary residence, and they shouldn't be able to rent it out for more than 60 days in a given year.

Enforcement, noted Wachsmuth, is a big challenge. He said that it should be left to Airbnb to do — which is something higher forms of government can make happen.

Airbnb has taken issue with Wachsmuth's findings.

"The author of this study has a history of manipulating scraped data to misrepresent Airbnb hosts, the vast majority of whom are middle-class Canadian families sharing their homes to earn a bit of additional income to help pay the bills," said Lindsey Scully, in an e-mailed statement to media.

"Only 320 entire-home listings in Vancouver home share frequently enough to outcompete long-term rentals, undercutting the author's baseless conclusions about housing units removed."

Wachsmuth expected Airbnb's reaction. The organization, he said, feels "threatened" because independent researchers around the world are coming to similar conclusions, and city "officials are recognizing they need to act and they're acting." 

That said, Wachsmuth has seen a shift in the company recently, with Airbnb being more willing to cooperate with communities.

He believes that within a year the "wild west days" of short-term rentals will be a thing of the past, as better regulationis implemented.


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