Early evidence suggests British Columbia’s recent restrictions on short-term rentals have led to a notable decrease in listings, according to a recent study.
The rules limit short-term rentals (STRs), such as those offered on platforms like Airbnb, to within a host’s home or a basement suite or laneway home on the property where they reside.
The change, which aims at addressing the housing affordability crisis, went into effect in May for close to 80 B.C. communities, most of which have 10,000 or more people.
Since then, almost 16 per cent of frequently rented entire-home listings in these areas were not visible on Airbnb by July, according to the study, which was conducted on a freelance basis by McGill University professor David Wachsmuth and commissioned by the B.C. Hotel Association.
It says the change was most noticeable in northern B.C. and on Vancouver Island.
At the same time, Wachsmuth’s findings — which were analyzed by researchers from the Urban Politics and Governance research group at McGill University — found no observable decrease in listings in areas without the restrictions.
“We’ve seen very directly thousands of formerly full-time short-term rentals leave the short-term rental market,” Wachsmuth said in an interview with CBC’s The Early Edition on Wednesday.
But it’s still unclear what happens to these units after they are removed from the STR listings.
Wachsmuth said researchers and policymakers will have to wait for the Canada Mortgage and Housing Corporation to release its annual data in order to see the rules’ exact impact on vacancy rates and the number of long-term rentals.
Craig E. Jones with the Housing Research Collaborative doesn’t agree with a new report commissioned by the B.C. Hotel Association that says that the province’s short-term rental rules are working. BC Today callers share what’s working and what’s not when looking for affordable housing.
In addition, his report says B.C. neighbourhoods that had municipal STR restrictions in place at the start of 2023 paid less in rent by the end of the year than they would have without those rules. For instance, it says renters in Vancouver — which has had STR rules since 2018 — paid around $150 less per month on average.
The study calculates that communities under the provincial regulations could therefore see a four per cent decline in rent by 2027 — totalling $592 million per year — if they have the same efficacy.
“This implies that, if the province’s STR rules were to be repealed after 2024, within two years B.C. renter households in these cities would have paid an extra $1 billion in rent,” the study added.
That’s a finding the B.C. NDP is highlighting one month before the provincial election, saying that B.C. Conservative Party Leader John Rustad recently told supporters he would reverse the short-term rental restrictions.
“[Rustad’s] plan to scrap this new law would turn long-term homes back into short-term rentals and drive up rents. That’s a risk people can’t afford,” Housing Minister Ravi Kahlon said in a statement.
David Wachsmuth, an assistant professor of urban planning at McGill University, has released a report commissioned by the B.C. Hotel Association he says shows the province’s short-term rental rules are working. He says the number of active short-term rentals in B.C. has dropped by nearly 16 per cent (15.8%) since the restrictions came into effect this past May. Wachsmuth conducted the research as a freelancer outside of his position with the university.
But the study’s findings have also faced pushback.
In a statement, Airbnb said the study used data from before the provincial legislation was even tabled.
“Let’s be clear, this report has no connection to the provincial law that went into effect on May 1 of this year,” said Nathan Rotman, policy lead for Airbnb in Canada.
“There is no evidence that shows restricting short-term rentals will support housing affordability. In fact, credible reports show that restricting short-term rentals do not help make housing more affordable.”
Rotman pointed to several studies including a Statistics Canada report that identified more than 100,000 short-term rentals could be homes, but the figure makes up less than one per cent of Canada’s total housing stock.
Craig Jones, associate director of UBC’s Housing Research Collaborative, told CBC’s BC Today on Wednesday that a Conference Board of Canada report in 2023 looked at similar questions but found there was no statistically significant relationship between Airbnb activities and rent.
“There are a couple of key methodological differences in [Wachsmuth’s] report, which could lead to some different outcomes,” he noted.
A provincial rule to limit short-term rentals to a homeowner’s principal residence plus one secondary suite or accessory dwelling comes into force in British Columbia on May 1 in 60 communities. As Zahra Premji reports, 17 additional communities have chosen to opt in to the rules, despite being exempt.
Wachsmuth told The Early Edition that the data he used comes from an academic study that is currently being peer-reviewed, and his report summarizes its portion about B.C. He said it used a methodology called “difference in differences,” which is “pretty much the gold standard for economic modelling” for such issues.
In addition to the STR restrictions, B.C. is also requiring rental platforms to regularly share data about its listings with the province, which Jones considers to be good policy.
“The more we know, the better decisions that we can make,” he said.