Short-term rental platforms are exacerbating the nation’s already alarming lack of housing supply, industry players say
Airbnb and its seemingly insatiable hunger for Canada’s residential units are major factors inflaming the ongoing housing crisis, according to Thorben Wieditz, executive director of Fairbnb Canada Network.
“Short-term rental platforms such as Airbnb have helped convert tens if not hundreds of thousands of residential units into dedicated, ghost hotel suites,” Wieditz argued in his recent contribution to The Globe and Mail.
“Units once planned, zoned, approved and built as residential have been converted to commercial space to accommodate the travelling public.”
Wieditz cited a recent report by McGill University, which estimated that approximately 17,000 housing units had been lost to rental platforms in British Columbia just this summer.
“Studies have shown repeatedly that a minority of hosts control the majority of Airbnb’s inventory and are responsible for most of the company’s revenue,” he said. “In BC, 20% of hosts are responsible for 48.8% of total revenue generated, while the top 1% of hosts – just 1,930 operators – accounted for 20.7%.”
The trend is exacerbating the nation’s already alarming lack of housing supply.
“Our inability to produce housing fast enough to accommodate new Canadians has dominated recent headlines,” Wieditz said. “Scarcity drives up costs, so the argument goes, and makes housing less attainable and affordable to those in need of long-term accommodation.”
Wieditz said that his organization continues to call for greater provincial-level oversight on these platforms “to ensure that every housing unit planned and approved as residential will not be converted into quasi-hotel use.
“The idea is simple: Establish province-wide registries for hosts to register their properties and tie them to people’s principal residences.”
Aled ab Iorwerth, Deputy Chief Economist at CMHC, voiced concerns about housing supply challenges in Canada, citing difficulties in accessing capital and higher #interestrates affecting #housingstarts in 2023.
— Canadian Mortgage Professional Magazine (@CMPmagazine) September 28, 2023
https://t.co/LKZMvolJQg#mortgageindustry #housingmarket
Feds pledge substantial funding towards rental housing
Last week, Finance Minister Chrystia Freeland announced that the Canadian government will be deploying another $20 billion in funding towards the construction of purpose-built rental housing nationwide.
“This change is the next step in the government’s plan to build more homes, faster, and will unlock low-cost financing for multi-unit rental construction,” the government said. “This new measure will help to build up to 30,000 more rental apartments per year.”
The announcement followed the introduction of Bill C-56, the Affordable Housing and Groceries Act, the week prior.
The feds said that the aim of the new legislation, which removes the GST on new rental housing construction across Canada, would be to incentivize the construction of more apartment buildings, student housing, and senior residences.
