By Luke Carroll
More than 1,019 Ottawa-area homes have been taken off the rental market as a result of Airbnb and other home-sharing services, according to a study published by McGill University.
The study titled, Short-term rentals in Canada, found that Airbnb and other home-sharing services were responsible for keeping 31,000 homes off Canada’s long-term rental market.
In Ottawa, Airbnb has experienced rapid growth, going from fewer than 2,000 listings in January 2017 to more than 4,000 in July 2017 and remaining stable at that level since then.
“It’s kind of catching up to some of the big cities,” said David Wachsmuth, one of the report’s co-authors and a McGill professor. “It really was lagging behind prior to the last year.”
Airbnb spokesperson Alexandra Dragg said she disputed the legitimacy of Wachsmuth’s study.
“Airbnb takes housing affordability seriously. In fact, thousands of families have come to rely on home-sharing to help make ends meet and afford to stay in their homes,” she wrote in an email. “This report is based on scraped data from our public site — so without all the information, faulty assumptions are made about our hosts and how they use our platform.”
Dagg also claimed Wachsmuth had a special interest as he had done work for and spoken at hotel lobby group events in the past.
The study was fully funded by the Government of Canada.
The largest concentration of Ottawa Airbnbs are found around Rideau and Somerset streets, something that caught the attention of Catherine McKenney, Somerset ward councillor and liaison for housing.
“The increase in short-term rentals is having a very negative impact on affordability, especially in the downtown core,” she said. “Rents are going up and supply is decreasing for anyone wanting to move into that private rental market.”
Airbnb’s short-term rental model can often be more desirable for landlords as it has higher profits and the tenants require less work.
Peter Vasdi has hosted on Airbnb for around three years, where he rents out two properties, one near Hunt Club Road and one downtown. Vasdi said he liked having Airbnb’s oversight as he didn’t enjoy his previous experience renting his property.
“They’re very professional. When I call with anything, they answer within half an hour or even sooner. They know their stuff,” Vasdi said of Airbnb’s staff. “I rented before, rented rooms before, and that was a horrible experience.”
However, Airbnb growth in Ottawa comes at a particularly tough time for renters, with vacancy rates holding at 1.6 per cent in 2018, according to the Canada Mortgage and Housing Corporation’s Rental Market Report.
The low vacancy rate runs against a high demand for rentals because of a growing population, with Ottawa officially hitting one million residents in mid-June.
McKenney said the city had its own numbers for exclusive short-term rentals and found similar results to Wachsmuth’s study, including a statistic that found the number short-term rentals had increased by more than 250 per cent over the past two years.
“It almost has eliminated any availability of rental vacancy, especially in the core,” McKenney said. “I get calls almost once a week now from people being asked to vacate their apartment … We know that they are being turned into short-term rentals.”
McKenney said this was having a chain reaction, causing a growing homeless population. She said each year Ottawa Community Housing used to move about 2,000 households into the private rental market, but, because of a shortage of affordable housing, that number had decreased to about 1,200.
“That means that you have about 800 other households that can’t come into community housing and that puts pressure on our homeless population,” McKenney said.
McKenney said Ottawa was watching what other cities — particularly in Europe — were doing to regulate Airbnb. She said the primary issue for the city was commercial short-term renting. McKenney said one person in Ottawa has 72 properties available for short-term rent and these “ghost hotels,” as she refers to them, don’t meet zoning permits, nor are they allowed in residential neighbourhoods.
“Those exclusive short-term rentals, we need to regulate them,” McKenney said. “They’re already operating illegally.”
Bob Plamondon, an Ottawa tax policy expert who has served as a consultant to the Hotel Association of Canada, said cities can pass bylaws to try and hold short-term rental landlords accountable, but it is really the federal government’s jurisdiction to update tax laws.
“Government’s should not enable and support policies that encourage the development of an industry in which they are not contributing or paying taxes,” he said. “When an industry enjoys a competitive advantage … it will enable it and encourage it to grow.”
Plamondon said Airbnb should have to pay a corporate income tax, charge a sales tax on customers and ensure hosts have to enter their earnings into the income tax system. He said British Columbia and Quebec had done the best job of adapting to this system, but more needed to be done.
McKenney said although she’s having issues in her ward, there is legitimacy to people renting out an extra room in their house or for a student to rent out their apartment while they go home for the summer. However, she said, that market had become commercialized and the issue needed to be addressed.
“To have this happen just for sheer profit on our housing market is very difficult to watch,” she said. “We have got to regulate them, heavily.”