Responses to Airbnb’s report on Vancouver listings

Yesterday (July 7), Airbnb released some long-awaited numbers on its Vancouver listings and “hosts.” Various people, including me, have called for Airbnb to provide these Vancouver numbers since last June at least, but despite the promises of greater transparency contained in its November 2015 “community compact,” the pattern is for Airbnb to not provide this type of data unless under considerable public pressure or threat of regulations that could limit or reverse its growth, as is now the case in Vancouver.

So here are some quick responses to what I see as some of the most salient points included and missing from Airbnb’s report.

What’s missing

The big question Airbnb won’t answer

There is arguably one question that everyone wants to know about Airbnb’s impact on Vancouver’s rental market and that is this: How many entire, self-contained units of housing (i.e. apartments, suites, houses, laneway houses) are being used exclusively as short-term rentals (STRs) through Airbnb? That is, how many self-contained housing units might be available for tenants if not for Airbnb and similar platforms providing an alternative means for property owners to earn income from residential properties? Airbnb could easily provide its own straightforward answer this reasonable question based on its booking data but it has chosen not to. Why?

Airbnb states in its report that “We are committed to being transparent with our data and information with cities to help them understand the home sharing activity in their city.”

It could follow through on this commitment by answering the question above and also by ceasing to cloud the issues by referring to renting and subletting as “home-sharing.”

I think a reasonable estimate of how many entire units of housing are dedicated to full-time STR use is just over 1,000 (1,022). This is based on the December 2015 Vancouver data Murray Cox has provided and posted on his site InsideAirbnb. Cox has set criteria for “recently and frequently rented” and “highly available.” If you go to his site and select “only entire units” and also check those other boxes, this is the number you’ll arrive at. Cox has provided his definitions and explanations of how he collected his data in the “About,” “Behind” and “Get the data” sections of his website.

Total listings

Airbnb has not said how many total listings currently exist. Again, it could easily do this, so the question is, why doesn’t it?

It has provided figures for “total booked listings” (and the different room types) for 2015 and going back to 2013, which is helpful, but why doesn’t it say how many total listings there are as of – say, July 1, 2016? This is a basic figure it would be useful for policy-makers to know – how many units of housing (of all room types) are currently listed on Airbnb.

Airbnb could still make a distinction between total listings and “active listings” and provide its definition of that term in order to distinguish “active” from new or dormant listings, but it chooses not to.

Neighbourhood data

Airbnb has provided totals for the city as a whole only, which does not shed any light on the areas of the city that are most affected by Airbnb. My data shows that the neighbourhoods that consistently have the most Airbnb listings (Downtown, the West End, Kitsilano, Mount Pleasant, Fairview, and Grandview-Woodland) are also the areas of the city where most of the city’s rental units (and by extension, renters) are (see page 32 in this city report). Much of those areas are either zoned for multi-family housing and so have large supplies of purpose-built apartments,  or have a good supply of rented condominiums and/or secondary suites, the latter two of which housing types have been become increasingly important sources of rental housing during the past 30 or so years, when very little new purpose-built rental housing has been built. The overlap between the areas of the city that have the most Airbnb listings and the areas where most renters live is concerning given how many renters struggle to afford rent and how Airbnb’s business model provides a financial incentive to rent to tourists instead of tenants.

Comparison of the number of Airbnb units to total dwellings in the City of Vancouver

Airbnb’s report states that, “It is worth noting that, despite the year-over-year growth in listings that have been booked, only 4,400 entire home listings were booked in Vancouver in 2015 – which represents about a percent and a half of the total housing units in Vancouver.” This comparison is likely meant to allay worries about the impact that Airbnb is having on Vancouver’s rental housing supply.

What Airbnb overlooks and does not mention in this comparison is that all housing units (264,570) in Vancouver are not part of the rental market – in fact only just over half of them (136,135) were as of the 2011 National Household Survey. Further, the types of housing that are most likely to be used for tourist purposes through Airbnb are rented condos, secondary suites and rented houses (including laneway houses) and these make up a still smaller number of dwellings, at about 64,000 units according to various city sources (see here, for example). It seems more relevant to compare the number of entire units listed on Airbnb to these figures, rather than the entire stock of housing, about half of which is not available to tenants at all. Given that the city’s latest monthly vacancy rate was 0.6% for purpose-built apartments, and that the region-wide vacancy rate for rented condominiums was only slightly higher, at 0.9% (as of late 2015, according to CMHC), the number of entire units listed on Airbnb merits concern.

How hosts use the money they earn through Airbnb

Airbnb typically responds to criticisms of its negative housing impacts with references to how it helps the “urban middle class” afford their housing. In every city report that Airbnb puts out, it therefore includes a statistic on what percentage of hosts are using their Airbnb earnings to help “stay in their homes.” In Vancouver, Airbnb states that 53% of hosts “report being able to afford to stay in their homes because of the money they earned through Airbnb.”

But what Airbnb does not tell us is 53% percent of how many hosts? Is that 53 percent of all Vancouver hosts – or if not, how many did they actually survey and what was the response rate? This is typical of Airbnb in that when it releases figures, it often does not provide the information readers need to evaluate the quality and validity of the data: Where’s the whole number here? If the percentage is based on a sample, what was the size of that sample? Was it random or self-selected? Who conducted the survey? Was it Airbnb? If so, might that have had some effect on how respondents answered? It is well-known that Airbnb advocates for itself using the narrative that its “hosts” use their Airbnb income to pay for their own housing costs – people that earn money through Airbnb may be reluctant to diverge from that narrative. And obviously, with such a survey, there would be no verification of whether hosts actually do use their Airbnb income to pay their mortgage or rent instead of using it for any number of other purposes.

It is also notable that Airbnb makes no distinction between homeowners and renters when reporting this figure. Due to provisions in the Residential Tenancy Act prohibiting tenants from subletting without their landlords’ permission, it is unlikely that tenants are the main beneficiaries of the earning opportunities Airbnb provides, even though it is actually tenants who are most stretched to pay their housing costs. According to the 2011 National Household Survey, 48% of Vancouver homeowners have no mortgage at all. Meanwhile, 46 percent of renters (but only 29% of homeowners) are paying more than 30% of their gross household income on shelter costs (which is how CMHC defines unaffordable housing). So, Airbnb may be helping some people afford their housing, but not the ones who are most in need of that help. And by providing a financial incentive (through higher nightly rates) to rent housing to tourists on a short-term basis rather than to tenants on a long-term basis, Airbnb actually makes things much worse for tenants, except perhaps for those lucky few who have landlords willing to let them sublet through Airbnb. Tenants who rent out their units without their landlords’ written permission risk eviction.

Airbnb also states that, “The vast majority of Airbnb hosts first choose to share their space to pay the bills. Nearly three-quarters of Vancouver hosts report choosing to host on Airbnb because they want to earn additional income.” I’m puzzled by the juxtaposition of those statements. The motivations of “paying bills” and “wanting additional income” are not equivalent. Also, “paying bills” is so vague as to be meaningless. The category of “bills” includes everything from mortgage, rent, utilities and groceries to credit card bills amassed through dining out, going on vacation or making luxury purchases.

Other points

Listing growth

Based on the “total booked listings” figures Airbnb has provided, those listings have grown from 1,800 in 2013 to 6,400 in 2015 – an increase of 255%. This is rapid growth, but not surprising. Based on my data collection (including Murray Cox’s December 2015 data), I found that total listings in the City of Vancouver grew from 2,900 at the end of November 2014 to 4,278 as of December 3, 2015 – a 63% increase. This is lower than the increase in total booked listings Airbnb reports between 2014 and 2015 (86%), suggesting that my figures are conservative (though they are not comparing the same thing since Airbnb hasn’t released total listings for a particular date).

Room type percentages

I note as well that Airbnb’s figures on the percentage breakdown of room types is consistent with the preliminary listing data I collected and published here in June 2015, as well as with the data provided by Murray Cox of InsideAirbnb. Over the three dates I analyzed in 2014-2015, I found that the majority of listings (about 70%) were for entire units, with another approximately 28% made up of private rooms and a fraction (about 2%) made up of shared rooms. Airbnb’s figures for 2015 are 69, 28, and 3 percent, respectively.

Frequency of bookings

Airbnb’s report state states that “the vast majority of listings – more than 80% – are shared for fewer than 180 days per year.”

I find this very interesting. Airbnb is saying that 20% of its listings are rented (“shared,” in their terms) more than 180 days – six months – out of the year. It says the listings that are rented more than six months of the year are a variety of types, but it doesn’t provide a breakdown of those. Airbnb also states that 4,400 of its total 6,400 “total booked listings” in 2015 were entire units. If 20% of those entire units were booked for more than six months, that would mean 880 entire units.

It also seems to me that given the nightly rates charged for Airbnb listings, it would be quite possible for a property owner to make the same amount of money through renting a unit for less than six months on Airbnb than they could make by renting to a tenant at average market rents for the whole year. The property owner could choose to rent through Airbnb for four or five months and leave the unit vacant the rest of the time, thereby entirely avoiding having to deal with tenants or fulfilling the various responsibilities of landlords under the Residential Tenancy Act, which does not cover vacation rentals. Therefore, the six-month threshhold Airbnb has chosen to highlight does not necessarily capture the entire picture when it comes to how its business model encourages the use of housing for tourists rather than tenants. 

Airbnb’s response to Vancouver’s rental housing shortage

In its November 2015 “community compact,” Airbnb acknowledges widespread concerns over its impact on cities with housing shortages and promises to work with those cities to ensure that it doesn’t make those shortages worse. However, when asked whether Airbnb is having an impact on rents by a Globe and Mail reporter, Airbnb spokesperson Max Pomeranc said, “If you’re renting your own home, and you’re doing this a few times a month or a few times a year, it’s hard for me to imagine how you’re having that kind of an impact.” This on the same day that Vancity Credit Union released a report saying that due to the high cost of rent in relation to renters’ incomes and low vacancy rates, “Renting is no longer a viable alternative to owning for many working households in Metro Vancouver.” Airbnb’s response to questions over its impact on Vancouver’s severe rental housing shortage does not instill confidence that it will follow through with steps to ensure it doesn’t worsen our abysmally low rental vacancy rates.

Further, Airbnb could easily and instantly remove listings posted by hosts/operators who have more than one entire-unit listing – meaning that that one of those listings is not a primary residence – but it chooses not to.

Other benefits claimed

Airbnb’s report states that “neighbourhood businesses are benefitting from an influx of visitor spending.” This may be true to the extent that if someone goes away and leaves their primary residence vacant while they’re away, there is no one living in that space and spending money locally during that time. In this scenario, renting the space to a tourist would induce more spending, though not necessarily more than if the tourist had stayed in a regular hotel. However, this benefit does not exist when someone chooses to devote a unit of housing to full-time STR use instead of renting to a tenant. Tenants spend money in their neighbourhoods too and ultimately, residents who live in and contribute to their communities in all sorts of tangible and intangible ways bring much greater benefits than temporary visitors.

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3 thoughts on “Responses to Airbnb’s report on Vancouver listings

  1. I was a long time Airbnb host until recently. I rented out a spare room in my condo downtown, probably the most requested area. I can tell you though that bookings drop off dramatically after the summer. Between October and April, there are very few bookings even after slashing prices. Others may have better luck but I doubt it. I have only positive reviews from my guests. What I concluded was that you cannot make as much money from airbnb than if you rented it out all year long. And if you have to pay someone to manage and clean the place for you, then it’s really not worth it. (If you’re outside of downtown, then it’s even more challenging.) You can make it work in other cities – I also hosted in DC and got bookings year round. But Vancouver is too seasonal – trust me. Listings that show more bookings are probably achieving those numbers through longer-term rentals (people renting for one month or longer because they have contract work here). If these short-term furnished rentals, which are legal, aren’t facilitated through airbnb, they will be facilitated by other websites – just like before.

    I don’t intend to take on a roommate now – too old for that. So it won’t make a difference for the local rental market.

    My own view is that airbnb may contribute somewhat to the problem of capacity but it plays only a small role. Banning airbnb won’t address the problem enough for people to notice – not in Vancouver anyway. It’s also unwise. Like it or not, our economy is moving in the direction of more contract work involving more travel and temporary relocation. We’re not locked down with one employer in one city and traveling only two weeks out of a year. Giving homeowners (and even renters) more flexibility is the right thing to do.

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  2. “The property owner could choose to rent through Airbnb for four or five months and leave the unit vacant the rest of the time, thereby entirely avoiding having to deal with tenants or fulfilling the various responsibilities of landlords under the Residential Tenancy Act, which does not cover vacation rentals. ”

    Why would they do this instead of renting for the entire year? What would be the point in forgoing the rental income?

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    • As it says right there in the same paragraph, avoiding having to deal with tenants and not having to comply with responsibilities of landlords under the Residential Tenacy Act. On call-in shows and in newspaper reports, it is common for landlords to cite “bad tenants” as a reason for switching from long-term to short-term rentals.

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