BC renters paying billions more in rent thanks to short-term rentals

Short-term rentals are having a significant impact on the long-term market in BC, and according to a report from McGill University, it could mean residents are paying billions more to rent.

The “groundbreaking report” was done by McGill University Professor Dr. David Wachsmuth, and it sheds light on how commercial short-term rentals influence rental costs in BC.

One of the most eye-popping findings from the report is that in June 2023, short-term rentals took 16,810 housing units off of the long-term market in BC, which marked a 19.1% increase compared to June 2022.

Additionally, the report found that BC renters would have saved $2 billion in rent between 2016 and 2021 “if there had been no commercial short-term rentals,” according to the report.

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The average BC neighbourhood in a medium or large city saw a $20 greater increase in monthly rent were it not for the resurgence of the short-term rental market in 2022.

“We estimate that commercial STRs explain $455 million of the total $10 billion in rent paid by BC households in large and mid-sized cities in 2022.”

“Province-wide, commercial operators have weathered the pandemic much better than home sharers.”

The report says while there are many casual home sharers, the short-term rental market is dominated by “a much smaller number of commercial operators.”

Based on 12,860 daily active listings in the Vancouver Coast & Mountains region in June of this year, host revenue totalled $59.3 million, a 30.3% growth compared to the previous year.

The pandemic stunted the growth that the short-term rental market was seeing, but by 2022, all regions were seeing “robust growth,” with the report adding that the pandemic’s impacts have now receded.

“In 2020, when the number of commercial STRs plummeted because of the pandemic, rents increased 29.7% less than they otherwise would have. By contrast, we estimate 2022 rents increased 16.6% over baseline because of the resurgence of commercial STRs that year.”

The report says the province and municipalities should share regulatory enforcement responsibility.

How are the province and city responding?

Vancouver recently announced that it would hike the short-term rental licensing fee from $109 to $1,000. However, based on the amount some commercial short-term rental owners make, that fee increase likely won’t impact them as much as the little guy. Meanwhile, the province is looking at ways to regulate the market.

The report says that the short-term rental market is “eroding rental housing
affordability across the province of BC.”

How do you feel knowing that commercial short-term rentals impact how much you pay for rent in BC? Let us know in the comments.