Vancouver's short-term rental supply shrunk by 50% to 2,300 units

Mar 21 2022, 11:02 pm

The number of short-term rental listings within the boundaries of Vancouver collapsed by more than 50% compared to the period just before the pandemic.

A memo from City of Vancouver staff to Vancouver City Council in February 2022 states the number of short-term rental listings fell from over 5,000 units in December 2019 to about 2,325 units at the end of December 2021.

Airbnb continues to have an overwhelming dominance on the short-term rental market, with the City reporting it had an annual market share of 81% in January 2021. This is followed by Expedia’s VRBO and Homeaway at 16%, Flipkey at 4%, and Booking at 3%.

With overnight tourism dissipating overnight in early 2020 upon the onset of the pandemic, many short-term rental listings transitioned into becoming regular long-term rentals.

The depressed demand for short-term rentals was also apparent with the number of short-term rental business licenses issued by the city — 2,129 licenses in 2021, down from 4,151 licenses in 2019.

The memo to city council was in response to a June 2020 approved motion that requested city staff review the municipal government’s short-term rental regulations in the lens of COVID-19, long-term rental vacancies, and the recovery of the hotel industry.

In the memo, city staff are recommending that stricter regulations on short-term rentals to protect the supply of long-term rentals should not be considered until there is a greater recovery of short-term rental demand.

It is also noted that there is currently a greater dependence on short-term rentals to help meet the accommodations supply needs in order to support and sustain the rebound of the job-generating tourism industry.

There has been an immense attrition of hotel rooms in the city, with fewer rooms in existence in 2018 compared to the period before the 2010 Olympics; 1,105 rooms were removed over a decade before the pandemic, a further 1,674 rooms are at risk over the short- and medium-term for redevelopment into residential uses, and throughout 2020 and 2021 all three levels of government engaged in a buying spree of lower cost hotels for conversion to homeless shelters, supportive housing, and social housing.

But city staff note that protecting the long-term rental supply is the “fundamental priority” for its short-term rental regulations.

They cite the findings of an independent study conducted by McGill University’s School of Urban Planning, commissioned by the municipal government in September 2020. It was found that the city’s regulations on short-term rentals between 2018 (when the regulations began) and up to the start of the pandemic led to 1,090 fewer active short-term rental listings — a reduction of about 25% in the scenario where no regulations existed.

It is estimated that over 500 homes previously used as full-time, short-term rentals were transitioned into the long-term rental supply by late 2019.

Moreover, the regulations caused Vancouver’s short-term rental market to grow more slowly and in a “less commercialized direction,” compared to Toronto, Montreal and other cities in Metro Vancouver. However, the findings of the research also state illegal short-term rentals in Vancouver have “relocated” to neighbouring Metro Vancouver cities due to laxer regulations or enforcement in those jurisdictions.

The McGill study also found that over 800 long-term rental units that were previously short-term rentals before the pandemic had asking long-term rents that were 26% higher than the city-wide average, partially because most of these units were furnished listings within downtown Vancouver. It is also believed that most of the these converted units were previously suspected to be illegal short-term rentals, and that only 31% have fully transitioned to the long-term rental market.

“This suggests that the operators of these converted listings may plan to relist their property as STR once tourism demand recovers,” state city staff.

“There is apprehension that some of the long-term rental stock converted from short-term rentals due to COVID-19 impacts may revert to short-term rental once tourism demand recovers, leading to evictions.”

City staff have suggested that short-term rental regulations enacted by the provincial government would be more effective in ensuring compliance, compared to efforts performed on the municipal level.

For example, the provincial government could put in place a “night cap” that limits a property’s use for short-term rentals relative to long-term rentals. In other cities where such a regulation exists, night caps typically range from 90 to 180 nights.

City staff also addressed in their memo the ongoing judicial appeal by Airbnb against a previous ruling made by the Office of the Information and Privacy Commissioner that ordered the City of Vancouver to disclose the data on listings that it had received from Airbnb, and the municipal government’s own licensing data, for the period from November 2018 to March 2019. This includes the address of the short-term rental property, operator name, and the listed business license number.

The disclosure of this information — based on a Freedom of Information (FOI) request by a member of the public — was also opposed by the municipal government, on the basis of the FOI policy that prohibits a public entity to provide information if its disclosure would harm the business interest of a third-party.

City staff note that Airbnb provides the municipal government with its data on a voluntary basis through the company’s pilot program involving 10 cities around the world.

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