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Municipal Politics

Airbnb Hosts Are Already Plotting Their Post-Pandemic Comeback

If the short-term rental site rebounds, BC communities want to see better regulation.

Steve Burgess 29 Jun 2020 | TheTyee.ca

Steve Burgess writes about politics and culture for The Tyee. Find his previous articles here.

Looking for a great place to stay in Victoria? The Janion is a gem. A restored 1891 heritage structure, it offers a perfect central location near the intersection of Store and Pandora streets, looking out over the Johnson Street Bridge. Plenty of options too — the Janion features Airbnb rental units top to bottom. And in a city where Airbnb is officially banned, it’s all perfectly legal.

The Janion neatly illustrates both the rapid evolution of Airbnb and the urban planning priorities with which it has played havoc. Founded in August 2008, Airbnb began as a useful online tool for budget travellers and a way for cash-strapped homeowners to pay off mortgages. It would soon grow into a largely unregulated, city-devouring colossus.

Once upon a time in the faraway mid-aughts, Airbnb did not exist. Many cities faced issues with decaying downtowns. As Paul Nursey, CEO of Destination Greater Victoria recalls, restoration of downtown heritage properties like the Janion was a cherished goal.

“The city wanted to bring more life to downtown,” he says. “Developers said ‘We need more flexibility.’ Liberal zoning regulations allowing for short-term rentals helped make these projects more attractive. The idea was to attract people and visitors downtown and make the area more vital. Then Airbnb exploded.”

Like cane toads in Australia, a solution rapidly became an even bigger problem. Victoria eventually moved to shut down the short-term rental market as it spread through the available housing stock. “We have made Airbnb illegal,” says Victoria Mayor Lisa Helps, “except where we couldn’t.”

That would be the Janion, among other places. All told there are about 1,500 properties in Victoria grandfathered into Airbnb by pre-existing regulations. When such properties are sold, they lose that exemption but, Nursey admits, “I don’t think we’ll ever get it down to zero.”

Is Airbnb a solution or a problem? Many travellers have viewed it as a godsend, and some destinations too. Greg Oates, vice-president at California-based travel consultants MMGY, counts himself among the service’s biggest fans for a number of reasons.

“One is because it lets me experience the city in a unique way,” he says. “I don’t want to be around a bunch of other visitors. Another is that it has allowed me to visit places I wouldn’t have gone before because it would have been too expensive. I started going to [Austin, Texas music event] SXSW every year. It would have been too expensive to stay in hotels.”

But as with plastic bags, a useful convenience can metastasize into a global scourge. Jeroen Oskam, director of research at Hotelschool The Hague, is the author of The Future of Airbnb and the Sharing Economy. He says the company’s overall impact has been mixed at best.

“Airbnb has contributed to the growth of city tourism, which is judged as positive by some and negative by others. The main problem of Airbnb is the negative externalities it is causing in those cities. My opinion is that the effects of Airbnb have been plainly negative.”

“It’s complicated and contentious,” Oates admits, “particularly in resort towns.”

Airbnb depletes rental housing stock and tends to drive up residential rents. “You have young people who say I want to live in the community I grew up in, I want to work as a hostess, a waiter, a bartender,” Oates says. “If they can’t afford to live there now you are diluting the character of the community. You’re starting to mess with the DNA of the destination. And if the DNA is what destinations are differentiating themselves on, then you have some problems.”

In 2018, Vancouver signed an agreement with Airbnb requiring licenses for all short-term rentals and limiting hosts to rent space in their primary residences only. Fines of up to $1,000 a day can be levied for illegal activity.

Bob (not his real name), a 52-year-old father of one, runs an Airbnb in a small Lower Mainland community near Vancouver. It’s not his primary residence. “Without Airbnb my mortgage situation would probably be touch-and-go,” Bob says. “As it is, we’re still tight, but Airbnb makes it possible.”

He has done some business during the COVID-19 crisis, although not brisk. “I had three reservations in June, I have four for July,” he says. “Staycation situations, I suppose.”

Bob says he’s been scrupulous about disinfecting and believes that small operators like him have too high a stake in their operations to be careless. “My impression is the vast majority of Airbnb hosts in the Lower Mainland are mom-and-pop operations,” he says. “We’re not corporate managers with dozens of properties.”

Shenanigans are definitely there to be found, however. At least one anonymous Twitter account has devoted itself to tracking sketchy Airbnb operators in the Lower Mainland. Among others, “Mortimer” (who asked not to be identified) has turned the spotlight on a $12.6-million Shaughnessy mansion purchased in 2017 and almost immediately listed on Airbnb, and on an operator going by the name of “Charlie” who listed at least 10 different Vancouver properties, then changed his online name to “Kitson.”

Mortimer believes illegal operators are thick on the Vancouver ground. “It’s more widespread than some would think,” he says, “and it is being done by a wide array of people. I’ve seen illegal Airbnb listings from various professionals, including lawyers, accountants and real estate agents.”

“It’s hard to regulate, hard to enforce,” says Oates.

Vancouver Coun. Pete Fry thinks the city has done a pretty good job of going after bad actors but could also do better.

“I’m looking at one email from a building manager downtown,” says the Green Party councillor. “Out of 187 suites, over 40 are rented out as short-term rentals. They’re alleging parties, strangers in their buildings, questionable health and safety, ambulance and police calls, even criminal activities, all of this even during COVID lockdown. Other building managers are resorting to sleuthing through Facebook and Instagram to track down identities of guests and hosts because they can’t get answers from Airbnb or the city about what might be taking place in their buildings.”

Fry thinks the city must make it easier to report illegal operators. “Right now, a building manager or strata cannot search our database to see if the city has licensed a short-term rental in their building,” he says.

Enforcement problems aside, B.C. does not have the same degree of Airbnb activity found in some other jurisdictions. “In the U.S. it’s problematic,” says Oates. “You have property rights laws that state if you own a house the government can’t tell you anything you can do with it.”

Journalist Allie Conti's 2019 Vice investigation revealed an American bait-and-switch scam so widespread it led Airbnb to make changes to its corporate policy. Following publication of the article, Airbnb CEO Brian Chesky announced a year-long project to verify listings and eliminate the issue of glamorous-looking posts that are then swapped for rancid dumps after the renters are told of “unexpected problems.”

Nursey suggests Canadian cities don’t have the Airbnb problems faced by some major European destinations. “In places like Barcelona, Paris, Prague, they’ve seen the rise of the mega-hosts, with 11 or 12,000 properties,” he says, “the mass commodification of residential areas. We want to avoid that.”

Oskam estimates that Airbnb has claimed approximately 14 per cent of the accommodation market, the vast majority of it in leisure rather than business travel. That focus on tourist traffic suggests Airbnb operators may have been hit harder by the pandemic than traditional hotels, but who will come back stronger is anybody’s guess.

“Travellers might either opt for the security of consistent service at traditional hotels, or the security of avoiding human contact at Airbnbs,” Oskam muses. “I recently read an article in which doctors judged that the fear of contagion from other humans was stronger than that from contaminated surfaces, which would favour Airbnb.”

Oskam even imagines there might be a political inclination working in favour of Airbnb. “We know that a segment of the population is protesting against COVID-19 measures,” he says. Opposition to regulation is more likely to come from the right. “All of Airbnb’s issues and debates are related to the fact that the company and its hosts dodge regulation. So there is a potential audience there for a ‘risk-denying’ offer.”

Fry says there is a legitimate place for Airbnb — he has used the service himself. But he wants more steps taken.

“I’d like to see the cost of a short-term license in Vancouver increased to support more robust monitoring and enforcement,” Fry says, “and I support calls for the province to look at split classifications for short-term rental property use, where the percentage and duration of short-term rental relative to residential use is factored to come up with a fair commercial tax assessment.”

Meanwhile, Airbnb is suffering along with the industry it has challenged. Last fall the company announced it would be going public this year. Now the initial public offering appears to be in some jeopardy — no date for it has been announced. “The IPO represented a bright scenario, a time to cash in for the company owners,” Oskam says. “That brightness has now dimmed. COVID-19 has ruined their party.”  [Tyee]

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