Support NeoGAF

[ponpo]

The Star

Airbnb hosts in Toronto, Montreal and Vancouver earned $430 million last year with the top 1 per cent of hosts taking $51.7 million, report finds

Large commercial players are dominating the short-term rental market in Toronto, Montreal and Vancouver, and raking in most of the revenue, according to research analyzing Airbnb activity.

And contrary to the Airbnb narrative that the online booking service is about regular people sharing their homes to help pay the mortgage, there has been disproportionately large growth of full-time, entire-home listings that belong to hosts with multiple Airbnb properties, according to a copy of a draft report prepared by the McGill University School of Urban Planning.

The report said the full-time, entire-home listings represent 6,500 properties across the three cities and account for more than a third of all revenue earned. In Toronto, growth in that category has increased more than 100 per cent from May 2016 to June 2017.

“More and more of the money is being earned by a smaller and (a) more kind of commercialized and sophisticated, large-scale set of hosts,” said professor David Wachsmuth, lead author of the report called “Short-term Cities: Airbnb’s Impact on Canadian Housing Markets.

The report bills itself as the first comparative analysis of short-term rentals in three major cities and is based on a data set obtained from Airdna, a data company that tracks the performance of Airbnb listings. The report also used data taken from the 2011 and 2016 censuses and Canada Mortgage and Housing Corporation’s rental market survey.

Airbnb spokesperson Lindsey Scully rejected the report’s conclusions.

“The author of this study has a history of manipulating scraped data to misrepresent Airbnb hosts, the vast majority of whom are middle-class Canadian families sharing their homes to earn a bit of additional income to help pay the bills,” she told the Star Thursday.

“The fact is, just 760 Airbnb entire home listings, or 0.07 per cent of the entire housing stock in Toronto, are rented frequently enough to outcompete a long-term rental, undercutting the author’s baseless conclusions about housing units removed.”

Wachsmuth said he stands by his team’s research — “my methodology is completely transparent” — and urged Airbnb to provide open data access to McGill researchers. He described as “completely absurd” Airbnb’s statement that only 760 entire-home listings on Airbnb are pushing out long-term rentals.

Wachsmuth also wrote a study, currently under peer review, of Airbnb’s impact on gentrification in New York City.

Where there’s no dispute is that there has been an explosion in the number of Airbnb listings in Canada. There are now 81,000 active listings in the three cities, up from 50,000 in May 2016, the draft paper said.

“More worryingly, in the same time period the number of entire homes which have been converted to full-time Airbnb usage has increased from 9,000 to 14,000 across the three cities,” said the draft report.

That means 14,000 entire homes, including condo units, have been taken out of the long-term rental market, at a time when there is scarce rental housing stock and a low vacancy rate.

“Every home that is converted to full-time Airbnb use is subtracted from the pool of actual potential long-term rental housing units in a city,” said the draft paper.

“These listings are growing around 25 per cent more rapidly than other categories of listings.”

The draft report also said that while a lot of money is being made using Airbnb, the big profits are going to commercial hosts who don’t live on the properties.

While Airbnb hosts in the three cities earned $430 million last year, 10 per cent of hosts earned a majority of that revenue, the report said. The top 1 per cent of hosts earned $51.7 million — more than 12 per cent of the total, the report said.

Nothing too shocking I guess. Can't decide whether Airbnb is shit for its impacts or cool for exposing interesting properties.

 

[Bitmap Frogs]

The whole "sharing economy" is a scam, people.

 

[Trouble]

This industry predates Airbnb by years. It's not surprising, or even necessarily problematic, that they use the new hot 'gig economy' service to rent their places.

 

[jufonuk]

So rich people find another advantage to make more money ?

Well if someone could rent out a massive beach house or penthouse for a few days to live the dream.

Not rich at all just playing devils advocate.

Property market in london is nuts and people find ways of trying to make money from it all the time.

 

[Jintor]

So rich people find another advantage to make more money ?

Well if someone could rent out a massive beach house or penthouse for a few days to love the dream. What's the harm?

permanent removal of the property from the rental market and sidestepping temp accommodation standards i think (not having yet read the report)

 

[Divvy]

Fuck Airbnb and their greed.

 

[Mass_Pincup]

Airbnb is driving up the rental prices in big cities, It'll soon be unattainable to regular people to live in there.

A real shame.

 

[Zoc]

I'm part of the problem, I guess. I just got an airbnb in Montreal. The only other option was a very ratty looking hotel for twice the price.

 

[SKINNER!]

I'm part of the problem, I guess. I just got an airbnb in Montreal. The only other option was a very ratty looking hotel for twice the price.

Yeah I feel you man. AirBnb has enabled people to stay in - sometimes more than - acceptable and livable accommodation without having to fork out Hilton/Ritz prices for it. If I had a chance to pay the exact same amount to stay in a clean well maintained AirBnb that's regulated by comments/feedback instead of a shitty motel or hostel that don't bother to use their money to clean, fix and upgrade their facilities without remorse then you bet your ass my money goes to AirBnb.

 

[ExplodingKetchup]

I stayed at an Airbnb apartment in Brooklyn that had every room booked through Airbnb (except for the owner's). It was a great place and way cheaper than a hotel.

I know Airbnb's like that cause problems, but there's clearly a market need that's not being addressed through hotels alone.

 

[ClosingADoor]

This stuff needs regulation. They are running illegal hotels, plain and simple. No licenses, no rules, no fire safety checks, etc, etc. If someone rents out their place like a hotel, it needs the same licenses as far as I'm concerned. Otherwise it will just be rich people buying property, driving regular families out of the area due to price increases.

 

[Lonely1]

If only I could find a motel or hostel for a fraction of the prize of my current 6 months Airbnb rental.

 

[SolidChamp]

I'm part of the problem, I guess. I just got an airbnb in Montreal. The only other option was a very ratty looking hotel for twice the price.

What location?

Just got back to Taipei from a trip in Canada and rented a loft AirBnB in Montreal just a few weeks ago.

The guy clearly had multiple properties all around the city and it wasn't a thing at all for him to drop the parking fee when I complained about the overall cleanliness of the place.

 

[Evo Shandor]

I feel like something will have to give with the hotel industry to respond to AirBnB. Many people make considerably less than what was once the average and travelling using hotels is incredibly expensive. If my wife and I used hotels for travelling through Belgium, the Netherlands, or Italy, our travel budget would have been three to four times larger, if not more; in short, we were only able to go to these places because we didn't use hotels.

 

[SoRuffShoNuff]

I love Air bnb when traveling abroad. We rent luxury condos and homes for a fraction of what a hotel would charge us for much lower accommodations.

 

[entremet]

You think it's bad now. Wait until Airbnb goes public. It's gonna be a bloodbath. I do hope the pressure it puts blue cities to relax their building residential zoning requirements, which are outdated at this point.

 

[Ether_Snake]

We need a revolution in house construction to bring costs down massively but no one is stepping up, seems to be foremost a regulatory problem.

 

[Pandy]

This stuff needs regulation. They are running illegal hotels, plain and simple. No licenses, no rules, no fire safety checks, etc, etc. If someone rents out their place like a hotel, it needs the same licenses as far as I'm concerned. Otherwise it will just be rich people buying property, driving regular families out of the area due to price increases.

Pretty much how I feel about it.

When 'couch surfing' was a thing I didn't see the associated issues, but now I realise it's a shitty dodge which has a lot of hidden downsides.

 

[entremet]

We need a revolution in house construction to bring costs down massively but no one is stepping up, seems to be foremost a regulatory problem.

The National Associate of Realtors wants to keep housing prices rising. Not to mention homeowners also don't want to their homes devalued due to new construction. There are perverse incentives at play.

Build more and relax zoning laws benefits everyone. However, neighborhoods and homeowners don't want this, hence NIMBYism.

People complain about capitalism, but it's not capitalism causing this. These elements are protectionists in nature. And ironically this is happening in the most liberal of cities.

My hope is that when AirBnB goes public, you will see disruption that the zoning laws and real estate market needs. It's still based on the 1950s.

 

[teruterubozu]

We need a revolution in house construction to bring costs down massively but no one is stepping up, seems to be foremost a regulatory problem.

House construction material costs have actually gone down thanks to McHouses type construction. It's really the real estate mantra of "location, location, location" that's driving up costs.

 

[Renna Hazel]

I rent out homes that I own as well. How is this any different because they use Airbnb to do it?

 

[excelsiorlef]

I rent out homes that I own as well. How is this any different because they use Airbnb to do it?

Renting out gives a resident a place to live.


This turns potential residences into hotels.

It's bad for locals

 

[ClosingADoor]

I rent out homes that I own as well. How is this any different because they use Airbnb to do it?

Because they are taking away housing from the people who actually live and work in the city. AirBnB will also give the home owner a higher return, and they can then pay more for the house, which can drive house pricing up for the area.

Putting houses on AirBnB exclusively takes them off the regular renters market, which is already overcrowded in these cities.

And that is not getting into how annoying it is for the neighborhood to have strangers going in and out all day, leaving a mess, not caring about making noise, staying up late drunk, etc, etc.

 

[Renna Hazel]

Renting out gives a resident a place to live.


This turns potential residences into hotels.

It's bad for locals

Is Airbnb completely unregulated in these cities? It's against the law to use Airbnb as hotels in NYC.

 

[TyrantII]

I stayed at an Airbnb apartment in Brooklyn that had every room booked through Airbnb (except for the owner's). It was a great place and way cheaper than a hotel.

I know Airbnb's like that cause problems, but there's clearly a market need that's not being addressed through hotels alone.

The market need is people like cheap shit. The reality is hotels have to put up with safety and other regulatory issues that drive up prices. Mostly.

That said, the above isn't an issue in most cities where you see hotel pricing far about normal prices due to demand. Boston for example it's not uncommon to see $300-400 night prices for 3 star hotels within 10 miles of the convention center. The premium does support building more hotel rooms though, which are very expensive to build in the city in prime realestate.

Anyways, not really worried about them. More worried about other residents and renters and how this changes residential neighborhoods into transient hellholes filled with people with no stakes in the community.

I rent out homes that I own as well. How is this any different because they use Airbnb to do it?

Short term rentals are commercial use and come with a host of issues long term residential rentals do not.

The National Associate of Realtors wants to keep housing prices rising. Not to mention homeowners also don't want to their homes devalued due to new construction. There are perverse incentives at play.

Um, everyone does. Decreasing assets like housing means trouble in the economy and will see deceasing jobs and wages. You never want to see falling rents and falling housing prices, ever. Whatever short term benefit you'll get is railroaded when you lose your job, or your hours are cut, or people flee your economic zone.

Slowing the rise in real estate and increasing the rise in wages are what's needed. You need to grow out of a housing problem by increasing housing supply and creating an economy where wages outstrip the smaller rises in housing.

There's really no other way out.

 

[Quazar]

This stuff needs regulation. They are running illegal hotels, plain and simple. No licenses, no rules, no fire safety checks, etc, etc. If someone rents out their place like a hotel, it needs the same licenses as far as I'm concerned. Otherwise it will just be rich people buying property, driving regular families out of the area due to price increases.

As opposed to rich Hotel owners? Blah

 

[Machine]

My condominium association was so concerned about people buying condos solely to rent them out on Airbnb that they recently amended their bylaws to cap the number of units available for rent and banning short-term rentals. You're probably going to see a lot more of this.

 

[Saganator]

The draft report also said that while a lot of money is being made using Airbnb, the big profits are going to commercial hosts who don’t live on the properties.

While Airbnb hosts in the three cities earned $430 million last year, 10 per cent of hosts earned a majority of that revenue, the report said. The top 1 per cent of hosts earned $51.7 million — more than 12 per cent of the total, the report said.

That's a lot of money being left on the table. Surprised hotel operators haven't bought some properties to rent out themselves to get a piece of that pie.

 

[Somnid]

If it's profitable to convert long-term housing into cheap sort-term rentals without a huge surge in tourism it means rooms are sitting idle. Basically, cities need to start adopting empty room taxes.

 

[Zoe]

Is Airbnb completely unregulated in these cities? It's against the law to use Airbnb as hotels in NYC.

Regulation is only effective if there's enforcement. I've been reporting an unpermitted Airbnb in my neighborhood to the city, and they've already reposted their listing with different pictures.

 

[maruchan]

As opposed to rich Hotel owners? Blah

At least A large majority of these hotels are maintained by union staff. These airbnb contract people to clean and maintain these places at very low wages.wages...

 

[excelsiorlef]

Anyways, not really worried about them. More worried about other residents and renters and how this changes residential neighborhoods into transient hellholes filled with people with no stakes in the community.

Yeah that's the biggest thing.

Zoning laws are a thing for a reason

 

[Pastry]

Girlfriend and I are going to Europe later this month and using Airbnb the whole time. It's obvious that one of the places we are staying at is a part of a large network of them. The same host has like 20 properties listed but they are all reviewed well so that's all I really care about.

 

[excelsiorlef]

At least A large majority of these hotels are maintained by union staff. These airbnb contract people to clean and maintain these places at very low wages.wages...

And at least they also provide jobs.

 

[The Albatross]

AirBnb is a symptom of the problem, not the source of the problem, that is to say, AIrbnb exists because there is a problem in the rental and hospitality markets. It shouldn't make sense that a property owner should be able to make more money short-terrm-renting a property on AirBnb year round, more than long-term renting a property year-to-year. Yet, because of the inflated price of hotels -- driven by something -- AirBnb's can undercut hotel pricing by more than half, with better units, in more desirable areas. Clearly, something is wrong with this picture.

I visited DC for a week back in April. Hotels that week were running $300 - $400/night for double-occupancy rooms out in places like Alexandria and 25-minute trains from the city. There were at Courtyards, Hampton Inns, and other typical mid-budget hotels, with few amenities and basic rooms. Our AirBnb minutes from Dupont Cir was $240/night for a 2 bedroom, 2 bathroom, full kitchen, dining room, living room, and the owner lived in the unit above us... It was an old brownstone right beside Embassy Row, with bars and restaurants within a stones throw. Now, while the owner of the unit lived above us, he was using a rental property management company to handle all of the work and you could tell... We communicated with two people who were not the owner, but the owner came down when we got there and gave us a bottle of wine and welcomed us, but he was definitely not the person we'd been communicating with.

A hotel would have been more than twice as much. We would have been stuck 20+ minutes from where we wanted to be, in suburban office parks without any restaurants or bars within walking distance at night, and we would have spent 2 or 3x as much as a group of 4 because we would have needed two rooms, no kitchen, no dining area, nothing else.

An AIrBnb shouldn't be able to undercut a hotel by all of the laws of economics that dictate cost:expense at running businesses at scale, but it does easily. An AIrBnb shouldn't be able to provide more revenue to an owner year round than renting to a permanent renter, but it does.

AirBnbs likely need some regulation, or, more appropriately, cities need to develop regulation that allows neighborhoods to prevent themselves from becoming just cottage industries for AirBnbs. But, something doesn't make sense here and what doesn't make sense is the inflated cost of hotels versus the deflated value that hotels offer consumers. Hotels, especially in desirable tourist cities, are increasingly not making sense: Many people don't want to stay at hotels, they're in inconvenient locations, they lack amenities that people want, and they're 2x or 3x the cost of places that provide those things. The question shouldn't be "How can we pass laws to make AirBnbs more expensive," it should be "what laws are making hotels more expensive?" Because if you pass a law that is going to make AirBnb's more expensive, then that hasn't fixed the economic problem, it's just shifting the forces that make hotels more expensive onto Airbnbs, which then opens an opportunity for something else to come in and undercut Airbnb and hotels, and then we still have the same economic problem.

Also, it's not a coincidence that the markets being disrupted by technology solutions like AirBnb, Uber, and other applications were all controlled by organized crime 40 and 50 years ago.

 

[rackham]

I hope Airbnb is banned for good or they just receive so much regulation that it's not worth it for most people.


I hate the fact that they take properties off of real rental listings.

 

[TyrantII]

If it's profitable to convert long-term housing into cheap sort-term rentals without a huge surge in tourism it means rooms are sitting idle. Basically, cities need to start adopting empty room taxes.

Not necessarily. It just means the hotel pricing is far above long term rental pricing, which is true about everywhere.

Some cities have great tax incentives for owner/resident living in unit to cap the landlord as business model. They should amend it to double whammy these short term rentals.

It be pretty easy to do since the income is claimed.

AirBnb is a symptom of the problem, not the source of the problem, that is to say, AIrbnb exists because there is a problem in the rental and hospitality markets. It shouldn't make sense that a property owner should be able to make more money short-terrm-renting a property on AirBnb year round, more than long-term renting a property year-to-year.

Gonna have to see those receipts, because as far as I can tell you're arguing the opposite of reality.

As term of a contract increases marginal price goes down because the contract and risk is spread out over a longer period. The shorter the term the higher the price. Likewise you see this with real estate prices per square foot. Smaller the unit, the higher the price. Larger the unit, the less per square foot.*

*With some caviots on types of properties. Super luxury tend to be in their own class not following market averages.

 

[andthebeatgoeson]

I stayed at an Airbnb apartment in Brooklyn that had every room booked through Airbnb (except for the owner's). It was a great place and way cheaper than a hotel.

I know Airbnb's like that cause problems, but there's clearly a market need that's not being addressed through hotels alone.

It's hard to blame consumers, which is driving the market. You can find great locations and prices on Airbnb. It's hard to blame to proper providing the places. Just responding to the market.

I even considered if Airbnb could limit stock. But the market will correct, even if you limit rentals to 20 weeks out the year.

Airbnb is providing a service, hotels and motels provided a ripe environment for disruption, the owners are taking advantage, not just a large corporation. There is more shared blame.

Even cities could do more but have failed to address the issues that make gentrification and inequality exacerbated by airbnb. Like, anything nyc does to airbnb is now just a bandaid.

 

[entremet]

The market need is people like cheap shit. The reality is hotels have to put up with safety and other regulatory issues that drive up prices. Mostly.

That said, the above isn't an issue in most cities where you see hotel pricing far about normal prices due to demand. Boston for example it's not uncommon to see $300-400 night prices for 3 star hotels within 10 miles of the convention center. The premium does support building more hotel rooms though, which are very expensive to build in the city in prime realestate.

Anyways, not really worried about them. More worried about other residents and renters and how this changes residential neighborhoods into transient hellholes filled with people with no stakes in the community.



Short term rentals are commercial use and come with a host of issues long term residential rentals do not.



Um, everyone does. Decreasing assets like housing means trouble in the economy and will see deceasing jobs and wages. You never want to see falling rents and falling housing prices, ever. Whatever short term benefit you'll get is railroaded when you lose your job, or your hours are cut, or people flee your economic zone.

Slowing the rise in real estate and increasing the rise in wages are what's needed. You need to grow out of a housing problem by increasing housing supply and creating an economy where wages outstrip the smaller rises in housing.

There's really no other way out.

I'm not talking about crashing home prices. Just won't happen. We're not building that fast. However, additional stock would slow down appreciation rates and many do have big beefs with that, especially since Americans have been trained to put a good amount of their portfolio in homes.

 

[Lubricus]

Kind of off-topic:

If you could build one of these you might make some cash.

Top 10 Wish Listed Property Types on Airbnb*



Treehouse

Igloo

Van

Lighthouse

Cave

Island

Yurt

Train

Loft

Cabin

This treehouse in Atlanta is the number one on wishlists-$375/night with a two night minimum.

http://www.ajc.com/news/local/atlanta-has-airbnb-most-desired-rental-property-the-world/cfnWOxzLGlxwxiHeTEWmVI/

 

[Armaros]

It's hard to blame consumers, which is driving the market. You can find great locations and prices on Airbnb. It's hard to blame to proper providing the places. Just responding to the market.

I even considered if Airbnb could limit stock. But the market will correct, even if you limit rentals to 20 weeks out the year.

Airbnb is providing a service, hotels and motels provided a ripe environment for disruption, the owners are taking advantage, not just a large corporation. There is more shared blame.

Even cities could do more but have failed to address the issues that make gentrification and inequality exacerbated by airbnb. Like, anything nyc does to airbnb is now just a bandaid.

Besides the fact that all the 'disruption' is based on ignoring laws and regulation.

Also avoiding paying many of the taxes that proper hotels have to pay. And insurance is not going to pay for damages done to an Airbnb 'hotel' covered with landlord or renters insurance.

 

[NYCmetsfan]

I feel like something will have to give with the hotel industry to respond to AirBnB. Many people make considerably less than what was once the average and travelling using hotels is incredibly expensive. If my wife and I used hotels for travelling through Belgium, the Netherlands, or Italy, our travel budget would have been three to four times larger, if not more; in short, we were only able to go to these places because we didn't use hotels.

you're not entitled to be able to afford staying every place.

this whole idea that people's ability to afford travel is on the same level of people ability to have a home is selfish

like it's disgusting to see people look at the problem and go ¯_(&#12484_/¯ need to have a cheap place in some expensive city

 

[The Technomancer]

This stuff needs regulation. They are running illegal hotels, plain and simple. No licenses, no rules, no fire safety checks, etc, etc. If someone rents out their place like a hotel, it needs the same licenses as far as I'm concerned. Otherwise it will just be rich people buying property, driving regular families out of the area due to price increases.

Yup

 

[The Albatross]

Gonna have to see those receipts, because as far as I can tell you're arguing the opposite of reality.

As term of a contract increases marginal price goes down because the contract and risk is spread out over a longer period. The shorter the term the higher the price. Likewise you see this with real estate prices per square foot. Smaller the unit, the higher the price. Larger the unit, the less per square foot.*

*With some caviots on types of properties. Super luxury tend to be in their own class not following market averages.

Only if you eliminate risk and expenses. The risk of having unrented units for short term is greater than the incentive of higher profit on short term, which is why rents have (in most cases) never been dominated by short term (e.g., 1 week or 1 month) rental, and are usually longer term than that (6months, 12 months etc).

If there was no incentive to long-term (6months, 1 years, 2 years, etc) rental for the property owner, then there wouldn't be any long term rental. The incentive is that there is less risk, more predictability, less expenses.

 

[Somnid]

Not necessarily. It just means the hotel pricing is far above long term rental pricing, which is true about everywhere.

Some cities have great tax incentives for owner/resident living in unit to cap the landlord as business model. They should amend it to double whammy these short term rentals.

The problem is with room stock and the prices being artificially inflated. If a room can be empty 60% of the year and still turn a profit, that's bad because the market is inflated. There is no reason to bother with long-term rentals. Most of these markets where people get huffy with AirBnb tend to have price inflated markets in general. Low buying stock and extremely high cost rentals. AirBnb both helps and exacerbates the problem because on the one hand people might be able to keep their house with extra money and on the other hand people are getting rooms and renting them out at prices high enough that vacancy isn't an issue. Cities need to deter this behavior by penalizing land holding. If you don't live at a place and that place is not being used to capacity, you should face taxes to deter you from holding on to it.

The same is true for long-term rentals as well, it just takes a larger scale. Why build buying stock when you can rent perpetually at a nearly morgage payment levels for a 1 BDR? And you get leasing guarantees on top of it. Ultimately, housing is a need, not a want and so you cannot trust it to the free market. We need to start clamping down on the for-profit aspect of it.

 

[CherryWoodFuton]

you're not entitled to be able to afford staying every place.

this whole idea that people's ability to afford travel is on the same level of people ability to have a home is selfish

like it's disgusting to see people look at the problem and go ¯_(&#12484_/¯ need to have a cheap place in some expensive city

Huh

So you're saying tough shit to the poster and his wife and get hotels to support the boycott of Airbnb?

I mean it's not his fault that hotel prices suck ass so why should he bite the bullet and think of the poor people who are getting fucked by their respective governments?

 

[LinkAndEpona]

If only I could find a motel or hostel for a fraction of the prize of my current 6 months Airbnb rental.

My cousin is in the same situation.

AirBnB is awesome, the hotel and other rental industries need to adapt.

 

[Hank Scorpio]

Fuck Airbnb and their greed.

Yup. Whole thing is a sham. See recent protests in Barcelona by the locals.

 

[gutter_trash]

AirBnB is reaking havok on condo associations where AirBnB unit owners shelfishly don't care about the rules and increase the costs of repair caused from damages down by AirBnB customers .

the building where my brother owns a unit have banned AirBnB due to the damage in communal areas of the building sustained.

I live in a smaller condo building where we (owners) are more closely tight nit; I will bring it up in our next condo meeting and request a vote for a total ban AirBnB to protect ourselves from what happens at bigger buildings.

 

[sangreal]

My cousin is in the same situation.

AirBnB is awesome, the hotel and other rental industries need to adapt.

The article is about how they have adapted -- commercial operators investing in buying apartments and skirting regulations

It's easy to see why airbnb is so popular -- you get a nicer place in a better location for less money. It's also easy to see the enormous problems around it