The price of real estate in Vancouver has been rising for years, and if you’re not the gambler type, renting has never been a more financially sensible option. However, according to a report by Canada Mortgage and Housing Corporation in October 2015 (PDF), the vacancy rate in City of Vancouver is at 0.6% with some neighbourhoods at as low as 0.3% (English Bay).
If you are a renter like myself, and you’ve decided to stay put for a while, it doesn’t affect you in the short term (British Columbia has a rent increase cap at less than 3% per year). But tough luck if you want to move for any reason! I’ve heared anecdotes of reasonable Craigslist listings being snatched up in the matter of hours, and what’s left is flawed units or extortionately expensive ones.
Another rumour is about people who buy properties in popular locations, and instead of putting in on the rental market, they effectively run a hotel business on Airbnb without all the pesky licenses and regulations. As much as I love using Airbnb for private rooms in cities I visit abroad, the NIMBY in me is not very happy about this trend. That’s why I decided to crunch the numbers and have a better idea of just how bad the Airbnb effect is here.
Luckily, there’s a website that continuously scrapes Airbnb listings and publishes the data. I grabbed the Vancouver data from December 2015. It contains all the listings that were available in 2015. For the purpose of this analysis, I only looked at private homes (no shared or rooms), and only those with at least 90 days of availability to filter out occasional travellers that rent out their principal residence.
The Inside Airbnb data comes with the neighbourhood of each unit, but it doesn’t exactly match the official neighbourhoods posted on the City website (e.g. Gastown is in Strathcona in one and in Downtown Eastside in the other). While the city has over 20 neighbourhoods officially, the CMHC rental report is broken down into 10 zones only. For the sake of visualization, I had to roughly map neighbourhoods to zones, but it shouldn’t affect the results much.
The following map shows Vancouver neighbourhoods with information about their rental situation (click on each to see). I calculated the estimated number of vacant units by multiplying the total number of rental units in each zone by the reported vacancy rate. The map is colour-coded by how high the number of Airbnb listings are relative to the number of vacant units (darker red for a higher ratio of Airbnb listings over vacant rentals).
It seems that central areas and those closer to transit have it worse. Downtown has more than 10.2 times Airbnb listings than it has vacant units for long-term rental, but it’s as much as 15.8 times in Mount Pleasant and Renfrew Heights. It’s not easy to draw a conclusion about how releasing all those Airbnb listings into the rental market would do. Maybe more people would move to Vancouver and the rents wouldn’t budge much. Maybe more people would move in and rents would go lower too, but at the cost of lowering the overall income tax. I leave that analysis to people with more expertise, but it’s obvious that better regulations for those underground hotel businesses would make life slightly easier for locals who can’t or don’t want to buy into the real estate insanity.