Airbnb Update: What It's Doing To Our Rental Market
restrictions delayed and rental market tightens
As housing prices continue to soar in major cities across the world, Airbnb’s profits are following suit. This is not a coincidence. In fact, research into the rise of digital short-term rental platforms suggests their implications for cities like Toronto are far larger than the local politics of neighbourhood disturbances and disruption of condos might suggest.
Whether you are a middle-class homeowner seeking a flexible means of paying your expensive mortgage, or a renter struggling with more and more of income going to your landlord, the ‘Airbnb problem’ boils down to a common condition: decades of housing policy have turned our homes into investments rather than places to live.
In fact, this narrative is explicitly acknowledged in Airbnb’s public policy communiques. According to the company’s story, while contemporary capitalism is forcing more of the middle class into circumstances of housing insecurity, Airbnb is “democratizing” capitalism by simultaneously making tourist accommodations more affordable and putting that revenue into the pockets of middle class locals. While this claim is justified by the platform through slick infographics which signal at transparency, in reality the company answers few questions of value to those concerned with the platform’s interactions with the housing market.
For researchers asking these questions, a key task has been distinguishing between listings that might constitute “homesharing” from those that could be considered full-time hotels.
On the one hand, it is true that short-term rental platforms might provide a means for owners and renters to confront their economic uncertainty through the part-time practice of “homesharing.”
On the other, it is clear that the platform is also used as a tool for speculative investors and entrepreneurs to access a global pool of rental demand, opening up their space internationally to the highest bidder. In fact, this happens to be the dominant use of the platform. In Toronto, almost 60% of the profits made by Airbnb from June 2016 to May 2017 went to this class of commercial hosts, who on average kept their unit off the market for approximately 250 days of the year. And where Toronto’s shrinking rental vacancy rate now hovers around 1%, these listings accounted for 0.85% of all rental listings across the city.