Soccer fans in Vancouver on June 18. The city didn't loosen its short-term rental rules ahead of the tournament as Airbnb had hoped, but the company found success in Los Angeles, to the dismay of housing advocates.ETHAN CAIRNS/The Canadian Press
Thorben Wieditz is executive director of Fairbnb Canada Network.
Last year, in anticipation of the World Cup, Airbnb launched a campaign to roll back and soften short-term rental regulations, using the hype around the tournament as a political moment to exploit.
In Canada, the company released a commissioned Deloitte report forecasting that Vancouver would fall approximately 70,000 nights short (referring to the number of nights spent by all guests) during a nine-day peak period of the event, which would leave thousands of fans in the lurch and the city missing out on tourist spending.
Airbnb unsuccessfully attempted to use the excitement around the World Cup to push the B.C. government and the City of Vancouver to loosen their short-term rental rules by waiving existing host fees and the principal residence requirement (this ensures owners can only operate a short-term rental on the property where they ordinarily live) to add more inventory to its platform in time for kickoff.
Now that Canadian host cities find themselves mid-tournament, we have an opportunity to assess Airbnb’s public lobbying campaign, and what we see today paints a very different picture from the initial report. Demand for tourist accommodations in Vancouver and Toronto has fallen far short of predictions, and hotels in both cities remained less than 50-per-cent full after seven match days.
Both cities also track behind an ordinary June, with Vancouver hotel bookings down about 25 per cent and Toronto down 21 per cent.
The short-term rental market hasn’t fared much better. Toronto’s demand for Airbnb-type accommodations ranks third-last among the 16 host cities in Canada, the U.S. and Mexico and barely surpasses last year’s bookings. Vancouver’s short-term rental occupancy rates are expected to be 10 per cent lower than the same period last year.
It’s worth noting that B.C. Premier David Eby publicly said no thanks to Airbnb’s lobbying push in Canada, and the City of Vancouver confirmed that it wouldn’t loosen its short-term rental rules for the games. It’s important to give credit, as not all host cities immediately saw through Airbnb’s sales pitch.
Airbnb has spent millions across the three host countries to relax short-term rental rules. It spent close to US $19-million on lobbying and political contributions at the state level in California, as well as $360,000 on lobbying Los Angeles City Hall.
Much to the dismay of housing advocates, Airbnb managed to use the World Cup and the 2028 Olympics as an opportunity to convince Los Angeles Mayor Karen Bass to explore an ordinance that allows secondary homes to be used as short-term rental inventory until after the 2028 Olympics, against the recommendations of the city’s planners.
B.C.’s refusal looks pretty wise today, not only because Airbnb’s projected shortfall of 70,000 room-nights was wildly inaccurate, but also because we now have peer-reviewed empirical research that illustrates a causal relationship between short-term rental rules and the rent tenants pay in Canada.
On June 10, the journal Regional Science published a study funded by the Social Science and Humanities Research Council conducted by McGill University’s Dr. David Wachsmuth and the University of Waterloo’s Cloé St-Hilaire. They posted its data and code publicly so that their model and results can be independently verified. Using the staggered rollout of the principal residence restrictions Airbnb would love to eliminate across Canadian cities, the researchers illustrate beyond doubt that when such restrictions curb Airbnb activity, rents fall in the years that follow.
They found that with an increase to the number of short-term rentals, the average rent in the surrounding neighbourhood rises, as the supply of available housing declines and landlords raise prices, knowing they can fall back on short-term rentals.
The research shows that in the year after municipalities adopted the principal residence requirement, rents dropped by an average of $24 a month; by 2023, rents had dropped by an average of $55 a month, a 3.3-per-cent-reduction that continues to grow as municipal enforcement catches up. In total, Canadian tenants had saved roughly $192-million in rent every month by 2023, according to the study, or a total of $2.3-billion a year.
As far as housing policy goes, implementing short-term rental rules presents an easy and efficient way for politicians to make good on their promises to reduce housing costs.
It’s easy to recognize why Airbnb would jump on the opportunity to use mega events such as the World Cup or Olympic Games as an opportunity to soften rules, even if only temporarily. While not successful in Canada, the relentless campaigning by this multibillion-dollar company presents a slippery slope, as evidenced by Los Angeles succumbing to Airbnb’s pressure.
As history has caught up to Airbnb’s predictions about a lack of available rooms, it’s easy to recognize that its predictions were nothing but an opportunistic attempt to pad its bottom line.
The next time the company tries that, governments shouldn’t believe its pitch.