San Francisco received notoriety this Fall and Winter for passing a measure in favour of allowing Airbnb style short-term rentals in the City. Having lived and worked in tourism based communities my whole life I’m well versed in the benefits, concerns, and controversy over short-term residential rentals (overnight rentals under 28 days). Whistler, the community in which I live, addressed the topic in the late nineties, and the Centre recently assisted the newly formed Mountain Resort Municipality of Sun Peaks with a community supported approach to addressing short term rentals. While popular tourism communities are at the forefront of the controversy, it wasn’t until the advent of Airbnb that the issue really hit the mainstream in cities worldwide.
… though larger cities are somewhat late to the policy game, the increased interest in short term rentals is advancing far more creative policy approaches that aim to benefit homeowners and communities alike.
So what is a short-term rental (STR)?
Typically a STR refers to a home or a room that is rented to a person or group for a period of fewer than 28 nights or so. These rentals differ from a typical month-to-month or annual rental. They also differ from your typical commercial accommodation like a hotel, hostel, B&B, pension or the like in that the units are, for the most part, zoned for residential, not commercial use. Airbnb is not the only hook up service for homeowners and visitors; VRBO, Homeaway, Craigslist, and numerous property management companies play match maker as well. However, with the rise of the sharing economy and the hipster appeal of Airbnb, the number of properties offered on these service websites is expanding year after year.
While Airbnb may rather see complete market freedom to reign, experience has shown that an totally unfettered market often results in the loss of the common good for a community. This is why municipalities typically have the ability to regulate land use, form and character of neighbourhoods and other types of regulation. Getting policy right requires knowing what’s up.
What are some challenges and benefits related to STRs?
|Commonly identified Challenges||Commonly identified Benefits|
|Neighbourhood noise and security, as vacationers often treat every day/night like a weekend or Friday night||Contribute to local wealth by allowing local residents, not just multinational/non-local commercial property owners, to earn money from visitors|
|Unfair competition when STRs are not subject to the same taxes or health/safety codes as hotels, pensions, etc.||More accommodation options and prices for visitors, improving their experience and in many cases providing more authentic experiences and cultural exchanges|
|Reduced ‘tax’ revenue to pay for tourist services when hosts evade tourism taxes or other||Increased development and job creation as additional income streams may allow homeowners or investors to build more elaborate homes|
|Increased cost of housing for some local residents due to inflated real estate||May prevent economic hardship by allowing some residents to use the STR money to help meet basic living needs|
|Loss of community feel (or challenge at building it)||Positive intermingling and cultural exchanges of visitors and residents|
|Parking overflow, traffic and snow clearing challenges||Offsets the costs of the local property for some part-time residents renting out their property|
|Safety and fire hazards due to overcrowding||More efficient use of land base as a currently underutilized built development may be used instead of new land to generate wealth|
|Erosion of core commercial area and commercial tax base when visitors stay ‘out’ in the residential neighbourhoods|
Airbnb = authentic tourism and local wealth?
While most of the conversations in the communities we’ve worked with highlight the part-time homeowner investment/development benefits of allowing STRs, a new story of ‘local wealth creation’ is emerging when looking at communities with such supporting policies. The wealth creation opportunity is not inconsequential. For example, if supportive policies for nightly rentals attracted 15% incremental accommodation business for Whistler and it was distributed amongst 3,000 local households it would result in a $10,000 annual payout for each homeowner for a total $30 million in additional spending power! That money would go a long way to paying mortgages, kid’s higher learning and in some cases putting food on the table. This wealth generation tool, coupled with tourism’s newest trend of authenticity, seems well poised to deliver benefits to residents and visitors alike.
But… (isn’t there always?)
there are the challenges, and in good planning we know that we need to find nuanced policy that enhances desired benefits while at the same time protecting against challenges to the common good. Approaching Airbnb is no different. Getting the policy right means understanding the scope of the activity, knowing what your community wants and needs, understanding leading practices and using that to guide policy. Whistler’s current approach only permits STRs in new residential developments in order to maintain a vibrant village/neighbourhoods; Sun Peaks is allowing the opportunity for STRs throughout the community so visitors have more choice, and Tofino restricted STRs to larger size lots with a resident present onsite. As for cities, San Francisco is limiting STRs to principal residences to ensure local wealth, limiting the number of rental nights throughout the year and even reached an agreement for Airbnb/subscribers to pay the appropriate taxes for nightly rentals. All of these communities have additional operational regulations that might include inspections, parking requirements, neighbour notifications, security bonds etc.
The sharing economy, as well as the desire for local wealth creation and authentic tourism experiences, isn’t going away anytime soon, so communities, even those who have addressed the issue years ago, can do best by addressing the new reality of STRs head on with effective policy that supports community goals.
If you would like to learn more about how to approach the ‘Airbnb syndrome’ in your community, contact Dan Wilson 604-966-4457 or by email firstname.lastname@example.org.