Airbnb Crackdowns are a Political Answer to an Economic Problem

As the City of Whitehorse is asking residents to participate in a survey on short-term rentals, Neighbourly North, would like to explain its perspective on the industry’s impact in Whitehorse.

Let’s start with the proponents of regulating short-term rentals in the City of Whitehorse and work our way back. In the past year, we have heard calls to introduce regulations at the City of Whitehorse, aimed at converting some Airbnbs into long-term rentals.

One such popular argument is that only primary homes should be permitted for short-term rentals.

This means you can Airbnb your bedroom or personal house when you go to Haines for the weekend, but your cannot Airbnb the investment property you just bought in KFC Towers. The touted expected result of such regulations would be greater availability and affordability of traditional long-term housing in Whitehorse.

However, this argument depends on flawed assumptions. The most important one to peel back is this: One less short-term rental equals one more long-term rental or owned home. This assumption depends on the entire universe of housing consisting of three uses:

– Owner occupied;

– Long-term rentals; and

– Short-term rentals

And if you stop someone from doing short-term rentals in their property, it will become one of the others. But what the proponents have failed to address, is that a dwelling can be something other than those three uses. So, if it’s not rented short, and it’s not rented long, and it’s not an owned home, then what is it?

It’s empty.

Since 2016, Statistics Canada has reported data on dwellings that are not long-term rentals or owner-occupied primary homes. They call these units “Dwellings Not Occupied by Usual Residents.”

This metric captures housing units that are either:

a) Unoccupied; or

b) Occupied but by people who have their primary residence elsewhere, including short-term rentals

In the entire Yukon Territory, in 2021, the number of Dwellings Not Occupied by Usual Residents was 2,429 units. In 2016, that number was 2,670. In the City of Whitehorse Census Metropolitan Area, in 2021 that figure was 935, and in 2016 it was 815.

Readers can review Census Canada’s data on Dwellings Not Occupied by Usual Residents using this tool from www.censusmapper.ca.

If there were 935 properties in 2021 that are not long-term rentals or owner-occupied homes, but fewer than 100 entire-home Airbnbs according to AirDNA, that must mean there are a lot of potential homes in Whitehorse that are unoccupied.

But how could there possibly be more than 800 empty dwellings in Whitehorse during a housing crisis?

The logical answer is this: Despite today’s eye-popping long-term rental rates, and the flexibility offered by Airbnb, there are a lot of homeowners who don’t want to provide housing:

– Some want to provide long-term rentals;

– Some want to provide short-term rentals; and

– Some don’t want to provide rentals at all

Get this; in 2021, Statistics Canada reported more than 10,000 empty spare bedrooms in the City of Whitehorse CMA. That’s the equivalent of more than 4,000 dwellings sitting idle or $120 million in annual rents that homeowners have chosen to leave on the table at rates of $1,000/month.

So what does this mean? It means one less short-term rental does not equal one more long-term rental.

And in my opinion, if the government forces a housing provider to stop supplying short-term rentals, it will almost certainly become one more property sitting empty in the vast majority of cases.

So if I’m right about this, then why have we been inundated with anti-Airbnb stories and rhetoric from left-wing politicians, housing activists, and journalists?

It is because, frankly, it is a highly effective political message to renters. That shouldn’t surprise anybody, it is the job of politicians to get political about housing. And a lot of renters want to hear that there are bad guys out there for our elected leaders to go after, whether it’s landlords, speculators, flippers, or Airbnb hosts, responsible for driving up rents making life less affordable for everyone else, opposed to poor planning and rapid population growth.

We saw the height of this late last year when the governing BC NDP introduced Bill 35, the Short-Term Accommodation Act, which superseded many municipalities on setting regulations for short-term rental activity.

In a crackdown described by industry experts as among the most comprehensive in North America, the current regulations, which came into effect May 1, 2024, banned most short-term rentals that are not the owner’s primary home, or a basement suite or garden suite on the same site as their primary.

Initially, remote and rural municipalities in Northern BC were able to successfully opt out:

– Fort Saint John; and

– Dawson Creek

Although, some tried to opt-out but were prevented by the BC NDP.

– Prince George; and

– Penticton

Since May 1, the legislation has become increasingly controversial and we are now hearing increasing calls from government and industry leaders to repeal Bill 35, with the leaders of the other two major political parties in BC committing to do so if elected in October 2024:

– John Rustad, Conservative Party of BC; and

– Kevin Falcon, BC United (formerly BC Liberals)

This is all to say two things:

1. Whitehorse’s elected leaders and top bureaucrats should learn from the Province of BC’s mistakes and pay close attention to what is transpiring there this summer; and

2. Whitehorse residents should very carefully consider, and fact check, the narratives they hear about housing and the cost of living

Housing has become increasingly politicized; and with that comes larger platforms for people without strong academic and professional credentials, to offer political answers to economic problems like our housing shortage.

In consideration of potential short-term rental regulations in Whitehorse, I believe there is potential for intelligent and elegant regulations to help guide and uplift this industry that supports so many.

As for heavy-handed government intervention aimed at forcing homeowners into providing long-term rental housing; it’s not just bad policy, it’s dangerous for communities like ours. The last time I checked, the City of Whitehorse wanted to reduce the number of underused lots, not create more of them.

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Ben Pereira is a lifelong Yukoner, and the owner of Neighbourly North, a local property management business that offers Airbnb management services.

He had a brief career in institutional equity research and investment banking before travelling the world and returning home to start his company.