In New York, a program is being launched, costing $10 million over three years. The intention is to curb Airbnb’s rental market penetration and that of other accommodation providers deemed illegal under the City’s by-laws. No longer will any rentals under one month be permitted, with some exceptions for single-family and two-family dwellings. What will NYC’s City government spend the money on? More staff, a public awareness campaign and data monitoring which seeks to weed out transactions by Airbnb hosts that aren’t meeting City regulations.
Our little secret has been out for quite a while. Vancouver is one of the most appealing, tourist-friendly cities in the world. Every year, more people come to discover the natural beauty of our gem on the Pacific, admire her majestic mountain backdrop and dive into her vast multicultural patchwork.
Of course, all these people need places to stay and while Vancouver boasts some of the finest accommodations to be found anywhere, with the kind of volume we’re experiencing, supplemental options like Airbnb are sought after.
But not everybody’s happy about the sharing economy this online accommodation hub is part of, even though it is a great income boost for homeowners and has created an entire niche for vacation rental management companies. Across North America, more and more cities and municipalities are taking measures to rein in the Airbnb success at penetrating the short-term rental market. This trend includes the Vancouver Airbnb business scene, where housing advocates are worried about the impact the company is having on long-term rental stock.
Vancouver’s rental market is notoriously tight. With vacancy rates now standing at a meagre 0.5%, some feel Airbnb is tightening things even further, making it even tougher for Vancouverites to find housing. What’s interesting is that this situation has persisted here for quite some time, but the City of Vancouver has now launched a working group to examine the impact of the sharing economy on the rental market, specifically targeting Airbnb short term rentals.
But it’s not all doom and gloom for Airbnb income. At the beginning of November, the City of San Francisco held a referendum at the prompting of housing advocacy groups. Proposition F, which would have limited the number of days per year hosts could rent their properties to 75, was rejected by 55% of the 133,000 San Franciscans who voted. Airbnb management recruited 2,000 volunteers to fight the proposition and knocked on 255,000 city doors, spending about $8 million in the effort.
The extraordinary counter-attack of Airbnb and the company’s resulting victory has prompted it to take the bull by the horns and start fighting back on a national scale. They’re creating advocacy clubs all across the United States, establishing them in 100 cities, coast to coast. To launch this expanded counter-attack, Airbnb will be spending $8.4 million and enlist its many fans in the effort to head off regulatory crackdowns like the one they managed to defeat in San Francisco. The project will also be expanded internationally.
While it remains to be seen what will happen Vancouver Airbnb hosts, or how New York’s new regulatory regime will play out, all these rumblings are sending seismic shocks through the budding sharing economy. While cities everywhere are taking a look at how online resources are impacting the rental stock, San Francisco’s referendum has sent the message that Airbnb has not only the right to exist in the market but that the company intends to defend its position against government intervention.
Vancouver could go either way – New York or San Francisco. But it’s interesting to note that all three cities have something in common – notoriously challenging rental markets. All three are known to be expensive and difficult to navigate for people on a budget. This has been a longstanding problem, in all three cities. It begs the question: is Airbnb a convenient scapegoat for cities that have neglected affordable housing stock? I think it’s a fair question and I’d be interested in hearing how others would answer it.
I’ll be watching the scenarios in both Vancouver and New York play out, as well as in other cities (like Chicago, which has only a few hundred more Airbnb rentals than Vancouver) to see how the company fares. What’s clear is that Airbnb is mobilizing to defend its market position and that San Francisco has proven it’s not only a force to be reckoned with, but that it enjoys a reputation solid enough to pull out volunteers and votes.
Can Airbnb fight City Hall? Let’s see what happens next.