Whenever new technology or social change creates a new business model, many people jump on the get-rich-quick bandwagon. A business formerly dominated by regulated professionals quickly becomes inundated with amateurs. They set their own rules, they make up their own standards, and the less reputable move rapidly into illegal activities. In the long run, somebody gets burned. It’s usually the public, and most often the poor.
In the case of the ride-hailing and short-term accommodation industries, each has turned a segment of our social structure on its head, so the effects are widespread. Sooner or later the level of government in charge needs to create a legal framework to control the new enterprises. Ride hailing has been pretty well taken over by Uber, which is intelligent enough to exert enough control to keep the authorities placated and set rates close enough to those of the regular taxis to dodge that bullet as well.
Short-term Accommodation…Not So Much
Adrienne Arsenault hosted an interesting roundtable discussion on CBC News last week. She brought together stakeholders in the rental market to hear their opinions. The discussion was predetermined by the choice of participants: two long-term renters and two Airbnb owners.
Airbnb has proven supreme in the quasi-hotel field, and that company has not been able to mitigate the impact on society, partly because of the shortage of rental housing of any sort in most of Canada. Every Airbnb that comes online means one less housing unit for a long-term renter. And who has the right to tell people what to do?
Rights and Responsibilities
The right of citizens to do what they like with their own property is always moderated by the needs of society. This is nothing new or revolutionary. I’m not allowed to do a myriad of things on my property, such as make loud noises, display junked cars, dig up First Nations artifacts, grow marijuana…the list goes on. Many of the things I am allowed to do, such as run a home-based business or make major renovations, are subject to regulation. But the short-term rental regularions don’t take several things into account.
Factors Involved
Rich people own. Poor people rent. This widens the horizontal split in society and provides a flash point for bad feeling. In the CBC round table, the argument split right down the middle. Owners said, “I have a right to make a living the best way I can. I have bills to pay, too.” Renters said, “You can’t take away our right to a place to live.” And there the impasse remained. As one participant put it, “As long as my housing is your investment, we’re going to have a problem.”
Canada’s record for creation of social housing is 37th out of the top 38 countries in the world.
In the major cities, universities are making a business out of selling post-secondary education to foreign students, and this influx of population must be housed.
Canada is hosting a record number of immigrants and refugees this year. We need them, but we have to accommodate them.
The Solution:
The consultant that participated in the roundtable stated the solution clearly: “We can’t have the Wild West happening in the housing market.” Why not? Look around the country.
Toronto
In Canada’s largest housing market, the situation has been exacerbated by 10,000 new Airbnbs coming online this year. Can we count on the government to regulate this? Well, since Premier Ford’s solution to building housing is to give permits to his developer buddies to take the land out of the Green Belt, I don’t see much motivation at the Provincial level, anyway.
Port Alberni
At the other end of the country and of the socio-economic scale, you can’t get a permit to run an Air BnB in Port Alberni. City council doesn’t allow them. However, Airbnb lists 60 rooms on their site for Port Alberni. This “head in the sand” attitude by civic officials means that the short-term rental market in that town is completely unregulated. Welcome to the Wild West Coast.
The Bottom Line
My prediction for the future is that a lot of homeowners will discover that running accommodation for strangers in your house isn’t worth the bother. They will fade out, easing the pressure somewhat. But they will be replaced by entrepreneurs who have no personal touch with the clients and no empathy for anyone. Prices will rise to near hotel rates, and the popularity of the model will wane.
However…
The problem won’t go away, and it isn’t totally commercial. Business interests won’t be happy, but the social aspect of the need for more housing is the responsibility of government. As happens in every other industry that affects the public, temporary housing must be regulated, not just based on the fairness to business, but on the needs of society.
And more rental housing and social housing must be built. Yes, I know. the housing crisis bounces back and forth between the feds and the provinces, and rental standards are a civic game. Once again, here’s a call for all levels of government to quit politicking and get something done.