Regulating short-term rentals in Vancouver—a Band-Aid that ignores key driver of rental crunch
Vancouver City Council recently voted to ban the listing of secondary residences on short-term rental platforms such as Airbnb. The hope is that this will make more units available for long-term renters.
With a vacancy rate below 1 per cent, it’s understandable that council is worried about the availability of rental units. But rather than Band-Aid approaches, it should focus on removing barriers to constructing more housing units rather than policing rental properties.
Ultimately, a tight rental market is the result of a lagging supply of rental units. Long lineups at apartment open-houses raise more questions about what’s preventing units from coming onto the market than why some units are available for shorter terms than others.
In fact, city hall is responsible for one of the main drivers of the imbalance between supply and demand in Vancouver. According to a recent survey of homebuilders and developers, it takes the better part of two years, on average, to obtain a residential building permit in the city. Add to this the time required to actually build new units and it’s almost impossible for the housing market to adequately respond to growing demand.
Just across Boundary Road in Burnaby, it takes only a third the time it does in Vancouver to obtain a permit. Across the Lower Mainland, the average is 10 months. If Vancouver City Hall is serious about boosting the housing supply, there’s clearly room to streamline its approvals process.
Hampering homebuilding doesn’t just affect the number of new units entering the market, but also the number of old units that remain occupied because people can’t move out and up the property ladder. In short, a tight housing supply becomes everyone’s problem.
Preventing Vancouverites from renting out secondary units may seem politically appealing in the short term, but it does nothing to address the city’s long-term problem—a lagging housing supply. Until this fundamental imbalance is addressed—starting with more efficient land-use regulations—low vacancies and high rents won’t go away any time soon.