'They're basically running hotels': Property management companies Airbnb's biggest winners

A small number of commercial property managers generate a majority of Airbnb's overall revenue, eating up available housing stock and driving up rent in Canada's three biggest cities, a new study from Montreal's McGill University concludes.

"Just 10 per cent of hosts account for a majority of the revenue and the nights booked on Airbnb consistently in Toronto, Vancouver and Montreal," said the study's lead author, David Wachsmuth, a McGill professor of urban planning, in an interview on CBC Montreal's Daybreak.

The study, titled Short-term Cities: Airbnb's Impact on Canadian Housing Markets, will be published Tuesday.

"What we're seeing with short-term rentals is that the right of property owners to make money is trampling on the right of people to afford houses," Wachsmuth said.

Airbnb listings grow

Wachsmuth and his colleagues found that all three Canadian cities studied have seen a 50 per cent year over year increase in the number of listings on Airbnb — most of them entire homes or apartments and not just rooms in occupied homes.

They looked at three years of data provided by the analytics firm AirDNA, which offers data to users looking to increase their Airbnb success. The firm collected information on all public transactions, gathering about 80 million data points.

Wachsmuth said it was the best information publicly available.

De facto hotels

Of the three Canadian cities, Montreal has the most active listings on Airbnb, because of the city's popularity with tourists.

In Montreal, the Plateau–Mont-Royal and Ville-Marie boroughs have the most listings.

Wachsmuth and his team found that two or three per cent of the housing stock in those neighbourhoods is now being run by property management companies for short-term rentals.

"There's one in Montreal that has about 160 properties," said Wachsmuth. "They make a couple of million dollars a year on Airbnb, is our estimate."

"They're basically running hotels ... that are split across multiple apartments," he said.

According to Wachsmuth, the most listings in Montreal are from the San Francisco-based property management company Sonder, which also offers listings in Vancouver and across the U.S.

One Sonder property in the Plateau starts at $120 a night, for up to four people, while another loft space in the Plateau, which can accommodate up to 10 people, starts at $249 a night.

"Montreal has quite cheap rents which means that we found — much more so than Toronto and Vancouver — it's a lot easier to out-compete the amount of income you can earn as a landlord from a normal rental by listing on Airbnb," he said.
Airbnb responds

Airbnb disputes Wachsmuth's findings.

"The author of this study has a history of manipulating scraped data to misrepresent Airbnb hosts, the vast majority of whom are middle-class Canadian families sharing their homes to earn a bit of additional income to help pay the bills," wrote spokesperson Lindsey Scully in an emailed statement.

"A very small percentage of the entire housing stock in Montreal is rented frequently enough to out-compete a long-term rental, undercutting the author's baseless conclusions about housing units removed."

Airbnb says more than 80 per cent of hosts on the site are sharing their primary residences and are doing so three to four nights a month to earn a little extra income.

3 simple strategies to regulate Airbnb

​In December 2015, the Quebec government passed Bill 67 to regulate short-term rentals in the province.

People who regularly rent  properties need to get a certificate from the province's tourism ministry, pay a lodging tax and advise their landlords that they will be renting to tourists.

The legislation also increased the number of provincial inspectors from two to 18 to help enforce the new rules.

But Waschmuth said the research showed the legislation hasn't had an impact in Montreal on short-term listings. He proposed three steps to regulate services like Airbnb:

1. Hosts should only be allowed to rent their primary residences, so no multiple listings.
2. No full-time rentals, that is no properties that solely exist to be rented on Airbnb. For example, Amsterdam caps rentals at 60 days of the year, while London limits rentals to 90 days. 
3. Airbnb and other short-term rental platforms need to be required to enforce their regulations themselves, because it will be too difficult for city inspectors to do that.

Original Article
Source: CBC
Author: Andrea Bellemare