Airbnbs don't cause residential rent increases: Conference Board
Rents in Canada have gone up, along with the growth of Airbnb businesses, but there’s little evidence that the two are connected, a new survey from the Conference Board of Canada finds.
The survey appears to contradict others, including one from from McGill that drew direct links between higher rents and increased conversion of rental properties to commercial short-term rentals.
As BIV reported last month, the Urban Politics and Governance research group at McGill’s School of Urban Planning concluded that short-term rentals took 16,810 housing units off of B.C.’s long-term rental market in June 2023, “signifying a 19.1 per cent decline in housing availability over 2022.”
It concluded that, for every addition of one dedicated short-term rental per 100 rental units in a neighbourhood, rents increased an average of $49 for that neighbourhood.
But the Conference Board of Canada has also looked into the rise in both Airbnb-style short-term rentals and long-term rents, and found little correlation.
“We tested for a causal link between Airbnb activity and rent increases between 2016 and 2022 across 330 neighborhoods in 19 Canadian cities,” the Conference Board study states.
“We find no compelling evidence that the level of Airbnb activity had a meaningful impact on rents. Out of the 30 per cent increase in rents observed in our sample of neighbourhoods between 2016 and 2022, at most less than 1 percentage point, or just under $10, can be attributed to increased Airbnb activity.”
The Conference Board study zeroed in on Airbnbs that are likely to offer short-term rentals on a full-time basis, as it was assumed these would be most likely to affect the long-term residential rental market. It then compared that data to the number of households across 330 neighbourhoods in 19 of the largest cities in Canada.
“Rents and Airbnb activity are positively correlated -- neighbourhoods that have higher concentrations of Airbnb tend to also have higher rents,” the report acknowledges.
“The key question is whether higher Airbnb activity is causing higher rents in Canada and contributing to a worsening of rental affordability, or if both higher rents and higher Airbnb activity are driven by other factors, such as proximity to amenities like restaurants, public transit, and parks, which would increase desirability for both long- and short-term renters.”
The study used a “difference-in-difference” analysis model, “which compares how rents evolved in different neighbourhoods within cities and how this was affected by the level of Airbnb activity in each neighbourhood.”
"Airbnb activity, at its current levels, has not resulted in an economically meaningful increase in rents across 19 of the largest Canadian cities," the Conference Board study concludes.
“At the provincial level there is evidence that Airbnb activity has put some upward pressure on rents in Quebec. Policies introduced by municipalities and provinces regulating Airbnb activity have not been successful in reducing rents, though they were associated with a significant reduction in Airbnb activity.”
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