Supply and demand, meet social technology. And travelling. And taxes. Yup, the age-old economic forces are surfing on the backs of social sharing and online sites like VRBO, airbnb, Tripping, Roomorama, and probably others. Absent or travelling condo owners (supply) and tourists and others looking for short-term rentals (demand) meet via the market mechanism of these technology-enabled marketplaces.
Indeed, there’s a global trend afoot and it’s got Canadian condos and the communities in which they’re located caught right up in a dilemma: is this a problem? Or pay-dirt? Trick question. We know that for some it’s a problem because it’s getting media attention. We’ll ask for your input and feedback below, which will contribute to an upcoming blog delving into the problems, and possible solutions.
But we’re going to focus this blog on pay-dirt.
The global trend mentioned earlier is travelers who are demanding a more “authentic” experience when they venture on to new frontiers. “Live like a local” is where it’s at.Plus the ability to stay in someone’s home opens up possibilities to economize on things like dining out – ‘cuz there’s usually an equipped kitchen.
Condo owners – the sellers
Condo owners themselves may like to travel, and being able to open up their homes to other travelers and gain some income from that just helps add to the travel kitty. Not to mention the help in covering the overhead at home while away. Some of the owners are actually businesses or real estate investors who buy these condos specifically to rent them out, short-term or otherwise. But in either case, it’s classic supply and demand.
Tourism spending is no laughing matter, and where visitors come so too come their dollars. The neighbourhood restaurant, the local transit service, the taxi drivers, the corner grocery stores – all stand to benefit when these “short term” travelers walk out of their “home away from home” and open their wallets.
The fact that there are properties/suites/accommodations listed from cities all across Canada on global sites like airbnb helps boost the passive (and free) geographic marketing opportunity. It also brings people in to the country/city/neighbourhood who might not otherwise come…and BTW, they spend when they’re here.
Overall economic activity
These short-term rentals contribute to overall economic activity generating an impressive $88.5 million (2013 figures). In fact, tourism’s piece of the GDP pie is larger than forestry, fisheries and agriculture combined. The federal government’s share of tax revenue generated by tourism in 2013 was $9.8 billion, and the industry created or supported 628,000 jobs.
Back to the problem
We want to hear from you.
We know there have been cases of noise, damage, reduced security, and more in private condominium buildings where one or more suites are rented out for short-term stays.
And we know this issue is on the radar of strata councils and condo boards from coast to coast. Some have implemented by-laws that ban, others that restrict.
We know municipalities like Vancouver and Toronto are dealing with this at their respective city halls. Both have existing by-laws that either prohibit or are too vague to address the short-term rental craze, and staff and elected members are studying.
So, now it’s your turn.
What’s happening in your condo? Are short-term rentals permitted, or a problem where you live?
Are you on a condo board, or strata council, that has changed bylaws to deal with sites like VRBO and Airbnb? What did you do?
Do you think the economic benefits of the big picture outweigh the private property-owner rights of individual condo owners?
Let us know, and watch for an upcoming blog where we dig deeper into the problems and potential solutions.