Government of British Columbia launches short-term rental registry with mandatory host registration; hosts must display provincial number on listings by May 1, 2025, or face removal by June 1

January 20, 2025 (press release) – NEWS RELEASE For Immediate Release
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Jan. 20, 2025 Ministry of Housing and Municipal Affairs Short-term rental registry will deliver more homes, ensure hosts follow rules

VANCOUVER – To help more families find a place to live in B.C. and build on actions underway, the Province is launching a new short-term rental (STR) registry.

“We are taking action to help more people find a home in the communities they love by reining in speculators who are operating illegally,” said Ravi Kahlon, Minister of Housing and Municipal Affairs. “The launch of the registry is the next step to provide more long-term homes for people, giving hosts who are playing by the rules the ability to continue to legally operate and welcome guests while further cracking down on speculators who are breaking the rules.”

Anyone operating a short-term rental in B.C. and listing on platforms, such as Airbnb, Vrbo and others, will be required to register with the Province, including hosts operating outside areas with the principal-residence requirement.

To register, hosts need to complete an online application available here: https://gov.bc.ca/strregistry  

Hosts will receive a provincial registration number that must be displayed on all online listings in B.C., effective May 1, 2025. Hosts who do not comply and who do not have a provincial registration number will have their listings taken down as of June 1, 2025.

Registration fees are:

• $100 per year for an STR in which the host lives, such as a whole home the host rents out while away or a bedroom within it;
• $450 per year if the host does not live in the STR, such as a secondary suite, cottage or laneway home; and
• $600 per year for an entire strata hotel.

Hosts will receive a 50% discount on fees if they register by Feb. 28, 2025, or a 25% discount if they register by March 31, 2025. Revenue from the program will support STR enforcement and compliance in communities throughout B.C.

The provincial registry requirement is in addition to any requirements and rules set out by local municipalities and governments, including any business licence requirements.

Reining in the number of illegal short-term rentals in B.C. is one of the steps the Province is taking to create more homes for people faster.  

Preliminary ministry data shows a 10% decline in the number of entire homes being listed on short-term rental platforms in areas with a principal-residence requirement since March 2024, opening up additional housing options for people in the province.

Launching the provincial registry is a step that gives the Province another tool to help enforce rules and to ensure mini-hotel operators and people with multiple, illegal listings are no longer allowed to operate.

Action on short-term rentals is part of the provincial government’s $19-billion investment through the Homes for People Plan. Since 2017, the Province has more than 90,000 homes delivered or underway, with actions underway to help deliver thousands more over the next 10 years.

Quotes:

Ken Sim, mayor of Vancouver –

“We’re proud to welcome people from around the world to visit and make Vancouver their home. As our city grows, it’s vital to ensure there’s enough housing for everyone who wants to live here. Together, we’re finding the right balance – supporting our thriving tourism industry while also prioritizing housing for our residents.”

Walt Judas, CEO, Tourism Industry Association of BC –

“We're pleased to see the launch of the new short-term registry, which is something we advocated for and supported as part of the regulations. The suite of STR tools introduced by the Province to ensure there are enough homes for people who live and work in B.C., as well as plenty of accommodations for those who visit communities in every region, strikes the right balance.”

Quick Facts:

• A researcher at McGill University found that B.C.’s efforts to date to rein in STRs reduced rents by 5.7% and saved people in British Columbia more than $600 million on their rents in 2023. 
• As of June 2024, multinational short-term rental platforms were required to report data to the Province monthly on all short-term rentals operating in B.C.
• This information has been shared with more than 50 local governments to support bylaw enforcement. 

Learn More:

To register an STR, visit: https://gov.bc.ca/strregistry

To find out more about the registry, visit: https://www2.gov.bc.ca/gov/content/housing-tenancy/short-term-rentals

To learn more about the Province’s efforts to ensure homes are used for people living and working in B.C., not turning a profit, visit: https://strongerbc.gov.bc.ca/housing/

To learn more about the McGill University researcher’s report, visit: https://upgo.lab.mcgill.ca/publication/bc-str-2024/Wachsmuth_BC_STR_2024.pdfShort-term rental regulations in British Columbia David Wachsmuth September 2024 A report prepared by researchers from the Urban Politics and Governance research group, School of Urban Planning, McGill University 1 Executive summary This report analyzes short-term rentals (STR) regulation in the province of British Columbia, and applies the results of a new Canada-wide study of the impact of STR regulations on rents to BC communities. It calculates the amount of rent decreases in BC attributable to municipal STR principal-residence restrictions, the caused by STRs, estimates the likely impact of the Province’s new STR rules on rents, and provides early evidence about host compliance with the new rules. THE EFFECT OF PRINCIPAL- 5.7%, and saved British Columbia renters RESIDENCE REQUIREMENTS ON more than $600 million last year in lower rent RENTS IN BRITISH COLUMBIA payments. • The Province of British Columbia has • In the City of Vancouver, for example, renters introduced principal-residence restrictions on now pay an average of $147 less each month STRs throughout much of BC, but there has not than they would have if the City had not previously been systematic evidence about the restricted STRs to a host’s principal residence. effectiveness of this policy in reducing housing costs. • If the Province’s new rules have the same efficacy as existing municipal rules, British • Wachsmuth and St-Hilaire’s (2024) new study Columbia renters in medium and large cities finds that the policy directly causes rents to that are newly subject to STR principal decrease: by the end of 2023, Canadian residence requirements will see their rents neighbourhoods with principal-residence decline 4.0% by 2027, which will be a savings restrictions in place at the beginning of 2023 of $592 million per year by 2027. had rents which were $50 less than they would have been without those restrictions—a 3.3% • This implies that, if the Province’s STR rules difference. were to be repealed after 2024, within two years BC renter households in these cities • The result is that municipal STR regulations would have paid an extra $1.0 billion in across British Columbia have reduced rents by rent. 2 EARLY EVIDENCE ABOUT HOST areas which did not previously have such local COMPLIANCE WITH BRITISH restrictions. COLUMBIA’S NEW STR REGULATIONS • By contrast, in the parts of BC that are not subject to the Province’s principal-residence • Early evidence shows that the Province’s restriction, no decline in listings was observed. principal-residence restriction has begun to remove commercial STRs from the market. • Highly active listings have been delisted more frequently than less active ones: 18.7% of the • In jurisdictions subject to the restriction, FREH listings that were booked 240 nights or more listings dropped substantially between April in 2023 are no longer visible on Airbnb. and May 2024, and have continued to decline —in total, 15.8% of previously detected FREH • The decrease in FREH listings was most listings in these areas had disappeared from pronounced in Northern BC and on Vancouver Airbnb by July 2024. Island. • The drop was most pronounced in jurisdictions • These findings lend confidence to the which had previously adopted local principal- conclusion that the Province’s new STR rules residence restrictions, but was also seen in will meaningfully lower rents for BC residents. 3 Table of contents EXECUTIVE SUMMARY ............................................................................................. p. 2 1. INTRODUCTION ................................................................................................. p. 5 2. THE EFFECT OF PRINCIPAL-RESIDENCE REQUIREMENTS ON RENTS IN BRITISH COLUMBIA ............................................................................................................. p. 7 3. EARLY EVIDENCE ABOUT HOST COMPLIANCE WITH BRITISH COLUMBIA’S NEW STR REGULATIONS ...................................................................................................... p. 16 APPENDIX. DATA AND METHODOLOGY ............................................................... p. 22 REFERENCES ......................................................................................................... p. 24 AUTHORSHIP AND FUNDING ............................................................................... p. 25 ABOUT UPGO ...................................................................................................... p. 25 4 1. Introduction In October 2023, Bill 35, also known as the stringent than most of the municipal rules in force Short-Term Rental Accommodations Act, passed in Canada, including Vancouver and Victoria, for British Columbia’s provincial parliament. The Act example. The Province also exempts certain introduced significant new rules governing the communities from the rules altogether, most operations of short-term rentals (STRs) in BC, and significantly ski resorts and resort municipalities established BC as the Canadian leader in such as Whistler and Tofino. Moreover, many provincial STR regulation. The key provisions of areas covered by the Province’s rules are already the Act are being unrolled in a staggered fashion; covered by more stringent municipal rules. increased fines and regional licensing authority However, the Province’s principal-residence were introduced in October 2023, a principal- requirements remain the largest-scale such residence requirement applying to larger areas of initiative in Canada. the province came online in May 2024, and a province-wide STR registration system featuring What effect will they have on housing platform accountability requirements for STR affordability? Until recently, no empirical research platform operators is due to arrive in early 2025. existed in a Canadian context that would help answer this question. In the last several years, The full implications of BC’s STR rules will not be there have been several policy reports which have clear until 2025, when the provincial registration produced estimates of the impact of STRs on rents system is online and platforms such as Airbnb in Canada, but these have been limited to become obligated to remove listings which do not particular geographies, have not been conducted have valid licenses. However, the province-wide with transparent data and academic principal-residence restriction which entered into methodologies, or have presented purely force on May 1 is significant on its own terms. In correlational analyses which don’t rigorously recent years, many municipal governments in establish causal relationships. Canada have introduced principal-residence restrictions on STRs, motivated by a widespread Now for the first time, a forthcoming academic belief that STRs which are not operated out of a study has examined the relationship between STR host’s own home are a contributor to rising activity and rents across all Canadian cities using housing costs, since they remove housing units causal methods. “Supply, demand, or stickiness? A from the long-term market. Following this logic, causal analysis of the effects of short-term rental BC’s province-wide principal-residence rules activity on residential rents” by David Wachsmuth should exert downward pressure on rents in the and Cloé St-Hilaire is currently undergoing peer areas in which it applies. review at an academic journal, and is freely available online as a public preview here: https:// The details of BC’s rules are as follows. In upgo.lab.mcgill.ca/publication/canada-str-rent/ municipalities with a population of 10,000 or wachsmuth_st_hilaire_public_preview.pdf. higher, along with smaller neighbouring communities, STRs are restricted to a host’s Wachsmuth and St-Hilaire (2024) use causal principal residence and a single secondary suite inference techniques to measure the impact of located on the host’s property. The carve-out for STRs on rents by analyzing the mediating effect secondary suites makes the Province’s rules less of STR principal-residence requirements. This is 5 the first such academic analysis conducted in In light of the recent introduction of the Province Canada, and it provides systematic evidence of British Columbia’s STR principal-residence about both the extent to which STR activity requirements, researchers from the Urban Politics erodes housing affordability in Canadian and Governance research group (UPGo) at communities, and the effectiveness of principal- McGill University were commissioned by the residence rules at addressing housing British Columbia Hotel Association to analyze the affordability challenges. implications of Wachsmuth and St-Hilaire’s (2024) study for British Columbia communities Wachsmuth and St-Hilaire use the “difference-in- and summarize the results for a non-academic differences” framework which is widely deployed audience. They were also commission to provide by economists and other social scientists to an early analysis of the Province’s new STR rules. measure the true causal impact of a policy change when a random trial cannot be devised. This report is the result of that effort. Specifically, The approach uses regression analysis to in this report we provide: compare jurisdictions which implemented a policy change with others which did not implement it in 1. An analysis of the impact of principal- order to determine what would have happened residence restrictions on rents in British had the former jurisdictions not implemented the Columbia, both with respect to municipal STR policy change, and thus the true causal impact of rules which have already had an impact on the policy. rents and the new provincial STR rules which are expected to have a future impact. Their study also directly measures the effects of STR activity on rents by decomposing STR activity 2. An analysis of host compliance with the into three channels: supply effects (commercial Province’s STR rules, using a comparison STRs taking long-term housing off the market), between listing trajectories in areas subject to demand effects (home sharing STRs leading the Province’s principal-residence restrictions residents to demand more housing), and price- and in areas not subject to these restrictions. stickiness effects (high STR prices make landlords more willing to demand high rent increases in the Data and methodology are discussed in the long-term rental market). The study uses cutting- Appendix, and all the code used to generate the edge techniques for addressing temporal and analysis in the report is available online at https:// spatial autocorrelation. github.com/UPGo-McGill/bc-report-2024. 6 2. The effect of principal-residence requirements on rents in British Columbia The Province of British Columbia has introduced principal-residence restrictions on STRs throughout much of BC, but there has not been systematic evidence about the effectiveness of this policy in reducing housing costs. Wachsmuth and St-Hilaire’s (2024) new study finds that the policy directly causes rents to decrease: by the end of 2023, Canadian neighbourhoods with principal-residence restrictions in place at the beginning of 2023 had rents which were $50 less than they would have been without those restrictions—a 3.3% difference. The result is that municipal STR regulations across British Columbia have reduced rents by 5.7%, and saved British Columbia renters more than $600 million last year in lower rent payments. In the City of Vancouver, for example, renters now pay an average of $147 less each month than they would have if the City had not restricted STRs to a host’s principal residence. If the Province’s new rules have the same efficacy as existing municipal rules, British Columbia renters in medium and large cities that are newly subject to STR principal residence requirements will see their rents decline 4.0% by 2027, which will be a savings of $592 million per year by 2027. This implies that, if the Province’s STR rules were to be repealed after 2024, within two years BC renter households in these cities would have paid an extra $1.0 billion in rent. 7 INTRODUCTION While a wide variety of STR regulations have approximately 800 housing units to the long-term been implemented in Canadian municipalities, market (Wachsmuth et al. 2021). A more recent one of the most common is a principal-residence evaluation of Toronto’s 2021 adoption of a restriction. Generally speaking, this policy principal residence requirement found that it requires STR operators to live in the housing unit returned approximately 4,000 housing units to the that they are offering as a STR, which rules out long-term market (Wachsmuth and Buglioni offering dedicated STRs at all. (Although 2023). But the direct impacts of these policies—or sometimes principal-residence restrictions have of the many other principal residence an exemption for an accessory dwelling unit or requirements which Canadian municipalities have secondary suite.) adopted—on residential rents have remained difficult to measure. Principal-residence requirements intuitively seem likely to help mitigate housing affordability In this chapter we discuss the first systematic problems, since they make it illegal for STR hosts Canadian academic research to measure the to remove housing units entirely from the long- actual causal impact of principal-residence term market. But, particularly since the Province of requirements on rents (Wachsmuth and St-Hilaire British Columbia unrolled a province-wide 2024). We first summarize the findings of principal-residence requirement (albeit one with a Wachsmuth and St-Hilaire’s (2024) Canada-wide number of exceptions), there has been vigorous causal analysis of the impact of STR rules on debate about whether these regulations are residential rents. Then we measure the detailed actually effective at achieving housing affordability impact of these rules on the British Columbia goals. municipalities which have already adopted them. And finally, we discuss the likely outcome of the One detailed evaluation of Vancouver’s principal- Province of British Columbia’s move to extend residence rules estimated that, prior to the onset of principal-residence requirements across much of the Covid pandemic, the policy had returned the province. THE FIRST CROSS-CANADA ANALYSIS OF STR REGULATIONS In their forthcoming article, Wachsmuth and St- the true causal impact of a policy change when a Hilaire (2024) conduct a causal analysis of the random trial cannot be devised. (Ideally impact of STR principal-residence requirements researchers would like to randomly assign on average rent levels. This is the first such jurisdictions to receive or not receive a policy academic analysis conducted in Canada, and it change in order to judge its efficacy, just like a provides systematic evidence about the medical trial, but this is rarely feasible.) The effectiveness of principal-residence rules at difference-in-differences approach uses regression addressing housing affordability challenges in analysis to compare jurisdictions which Canadian communities. implemented a policy change with others which did not implement it in order to determine what Their analysis uses the “difference-in-differences” would have happened had the former jurisdictions framework which is widely deployed by not implemented the policy change, and thus what economists and other social scientists to measure the true causal impact of the policy change was. 8 Wachsmuth and St-Hilaire identified the 38 logged average rents which are 0.096 standard Canadian cities of 10,000 or more people which deviations lower than they would have been if implemented an STR principal-residence restriction those neighbourhoods did not become subject to between 2017 and the beginning of 2023, and such restrictions. built a difference-in-differences model for these cities along with all other cities in their provinces Figure 1 shows the effect over time: the points (British Columbia, New Brunswick, Ontario, and indicate the change in rents in communities before Quebec) to serve as the comparison cases. (green points) and after (orange points) they implement principal-residence restrictions, The model tests whether principal-residence compared to communities which did not restrictions have an impact on rent levels, and is implement such restrictions. Before communities able to identify true causal (i.e. not just implement STR regulations, there is no difference correlational) effects. What they found was that in rent levels between communities which do STR regulations have a strongly negative causal implement regulations and those which don’t. impact on rent levels, and that this impact is (This is an important statistical test demonstrating significant at a p < 0.0000000001 level—far in that the analysis in the article is correct.) But once excess of the usual p < 0.05 threshold for the regulations are implemented, rents begin significance in social science research. This means declining in the communities which implement that there is virtually no chance the results are them, and they continue to decline year after year. spurious. Since rents in Canadian cities have risen so much in recent years, this decline usually looks like a According to Wachsmuth and St-Hilaire’s results, smaller increase than would have otherwise neighbourhoods located in municipalities which occurred, rather than an actual decrease in the implement principal-residence restrictions have average rent. Figure 1. The average change in rent caused by STR principal-residence regulations in Canada, by length of time since regulations came into force (point estimates with 95% confidence intervals) 9 Translated into practical terms, in neighbourhoods restrictions in place by the beginning of 2023 had which implemented principal-residence rents which were $55 less than they would have requirements, the year after the regulations took been without those restrictions in place—a 3.3% effect rents were on average $24 lower each difference. In total, renters in these communities month than they would have been in the absence were saving $155.8 million each month in lower of the regulations—a 1.7% difference. By the end rents thanks to their STR principal-residence of 2023, neighbourhoods with principal-residence requirements—nearly $2 billion per year. PRINCIPAL-RESIDENCE RESTRICTIONS WERE WORKING IN BC PRIOR TO THE PROVINCE’S NEW RULES The evidence from across Canada is that STR neighbourhoods, in the first year principal- principal-residence requirements lower rents for residence restrictions were in place, these Canadian renters. The same is true in British neighbourhoods saw an average decrease in Columbia specifically. As of January 1, 2023, 55 monthly rents of $21 thanks to their STR rules. neighbourhoods across ten BC municipalities had a principal residence restriction in place. Three of By the end of 2023, rents were an average of these municipalities adopted such a restriction $110 lower in communities with STR restrictions in prior to 2018, and were excluded from the nation- place than they would have been if these wide model in Wachsmuth and St-Hilaire (2024) restrictions were not in place. This is a 5.7% because of the lack of sufficient early adopters in decrease: the average rent was $1,821 per the national dataset. Among the remaining 52 month, but the model in Wachsmuth and St- 10 Figure 2. The estimated total monthly rent saved by British Columbia renters attributable to STR principal-residence requirements across British Columbia, according to Wachsmuth and St-Hilaire (2024) Hilaire (2024) suggests it would have been high level of statistical significance—p < 0.001), $1,931 in the absence of STR rules. This means principal-residence regulations in the seven BC that BC renters in these seven municipalities are municipalities which implemented them caused collectively saving $49.9 million each month in rents to fall an average of $34 in the first year the rent payments, or $600 million each year. regulations were in effect. Figure 2 shows the monthly rent savings In the City of Vancouver, where there have been attributable by Wachsmuth and St-Hilaire’s model concerns that the City’s STR rules have been not to STR regulations in British Columbia each year; been effective, these rules have in fact caused the figure demonstrates that STR principal- rents to decline by at least 6.9% compared to the residence rules have become increasingly level they would now be at had the rules not taken meaningful in BC over the last several years, as effect. Across the city, renters pay an average of these rules have had a longer time to become $147 less each month than they would have if the effective in municipalities which were regulatory City had not restricted STRs to a host’s principal pioneers (such as Vancouver) and as they have residence. This means that, this year, Vancouver been implemented in additional jurisdictions (such renters will collectively save $530 million on rent as Burnaby and Nanaimo). payments thanks to the City’s STR rules. These results apply the model in Wachsmuth and Figure 3 shows the monthly rent savings which St-Hilaire which uses all municipalities across Wachsmuth and St-Hilaire’s (2024) model Canada, but a version which only looks at British attributes to STR rules in Metro Vancouver. The Columbia municipalities demonstrates even evidence is clear: STR rules work to bring down stronger effects. According to an BC-specific rents. In some Vancouver neighbourhoods, average version of the model (which retains an extremely rents are as much as $200 lower than they would 11 Figure 3. The estimated change in average monthly rent caused by STR principal-residence requirements across Metro Vancouver, according to Wachsmuth and St-Hilaire (2024) have been without STR regulations, thanks to the Table 1 summarizes the estimated effect of STR compounding effects of the regulations over time. regulations across BC municipalities, presenting (I.e., as Figure 1 above shows, the longer a the range of estimates from the Canada-wide jurisdiction has had principal-residence restrictions model in Wachsmuth and St-Hilaire (2024) and in place, the larger the impact on rents.). the BC-specific version described here. WHAT ARE THE RESULTS LIKELY TO BE OF THE NEW PROVINCE-WIDE PRINCIPAL-RESIDENCE RESTRICTION IN BRITISH COLUMBIA? As discussed in the previous chapter, on May 1, build with regulations that respond to local 2024, the Province of British Columbia’s province- conditions and priorities. While it is far too soon to wide STR regulations came into effect. They measure the actual impact of this new requirement include a principal-residence requirement for on rents in BC cities, the results in Wachsmuth and much of the province which now acts as a “policy St-Hilaire (2024) provide a strong basis for floor” upon which municipalities are welcome to estimating the likely results. 12 Estimated average monthly Estimated % of monthly rent Estimated total monthly rent saved City rent saved (2023) saved (2023) (2023) Vancouver $147 - $155 6.9% - 7.3% $44.1M - $46.5M Burnaby $4 0.2% - 0.3% $0.2M - $0.3M Victoria $78 - $96 5.0% - 6.0% $5.2M - $6.4M Nanaimo $20 - $24 1.5% - 1.8% $0.3M Other municipalities $4 - $5 0.3% - 0.4% $61,000 - $67,000 Table 1. The estimated monthly rent savings caused by STR principal-residence requirements across British Columbia, according to Wachsmuth and St-Hilaire (2024) As of January 1, 2023, 55 neighbourhoods across principal-residence restriction could be expected to British Columbia were located in or contained be 2.1% lower than they would be in the absence municipalities which had implemented principal- of that restriction, based on the experiences in the residence requirements. However there were 75 first year of implementation of jurisdictions which neighbourhoods in cities of 10,000 people or more implemented principal-residence restrictions in that had not implemented such requirements. Of recent years. these 75 neighbourhoods, 71 either implemented a principal-residence requirement locally between Assuming that the underlying level of rent growth January 2, 2023 and April 30, 2024, or became in BC will be similar to the last two years, this subject to the Province’s principal-residence 2.1% reduction in rents in the cities now covered requirement as of May 1, 2024. The remaining by the Province’s STR regulations means that these four neighbourhoods (located in Dawson Creek, regulations are likely to reduce the average Fort St. John, Quesnel, and Taylor) do not have a household’s monthly rent by $41. That is more local principal-residence requirement and also are than $250 million dollars in annual rent saved— not subject to the Province’s requirement. an especially significant number considering that it does not include the cities which already had Wachsmuth and St-Hilaire’s (2024) model allows principal-residence rules in place by the beginning us to estimate what the likely effect of an STR of 2023, such as Vancouver and Victoria. principal-residence restriction would be on rents in these neighbourhoods, assuming that the Additionally, the rent savings would be expected restriction has the same efficacy as the average to increase in subsequent years: to 3.3% in 2026 Canadian municipality that implemented STR and 4.0% in 2027, based on the experience of regulations at some point in the last several years. jurisdictions with rules already in place. Again assuming baseline rent growth remains steady, The model suggests that average rents next year in this would mean that average monthly rents are the neighbourhoods that have recently received a $94 lower in fall 2027 than they would be in the 13 Figure 4. The change in average monthly rent in 2025 which is expected to result from the new provincial STR principal-residence requirements in Lower Mainland neighbourhoods which did not have such requirements as of January 1, 2023, according to the model in Wachsmuth and St-Hilaire (2024) absence of the Province’s STR regulations. This model is cumulative, if the Province’s rules stay in would amount to $49.4 million dollars saved per place for a further two years, the anticipated month by British Columbia renters in medium savings growth to $94 a month by the fall of 2027. and large cities newly covered by the Province’s If, by contrast, the laws were to be repealed in STR regulations, or $592.4 million per year. 2025, these further years of rent reductions would not materialize. In this case, BC renter households A different way of reporting the same findings is in the cities newly subject to a principal-residence that the Province’s new rules have already set rents requirement would have paid an extra $1.0 billion in affected communities on a lower trajectory, such in rent by the fall of 2027 because of the repeal of that average monthly rents in these communities the rules, compared to what they would be should be expected to be $41 lower than they expected to pay if the regulations remain in place. otherwise would have been by the fall of 2025. Because the impact of STR regulations on rents Figure 4 shows the anticipated impact on average measured by Wachsmuth and St-Hilaire’s (2024) 2025 rents across the communities in the Lower 14 Avg. potential Avg. potential Avg. potential Total potential Total potential Total potential City monthly rent monthly rent monthly rent monthly rent monthly rent monthly rent saved (2025) saved (2026) saved (2027) saved (2025) saved (2026) saved (2027) Abbotsford $36 $61 $82 $0.9M $1.6M $2.1M Coquitlam $44 $75 $101 $0.9M $1.6M $2.1M Kelowna $41 $70 $95 $1.0M $1.7M $2.3M Langley $48 $82 $111 $0.9M $1.6M $2.2M Nanaimo C $43 $74 $99 $0.5M $0.9M $1.3M New Westminster $44 $75 $102 $1.2M $2.1M $2.8M North Vancouver $49 $83 $112 $1.9M $3.3M $4.4M Richmond $45 $77 $104 $1.6M $2.7M $3.6M Saanich $39 $66 $89 $0.6M $1.1M $1.4M Surrey $41 $69 $93 $4.1M $7.0M $9.5M Table 2. The estimated monthly rent savings expected in different British Columbia municipalities from the Province’s STR principal-residence requirements, according to Wachsmuth and St-Hilaire (2024) Mainland which did not have a principal- As a result, the estimates in this chapter are residence requirement as of January 1, 2023. conservative, since they assume that the Similarly, Table 2 provides three years of Province of British Columbia would only be as projections for several British Columbia successful in administering short-term rental municipalities which lacked principal-residence rules as the average municipality. In reality, the restrictions as of January 1, 2023. Importantly, Province has significantly greater resources at its these projections do not require any implausible disposal which would make its rules likely to be assumptions about perfect efficacy in enforcing better enforced than the average municipality. STR rules. The projections here simply say: “what Likewise, even in cities which already have is likely to happen if the Province’s new STR municipal STR regulations, additional provincial regulations have the same average efficacy as the oversight and resources will be likely to improve regulations already in force in communities across regulatory outcomes and drive further rent BC and the rest of Canada?” decreases. 15 3. Early evidence about host compliance with British Columbia’s new STR regulations Early evidence shows that the Province’s principal-residence restriction has begun to remove commercial STRs from the market. In jurisdictions subject to the restriction, FREH listings dropped substantially between April and May 2024, and have continued to decline—in total, 15.8% of previously detected FREH listings in these areas had disappeared from Airbnb by July 2024. The drop was most pronounced in jurisdictions which had previously adopted local principal-residence restrictions, but was also seen in areas which did not previously have such local restrictions. By contrast, in the parts of BC that are not subject to the Province’s principal- residence restriction, no decline in listings was observed. Highly active listings have been delisted more frequently than less active ones: 18.7% of the listings that were booked 240 nights or more in 2023 are no longer visible on Airbnb. The decrease in FREH listings was most pronounced in Northern BC and on Vancouver Island. These findings lend confidence to the conclusion that the Province’s new STR rules will meaningfully lower rents for BC residents. 16 INTRODUCTION The previous chapter established two things. First, have passed since their May 1, 2024 based on either the country-wide model in implementation date, and an important Wachsmuth and St-Hilaire (2024) or a BC-specific component of the larger regulatory apparatus (a variant of that model, existing municipal STR province-wide STR registration system) is not principal-residence restrictions have reduced rents expected to be active until 2025. However, it is substantially (5.7%, or $600 million per year, possible to determine whether or not the early according to the country-wide model) in the indicators suggest positive regulatory communities that have adopted such restrictions. momentum. Second, based on the past experience of Canadian municipalities which adopted STR In what follows, we answer this question by principal-residence restrictions, the Province of examining one specific segment of the province’s British Columbia’s new province-wide principal- STR markets: listings on Airbnb which we had residence restrictions are likely to lead to a previously determined (Wachsmuth and St-Hilaire similarly sized ($592 million per year) impact on 2023) were highly likely to be dedicated rents over the next few years. commercial operations. In the parts of the province which are newly subject to a principal- An important assumption of the second conclusion, residence restriction, we should expect many of however, is that the Province’s rules will have an these listings to have been taken offline. In the effect on STR markets which is comparable to the parts of the province which already had municipal average effect which Canadian municipal rules principal-residence restrictions in place, we might have had. If the Province’s regulations are more further expect to have seen some of these listings effective than municipal rules have been, they to have been taken offline, since hosts who had would be expected to have a larger effect on rents been content to break local laws might be less in BC, and if they are less effective than municipal content to break provincial laws. By contrast, in rules have been, they would be expected to have a areas which were exempted from the provincial smaller effect on rents. principal-residence restriction, we would not expect to see any meaningful decrease in these It is too soon to know the full impact of the listings, since their is no additional regulatory Province’s STR regulations. Only a few months scrutiny in these cases. LISTING TRAJECTORIES BEFORE AND AFTER MAY 1, 2024 We begin with a simple apples-to-apples reservations a majority of nights (i.e. 183 nights or comparison. At the end of June 2023, we more) and were reserved roughly half of that time identified 13,624 properties on Airbnb in British (i.e. 90 nights or more). We identified a further Columbia as being FREH (frequently rented entire- 34,665 properties as active on Airbnb but not home) listings, which is to say that, over the FREH.1 To assess the early impacts of the previous twelve months, they were available for Province’s STR rules coming into force, we simply 1 These calculations formed the basis for our calculations of STR-induced housing loss in Wachsmuth and St-Hilaire (2023) and elsewhere, which take these raw counts and apply seasonal adjustment and predictive modelling to infer the total number of housing units taken off the market by STRs. 17 ask: how many of those listings are still active on Airbnb one year later? By comparing FREH to non-FREH listings, and by comparing regions which were affected by the Province’s principal- residence restriction to regions which were not, we can gather evidence about the early effects of the Province’s rules. The top panel of Figure 5 shows what has happened to listings which were active in June 2023 in areas which did not have a principal- residence restriction as of the beginning of 2023 but which became subject to the Province’s rules in May 2024. The panel demonstrates clearly that both FREH (the solid line) and non-FREH listings (the dotted line) were steady from February through April 2024. In May 2024, as the Province’s principal-residence rules came into effect, a noticeable subset of the listings which we categorized as FREH in June 2023 stopped being listed on Airbnb. Compared to the February 2024 numbers, only 86.6% of listings were still visible in May 2024, and the numbers declined slightly to 86.3% by July 2024. Listings which were active in June 2023 but which we did not categorize as FREH also saw a decrease in May 2024, albeit a weaker one than that experienced by the FREH listings, to 90.8% in May and then 88.7% by July. These declines follow months of steady activity among formerly active STRs, and, on their own terms, suggest that many hosts withdrew their non-compliant listings in response to the Province’s new STR rules entering into force. Figure 5. The percentage of STR listings which had been active in June 2023 which were still active in 2024, by The middle panel of Figure 5 shows the trajectory regulatory status. (February 2024 values are 100%.) of the same type of listings for jurisdictions which already had a principal-residence restriction in means that a property which was being offered place as of 2023. In these areas, there was full-time on Airbnb for one-month minimum relatively little change in the types of STRs allowed. bookings might have been permitted under (One potentially significant change is that the municipal rules prior to May 2024, because it was Province’s new rules define STRs as rentals of not classified as a short-term rental, but would fewer than 90 days, whereas many municipalities have become illegal under the Province’s rules, have used 28 days or something similar. This because it is now classified as a short-term rental.) 18 Nevertheless, we observe a modest decrease in summer 2023 are exactly what would be expected FREH listings in the months prior to the May 1 if the Province’s new STR rules are beginning to implementation date for the Province’s have their intended impact. regulations, a steep decline in May, and a further shallow decline in the following months. Relative In jurisdictions subject to the principal-residence to the number of June 2023 listings still active in restriction, FREH listings dropped substantially February 2024, 85.4% were still active in May between April and May 2024, and have continued 2024, and only 81.3% were still active in July to decline. The drop was most pronounced in 2024. Non-FREH listings saw a similar—albeit jurisdictions which had previously adopted local shallower—decline: to 88.4% of February levels in principal-residence restrictions, perhaps May and to 85.6% in July. suggesting that hosts have been most sensitive to situations where they would be violating two levels Turning finally to the bottom panel of Figure 5, of regulation. listings in the parts of BC that were not covered by the Province’s principal-residence restriction Non-FREH listings have also declined in locations had no decline in previously active listings which are subject to the provincial principal- coinciding with the Province’s regulations residence restriction (albeit not as much as FREH entering into force. In fact, the share of both listings); this is most likely due to a combination of FREH and non-FREH listings which had been a commonly observed drop in defunct listings active in June 2023 and which were still active in which accompany new STR regulations and our 2024 was nearly flat throughout the entire study conservative identification strategy for FREH period. In these locations, STR regulations did not listings failing to identify some listings which are in change, and there is correspondingly no fact commercial operations. By contrast, in the evidence of any change in STR activity in and parts of BC that are not subject to the Province’s around May 2024. principal-residence restriction, no decline in either FREH or non-FREH listings was observed. In these In sum, the broad patterns in the trajectories of regions, it has been business as usual in the STR Airbnb listings identified as FREH listings in market. HIGHLY ACTIVE LISTINGS HAVE BEEN DELISTED MORE FREQUENTLY THAN LESS ACTIVE ONES We can deepen these conclusions by examining Figure 6 accordingly divides the listings which were listings based on the volume of their activity. active on Airbnb in June 2023 and located in areas Specifically, while we demonstrated that FREH subject to the Province’s principal-residence listings declined in areas covered by the restrictions by activity category based on the Province’s principal-residence restrictions but reservations they received in the previous 12 months. not in areas not covered by these restrictions (and that non-FREH listings declined in the The figure demonstrates a clear pattern: among former areas as well, albeit less than FREH the FREH listings, the more active a listing was in listings did), it might be the case that more 2023, the more likely it has been to have been active listings were more or less likely to have delisted since May 2024. Among listings which been delisted when the Province’s rules came were on the borderline of FREH status in June into force. 2023 (at least 90 nights reserved, but fewer than 19 120), 89.2% of those active in February 2024 latter saw modest decreases —to 90.0% in May were still active in May 2024, and this proportion and 88.1% in July—which were comparable to the has remained stable over the following two least-frequently rented FREH listings. months. Among listings which had been reserved 240 nights or more, only 85.5% were still active as The results are encouraging from a regulatory of May, and that proportion dropped further to compliance standpoint. Among listings active in 81.3% by July. In general, the more active the June 2023, those which were the most likely to listing, the lower chance it was still visible on have been taken offline in the spring of 2024 Airbnb after May 2024. were those which had been very frequently rented (200 nights or more) in the year ending June Among non-FREH listings, the clearest distinction is 2023. These are the listings of which there can be between those listings which received zero very little doubt that they were commercial reservations over the previous year (i.e. they were operations not being operated out of their host’s defunct) and those which received some non-zero principal residence, and within the first few number. The former saw steady declines throughout months of the Province’s new STR rules coming 2024, likely reflecting the natural decay of defunct into effect nearly 20% of these listings were no listings being pulled from the Airbnb platform. The longer visible on Airbnb. Figure 6. The percentage of STR listings which had been active in June 2023 which were still active in 2024, by 2022-2023 activity. (February 2024 values are 100%.) REGIONAL PATTERNS IN EARLY STR COMPLIANCE A final perspective comes from segmented listing percentage of FREH listings which had been active trajectories geographically. Figure 7 shows the in June 2023 which were still active in 2024 in 20 Figure 7. The percentage of FREH listings which had been active in June 2023 which were still active in 2024 in areas covered by the Province’s restrictions, by tourism region. (February 2024 values are 100%.) areas covered by the Province’s restrictions, by trends are less reliable than in the more populous tourism region. It shows that the drop in previous regions.) Figure 8 shows the monthly change in FREH listings has been most pronounced in the percentage of June 2023 FREH listings still Northern BC and on Vancouver Island, and that active throughout the Metro Vancouver region, there has not been any drop at all in the Kootenay and demonstrates relatively consistent declines in Rockies region. (Northern BC and the Kootenay these listings throughout the region, with the Rockies both had relatively few FREH listings in strongest declines generally seen in the suburban absolute terms, however, which means that these municipalities surrounding the City of Vancouver. EARLY INDICATIONS: THE PROVINCE’S STR REGULATIONS ARE WORKING Overall, in the parts of BC where the Province has The question remains, however, how to interpret restricted most STRs to a host’s principal this 15.8% decline in previously active FREH residence, we found that, compared to February listings. Is this a small or large change? The key 2024, 15.8% of the listings that we had previously detail is that the decline in FREH listings has identified as FREH (and thus likely to be dedicated occurred without any major intervention on commercial STRs) were no longer visible on Airbnb’s part. Airbnb as of July 2024. We did not find any such change in the parts of BC not subject to the In a number of previous instances in Canada Province’s new rules, which makes it highly likely where major new STR regulations have been that the changed observed in areas that fall under introduced, Airbnb removed large numbers of the Province’s new restrictions were in fact caused listings that had prima facie failed to comply. For by those restrictions. example, in March 2023 when the Province of 21 Figure 8. The percentage of FREH listings which had been active in June 2023 which were still active in 2024 in Metro Vancouver. (February 2024 values are 100%.) Quebec obligated Airbnb to remove non- would therefore be reasonable to expect a further compliant listings, 64.5% of total listings were decrease in commercial STR listings. If either removed from Airbnb. In 2018, when the City of Quebec or Vancouver provides a precedent for the Vancouver’s STR rules came online, Airbnb Province of British Columbia, for instance, we removed 30.8% of total listings for failing to might expect somewhere between one third and properly register. The Province of British Columbia two thirds of STR listings in the province to be has not yet unveiled a provincial registration taken down in 2025, when the Province’s system, although it has promised that one is registration system comes online and platform coming in 2025. accountability obligations become enforceable. This means that all of the decline in FREH listings These findings suggest that BC is on a trajectory has been accomplished without the use of the towards decreased commercial STR activity, and easiest mechanism for policing STR listings: mass lend confidence to the conclusion from the removals by the platform operators. When the previous chapter that the Province’s new STR rules Province’s registration system comes online, it will meaningfully lower rents for BC residents. 22 Appendix. Data and methodology The analysis in this report is based on a model to the publicly available calendar combination of private and public data sources. information of each listing. We use this data The key sources are the following: for our core analysis of the STR market, including our counts of active listings, our • Activity data about Airbnb and Vrbo short- breakdown of different listing types, our term rental listings gathered by the estimates of STR-induced housing loss, and consulting firm AirDNA and the non-profit our estimates of listings which are commercial organization Inside Airbnb. This data operations. includes canonical information about every short-term rental (STR) listing on the Airbnb • Additional data about Airbnb listings and Vrbo (including HomeAway) platforms collected by UPGo researchers. This includes which was active in British Columbia between information to verify activity, location and January 2016 and September 2022 (Airdna) registration numbers, and listing photographs and October 2022 and July 2024 (Inside which were obtained through web scrapes. Airbnb). The data includes “structural” information such as the listing type (entire • Data from Statistics Canada and the Canada home, private room, shared room or hotel Mortgage and Housing Corporation room), the number of bedrooms, and the (CMHC). We use this data to analyze approximate location of the listing. AirDNA population and dwelling counts. and Inside Airbnb collect this information through frequent web scrapes of the public Data cleaning: We process the raw STR data we Airbnb and Vrbo websites. Airdna’s data also receive from AirDNA through an extensive data includes estimates of listing activity (was the cleaning pipeline, using our strr software listing reserved, available, or blocked, and package (Wachsmuth 2021), the code for which is what was the nightly price?), which AirDNA available at https://github.com/UPGo-McGill/strr. produces by applying a machine-learning 23 FREH modelling: We define “frequently rented Hilaire’s regression and difference-in-differences entire-home listings” as entire-home STR listings models can be found in the original paper: which are available for a majority of the year (so https://upgo.lab.mcgill.ca/publication/canada-str- 183 days or more in a 365-day period), and rent/wachsmuth_st_hilaire_public_preview.pdf. which are reserved at least 90 days of that year. This is a consistent and conservative way to In order to facilitate public understanding and estimate listings operated sufficiently often that scrutiny of our work, complete methodological they are unlikely to be their host’s principal details, along with all the code used to produce residence. this analysis, are freely available under an MIT license on the UPGo GitHub page at https:// Regression and difference-in-differences models: github.com/UPGo-McGill/bc-report-2024. Detailed methodology for Wachsmuth and St- 24 References Wachsmuth, D. (2021). strr: Tools for Analysis of Short-Term Rental Data. R package version 0.1. https:// github.com/UPGo-McGill/strr Wachsmuth, D., & Buglioni, B. (2023). Short-term and medium-term rentals in the City of Toronto: Market and regulatory analysis. [Report]. City of Toronto. Wachsmuth, D., & St-Hilaire, C. (2024). “Supply, demand, or stickiness? A causal analysis of the effects of short-term rental activity on residential rents.” Public working paper. Available online at https:// upgo.lab.mcgill.ca/publication/canada_str_rent/wachsmuth_st_hilaire_public_preview.pdf Wachsmuth, D., Bélanger de Blois, M., and St-Hilaire, C. (2021). Short-term rentals in the City of Vancouver: Regulatory Impact Analysis. [Report]. City of Vancouver. 25 AUTHORSHIP AND FUNDING This research was commissioned and funded by the British Columbia Hotel Association. The authors from the Urban Politics and Governance research group are exclusively responsible for all analysis, findings, and conclusions. Photographs are by Adam Jones (pp. 1, 2, 3, 6, 7, 10), Michal Klajban (pp. 4, 16, 23, 24, 26), Gibrankhalilgibran (p. 25) and Clanmother (p. 27), and are licensed under CC BY 2.0. ABOUT UPGO UPGo, the Urban Politics and Governance research group at McGill University, conducts rigorous, public- interest research into pressing urban governance problems—particularly those that exceed or challenge city boundaries. UPGo has published numerous peer-reviewed journal articles and policy reports on short-term rentals in cities in Canada and around the world, including “Short-term rentals in Canada: Uneven growth, uneven impacts” and “The high cost of short-term rentals in New York City”. UPGo is led by Prof. David Wachsmuth, the Canada Research Chair in Urban Governance at McGill University’s School of Urban Planning, and is online at upgo.lab.mcgill.ca. Last update: September 19, 2024 26 27