The number of landowners in the Tri-Cities using their properties for short-term rentals spiked 45 percent in one year.
In August, sites like Airbnb and Vrbo posted 807 active listings for Coquitlam, Port Coquitlam, Port Moody, according to data provided by AirDNA, a market research provider.
That’s up from 446 total listings in August 2022. Despite the number of active listings being halved during the COVID-19 pandemic, overall rental growth still jumped 35 percent since 2018.
The rate of increase appears even more significant in Port Moody, where the number of short-term rentals jumped 60 percent in a year (162 listings last August), and 84 percent from 2018.
Rapid growth of short-term rental accommodations in smaller markets like the Tri-Cities was surprising to Tsur Somerville, professor at UBC’s Sauder School of Business.
“I certainly wouldn’t want what few units (are available) used for short-term rental instead of housing people, when the vacancy rate is really low,” Somerville said. “That is certainly something I would be concerned about.”
The Tri-Cities have a vacancy rate of 0.7 percent, according to 2022 data from the Canadian Mortgage and Housing Corporation (CMHC).
Community groups and housing advocates have increasingly been raising concerns regarding the impact of short-term rentals on local affordability.
Critics argue that short-term rentals are sucking supply out of the long-term rental market, driving rent prices upwards in cities already suffering from low vacancy rates.
A 2020 analysis by CMHC found that 31,000 Canadian long-term rental properties have been converted to short-term rentals, a number comparable to all vacant and available rental housing in some locations.
B.C. Premier David Eby has signalled his government will try and further regulate short-term rentals.
After announcing his cabinet choices in December, 2022, Eby’s mandate letter to the new minister of housing, Ravi Kahlon, included introducing legislation that would create tools for local governments to better regulate short-term rentals.
Municipalities are currently responsible for most short-term rental regulations through bylaw enforcement and the issuing of business licences.
A common complaint of the current regulatory framework, however, is that municipalities do not have the resources for practically enforcing their bylaws regarding short-term rentals.
And while some cities have bylaws restricting short-term rentals, others do not.
In Coquitlam and Port Coquitlam, short-term rental operations are limited to a portion of an existing residential unit; the rental must be operated by someone who is a permanent resident and entire dwelling units cannot be rented out.
Port Moody, on the other hand, does not regulate the term ‘short-term rental’ and has nothing in place that would restrict whole apartment or home rentals.
Coquitlam business licences for short-term rental accommodations have grown from 37 in 2018 to 56 in 2023, according to the city.
The number of active short-term rental listings has grown from 376 to 530 between August 2018 and 2023, according to AirDNA, with 63 percent of those listings allowing customers to rent out an entire home.
Aaron Hilgerdenaar, manager of bylaw enforcement in Coquitlam, acknowledged there may be instances of businesses operating without a licence, but noted they could be subject to fines.
While he couldn’t give exact numbers on the number of enforcement actions, Hilgerdenaar said the city has “issued multiple fines and conducted multiple complaint based inspections.”
Port Coquitlam has seen the number of active short-term rentals increase from 72 to 114 between August 2018 and 2023, according to AirDNA, with 68 percent renting out entire homes.
In Port Moody, active short-term rentals have jumped from 88 to 162 between August 2018 and 2023, according to AirDNA, with 88 percent renting out entire homes.
Madeleine Parkin, a public relations specialist with AirDNA, said when COVID restrictions first came into force in 2020, short-term rental supply shifted away from larger cities like Vancouver to more rural destinations like the Tri-Cities.
“For this reason, supply has grown quite significantly over the past five years, though the nights booked (demand) has also increased dramatically,” Parkin said.
She added that supply has actually outpaced demand, which has caused the occupancy levels – the number of nights a unit is booked versus available – to drop. However, occupancy level remain significantly higher than pre-pandemic years.
Over the past 12 months, occupancy levels were 59 percent in Port Moody, 65 percent in Coquitlam, and 72 percent in Port Coquitlam.
Parkin also noted that short-term rentals are much more flexible than hotels. Property managers can take their properties offline, and switch between short-term and long-term rentals depending on whatever is more profitable.
The data provided by AirDNA shows an increase in the number of listings during the summer months in the Tri-Cities.
In 2023, only 21 percent of the active listings in Coquitlam are available for rent “full time” (over 181 days in a year), compared to 32 percent of Port Moody, and 19 percent in Port Coquitlam.
Somerville said that, in general, most of the studies done on the effects of short-term rental growth on rental markets tend to focus on larger cities where there is more pressure.
“It can mean different things in different places,” he said. “When you get out in the suburbs, where you have less sort of hotel choice – what exactly is Airbnb capturing out there?
“It’s not some sort of unambiguous negative thing for a local economy . . . because there are a lot of ways people find it very helpful or useful.”
However, he said he would be less concerned in a local market where the vacancy was 5 percent, as opposed to less than 1 percent.
Money and flexibility are the main incentives for landowners to switch a rental from the long-term to short-term market, according to Somerville.
Depending on location, rates for Airbnb rentals can be very close to hotel rates, and units are not bound by rent control.
For instance, as of August, one-bedroom apartments are now renting for over $3,000, but an Airbnb making $200 a night would only need to be booked for 15 days to draw the same amount of revenue.
Last year, the average daily rate for short-term rentals was $150 in Coquitlam, $263 in Port Moody and $137 in Port Coquitlam.
Median annual revenue for short-term rentals Coquitlam, Port Moody and Port Coquitlam all exceed the average long-term rental prices for one-bedroom apartments.
Annual revenues for both Coquitlam and Port Coquitlam short-term rentals hover around $36,000, while the median revenue for Port Moody was over $57,000, or $4,750 a month.
Patrick Penner, Local Journalism Initiative Reporter, Tri-Cities Dispatch