Canada Is Looking to Airbnb to Help Fix Its Housing Crisis
This is a terrible idea.
Canada's major cities are in the grips of a housing crisis. Rents are skyrocketing and home prices have doubled in Toronto and Vancouver since 2010. Now, in an effort to alleviate some of the pressure, Canada's federal housing authority is looking to Silicon Valley.
The Canada Mortgage and Housing Corporation (CMHC) is set to unveil Canada's first real national housing strategy later this fall. The agency recently approached Airbnb, the Canadian Press reported on Tuesday, in an attempt to forge a partnership that would see short-term rental company Airbnb allow for long-term rentals to locals on its platform. A CMHC spokesperson confirmed to Motherboard that CEO Evan Siddall "had a high level conversation with executives at Airbnb," but said the agency is not partnering with the company for the time being. When asked if talks were scheduled to continue, the spokesperson declined to comment.
If this goes ahead, it would be in no uncertain terms a terrible idea.
There are a few reasons why making a private company like Airbnb an integral part of your federal housing plan is the wrong way to go. But let's start with the fact that Airbnb has actually contributed to the current housing crisis. A recent study from researchers at McGill University looked at Airbnb data from 2014 to 2017, and concluded that the service has taken 13,700 rental properties off the market in Toronto, Montreal, and Vancouver. That number, the researchers write, is comparable to the number of homes taken off the market by speculative buyers snapping up apartments and letting them sit vacant. Airbnb has disputed this study as the City of Toronto continues to eye taxes and other regulations for the service.
"Airbnb's impact on the housing market only goes one way: It reduces the number of available rentals and increases the price," said lead author David Wachsmuth, the Canada Research Chair in Urban Governance at McGill, over the phone.
Talking Airbnb into allowing for long-term rentals to locals on its platform might bring some of those lost properties back into the market, but it's likely that a government endorsement of Airbnb would encourage more of the same kind of rentals that forced us here in the first place. And that's not even mentioning the likelihood of a sweetheart deal for Airbnb in return for pitching in—experts familiar with how Silicon Valley operates have noted that Amazon, for example, is likely to get a massive suite of subsidies and perks from whichever new municipality it sets up shop in.
According to Wachsmuth, the solution to Canada's housing crisis now is the same it's ever been: Build government-run social housing, where people pay rent that's based on their income. Canada funded the development of social housing starting in the 1950s, which peaked in the 70s. The country continued to invest in social housing to a lesser degree until 1993, when the federal government washed their hands of the issue of housing almost entirely. Since then, it's been up to the provinces and municipalities to deal with the issue of affordable housing.
In Toronto, Canada's largest city, that means giving private developers immense tax breaks and waiving various fees in exchange for capping a small portion of units at market rates—nevermind that the whole problem is that the people who most direly need affordable housing can't pay the market rate anyway.
"We didn't build social housing in this country for 40 years, and that's why we have a housing crisis now," Wachsmuth said.
The details of the national housing strategy coming in the fall are somewhat of a mystery for now, although Minister of Families, Children and Social Development Jean-Yves Duclos wrote in an editorial for the Toronto Star that the plan would include building affordable housing. However, that doesn't necessarily suggest that rolling out social housing for the lowest-income group of Canadians is on the agenda.
Regardless, what we sure as hell don't need is a company like Airbnb profiting even more off of a problem it helped to create.
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