There has been a lot of controversy surrounding short term rentals (STRs), with some claiming that they are ruining neighbourhoods and driving up housing costs. While the evidence can sometimes appear clear-cut and obvious (and, by extension, clickable), the reality is much more complex and nuanced. While it is true that short-term rentals can have some negative impacts, they also have many benefits that should not be overlooked.
The Changing Neighbourhood
One of the main arguments against short term rentals is that they can drive up housing costs in popular tourist destinations. This is because homeowners and landlords may be more likely to list their properties on platforms like Airbnb rather than renting them out long-term to local residents. This can reduce the availability of affordable housing and lead to gentrification in specific neighbourhoods. This is often true, but not the whole story.
In reality, any time a neighbourhood becomes more popular, and in demand, housing prices are likely to go up. This can happen for various reasons, such as an influx of new businesses or an increase in the overall desirability of the area. However, it’s important to note that this is not a problem unique to short-term rentals. Blaming short-term rentals for rising housing costs ignores the bigger picture and fails to address the root causes of the issue.
Another concern is that short term rentals can lead to an increase in noise and other nuisances in residential neighbourhoods. While this is a valid concern, it is not necessarily a given with short term rentals. Many platforms, including Airbnb, have policies to address these issues, such as prohibiting parties and setting maximum occupancy limits. The root of the cause is often how and by whom these rentals are managed. A poorly managed rental or building can be a problem for the community, no matter how long the tenants stay.
You should take it up with The Manager.
Vacation rentals have been around for a while, but sites like Airbnb and VRBO have allowed the market to expand widely by making it incredibly easy for owners to provide their services and for “guests” to find them. Unlike a hotel chain (think “Hilton” or “Holiday Inn”), Airbnb and VRBO don’t have any brand buy-in (something they’re starting to worry about, actually). Those sites offer rental owners a “service” (essentially advertising).
One day we can do a whole article about the situation there, but the important thing to keep in mind is that it’s the rental owners and managers who are deciding how and when your neighbourhoods are being affected.
A poorly managed rental or building can be a problem for the community, no matter how long the tenants stay.
The Case and The Costs for Short Term Rentals
Many assume the decision to offer a rental on a short term or vacation basis is purely about making more money. It’s often not as simple as that. There are benefits to short and long-term contracts; what IS often the case is that the rental owner is trying to determine what’s best for their investment. That could be as easy as “dipping a toe” into being a landlord or even just being able to collect or adjust the rent to cover operating costs or being able to access/use the rental part of the time. Let’s assume for the moment that you don’t care if the landlord gets wealthy, though (because that’s usually where this conversation goes). There is a way for short-term rentals to still exist without disrupting or damaging the rental market.
Local governments can implement regulations to address these concerns, such as setting limits on the number of short-term rentals allowed in a given area or requiring hosts to obtain a permit. This is something that has been getting a lot of buzz in HRM lately.
HRM City Council is Reviewing Short Term Rental regulations
It’s worth mentioning that there is technically already a requirement for short-term rentals in Nova Scotia to register and pay a fee. HRM city council is now looking at how they can better enforce and control when and where rentals are popping up. A lot has been made of the fact that they have deferred their vote so that they can gather more data and information to make an informed decision; this is actually fairly good news, though; anecdotally, it seems clear something that needs to be addressed here, but city council hasn’t actually presented or reviewed substantial data yet; which is kind of what we expect lawmakers to do before voting.
We’ll disclose at this stage that RedE Rent advertises and manages long-term and short-term rentals in HRM. In doing so, we have consulted the same data sources that have been reported as the basis for the City Council discussion. They’re good sources, but they’re not the full picture.
Before HRM looks at “cracking down” on short-term rentals, they also want to weigh the positive impacts of the market. For example, short-term rentals can provide a source of income for homeowners, which can be especially helpful for those who are struggling to make ends meet. This is part of the reason HRM is looking at keeping the door open for rentals in personal residences.
Short-term rentals bring economic benefits to the local community, as visitors who stay in short-term rentals are likely to spend money on food, entertainment, and other local goods and services.
Finally, short-term rentals can provide travellers with a more authentic and immersive travel experience. Rather than staying in a generic hotel, visitors can experience local culture and get a taste of what it’s like to live in a particular neighbourhood or city. This can be especially appealing for travellers who want to avoid touristy areas and explore off the beaten path.
But you likely already knew all that, right?
You’re not out to shut down the retired empty nesters who just want to make some extra money so they can visit their grandkids.
You’re upset with the guy who is turning an entire apartment building into a “hotel” or the big house in the suburbs that has crazy parties every weekend.
You want the housing problem to be resolved; you want to understand why people with full-time jobs are homeless.
We agree. We want all that too. That’s why we wanted to write this article.
Short term rentals are not inherently evil.
While they can have some negative impacts, they also have many benefits and should be viewed as one part of a larger and more complex housing market. A bad landlord or manager can create a real issue, and 5 of them can create 5 real issues (at least). The expansion of the short-term rental market has created many more landlords and managers than there ever were, and we’re quickly discovering not all of them are created equal.
Rather than demonizing short-term rentals, we should look at the root causes of rising housing costs and work to address any adverse impacts through targeted regulations and policies. What those regulations and policies should be are perhaps topics for another article. For now, we think the items the city council is looking at are the right ones, and we hope they will make a positive and informed decision.
The short-term rental market is slowing. Likely not forever, but as the economy continues to face challenges, we may see the long-term rental market bounce back slightly and ease the shortages we’ve been experiencing. Many “evil” or “bad” landlords will be the first ones out of the market. Short-term rentals are really easy to be bad at and even easier to think you’re good at. Our prediction is that when the money runs out for short-term rentals, so will the short-term interest of “bad operators.”