Community Impacts of B&B Uses

There is a very real and drastic housing supply shortage across the District of Ucluelet. According to the 2016 Census, 30% of households in Ucluelet are renter households, much higher than what is normally observed in smaller communities in part due to the number of younger workers employed in the tourism and hospitality sectors. The Ucluelet Housing Needs Report findings showed that the reduced availability of long-term rentals is impacting the social, economic, and cultural fabric of the community for many renters. Forty-nine percent (49%) of renter respondents who responded to the community survey indicated that their current housing costs were unaffordable to them. Tourism and hospitality sector employees, especially those in seasonal positions, were identified as a subsection of residents facing disproportionate housing challenges. The expansion of short term rentals in residential areas will not only require more of these types of workers but it would also displace their available housing. Many employers attributed staff shortages to the lack of affordable rental supply and 86% of respondents to the tourism and hospitality survey conducted as part of this study agreed or strongly agreed that housing was a barrier to living permanently on the West Coast.

While individual hosts and guests may benefit economically, the use of short-term rentals can have significant consequences for the surrounding community. Studies have found that growth in short-term rental numbers causes fewer affordable housing options, higher average rents, and erodes neighborhood social capital. Research also shows that that many of the benefits of short-term rental accommodations flow to wealthier hosts and guests, keeping less privileged members of communities out of these income and equity streams. While traditional residential neighbourhoods feature mutually invested neighbours, having growing numbers of tourist accommodations in these neighbourhoods means there are tourists with needs that can conflict with those of permanent residents. While most Ucluelet residents bear the costs of increasing tourism (including strain on local resources, higher traffic, pollution, environmental degradation, etc.), residents who do not have access to stable housing or do not own property experience the harms of increasing STRs without the associated benefits.

“There needs to be a cap on airbnbs. Ukee has a 0% rental market and it makes it impossible for families to live & make a living here.”
- Ucluelet Housing Needs Report Respondent

“Several have been forced to move (or leave town) when a property sold or was renovated and turned into an airbnb or short term rental. It affects your sense of community when houses in your neighbourhood are not lived in by residents, or sit empty for a large part of the year.”
- Ucluelet Housing Needs Report Respondent

The Ucluelet Housing Needs Report found that renter households earn significantly less income than owner households in this community but pay similar monthly costs for housing. Within very tight rental markets like Ucluelet’s, the diversion of long-term rental stock into short-term B&B rentals is making the affordability challenge worse. Ucluelet’s most vulnerable community members, including renters, low-income residents, seniors, and people on disability assistance and fixed incomes are most affected by the prioritization of tourist housing options. The proliferation of B&B uses at the expense of secondary suites increases hardships experienced by residents who already face significant inequality.

Homes vs. Tourist Accommodations

According to AirDNA’s data, short-term rental units in Ucluelet rent for an average daily rate of $276. Given that the current bylaw allows up to three rooms to have B&B uses in a single-family dwelling, this represents a significant financial return, prompting an increasing number of new residential construction projects to be purpose-built with three B&B units. While the B&B use was traditionally meant to be secondary to the main purpose of residential dwellings, namely, to provide housing for Ucluelet’s residents and families, there has been an increase in purchasing of residential properties and lots for the express purpose of operating commercial-style tourist accommodations. Increasingly, the lucrative potential of these uses has resulted in buyers, including numbered companies and commercial Real Estate Investment Trusts (REITs), who are incentivized by the commercial potential of properties as opposed to traditional buyers looking for a home to live and work in Ucluelet. This in turn has pushed up the price of houses in Ucluelet, which reflects the potential return from short-term rentals. The Ucluelet Housing Needs Report found that these wealthy purchasers are contributing to rising costs throughout the West Coast, but most dramatically in Tofino and Ucluelet.

“I am an RN at the hospital, and I have lived in Ukee for 17 years. I have always thought I’d live here and buy property. But the way the housing is I fear I’ll have to leave town to buy a property.”
- Ucluelet Housing Needs Report Respondent

“I will probably have to leave the community. I have a well-paying job, but due to expenses rent, student loans, gas, groceries etc…. How can a single professional ever afford to live here if they did not come from money, or didn’t have debts prior to being here like student loans? I can barely afford rent, let alone a mortgage… I can barely put money away every month because I’m too worried about making ends meet.”
- Ucluelet Housing Needs Report Respondent

The Ucluelet Housing Needs Report found that accessing housing is becoming more difficult for everyone, not just those looking for rental units. Increasingly, community members with well-paying full time jobs are unable to afford the elevated cost of housing or are taking on debt they may be uncomfortable with. Adjusted for inflation, median dwelling prices in Ucluelet are up 101% since 2011. The median single-detached home sold for nearly $700,000 in Ucluelet in 2020. A comparison of incomes and dwellings for sale in 2015 and 2020 shows how the cost of housing has dramatically exceeded growth of incomes. In 2015, a first-time home buyer household with an income of $70,000 could likely afford the estimated mortgage of 57% of homes for sale across the West Coast. The same income could only afford 26% of dwellings sold in 2020. A household with an income of $100,000 could afford 68% of dwellings in 2015 and only 39% of dwellings in 2020.

Many respondents to the Ucluelet Housing Needs Report were resigned to leaving Ucluelet in order to find stable housing or enter the ownership market. Some fill essential positions, and others had hoped to start and grow their families in the District. The rising cost of ownership and challenging rental market, driven in part by the commercialization of residential housing, is indisputably changing who gets to live in Ucluelet and who doesn’t.

Hotels and Motels vs. AirBnB

Over the past decade, there has been an exponential boom in online short-term rental (STR) platforms like Airbnb. Ucluelet has seen an explosion of STR’s in our residential neighbourhoods. Uncontrolled, we could see the equivalent of another eight Blackrock Hotels develop in Ucluelet’s existing residential properties, representing about a thousand units and thousands of additional tourists. There is a great deal of research available on the impacts of Airbnb expansion on long-term housing availability, housing costs, and amount of non-resident property owners. One area which doesn’t receive the same research attention is the impact of increasing Airbnb’s on local job markets, particularly traditional tourist accommodation jobs, such as hotels.

Studies show that expansion of Airbnb and other hyper lean short-term rental platforms directly results in reduced revenue share for hotels and traditional tourist accommodations. This shift can negatively impact employment since some of the labour of maintaining short-term rentals is done by property owners or outsourced to a third-party. Traditional hotels are a more labour-intensive source of employment than Airbnb, and often include management positions, front desk, housekeeping, room attendants, laundry, financial services, guest services, food services, sales and marketing, maintenance and operations, security, and housekeeping. Jobs associated with Airbnb’s and other short-term vacation rentals require very few employees to function, so as these accommodations expand, they can result in an overall loss of employment positions.

Hotel workers have access to labour rights such as statutory holidays, annual leave, medical coverage, and sick leave. Airbnb hosts, by comparison, are not employees of the company but are usually classified as self-employed and may outsource hosting or cleaning requirements, which means platforms like Airbnb can operate by collecting fees on their services while not offering hosts and associated workers the labour protections offered by an employee status. Because of the informal nature of a lot of short-term vacation rental platforms, it is hard to collect data to accurately compare job creation for traditional tourist accommodation and platforms like Airbnb. The research that has been done shows that hotels generate significantly more employment positions than Airbnb’s. In Canada, the hotel sector supports a much higher number of full-time equivalent jobs.

Airbnb and other short-term rental platforms can be a beneficial and flexible way for property owners to generate increased revenue and provide tourist accommodations. These hyper lean platforms create savings by outsourcing tradition work like advertising and booking management plus they allow for the easy remote operation of tourist accommodations so that running a B&B from outside the community is easy and hard to police. These easy and outsourced operation models may benefit individual property owners but can have a devastating long term effect to the sustainability and livability of the community. Research shows that those benefitting most are disproportionately wealthy households, with even higher benefit shares going to non-resident and commercial owners. The loss of more secure, traditional tourist accommodation jobs as hyper lean accommodation platforms expand can be a difficult scenario for communities to navigate to ensure sustainable, long-term labour markets.

Sources & Further Reading

Rivens, J. (2019). The economic costs and benefits of Airbnb. Economic Policy Institute. Available at https://www.epi.org/publication/the-economic-costs-and-benefits-of-airbnb-no-reason-for-local-policymakers-to-let-airbnb-bypass-tax-or-regulatory-obligations/.

Lee, M. (2016). Getting Serious About Affordable Housing: Towards a Plan for Metro Vancouver. Canadian Centre for Policy Alternatives. Available at https://policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2016/05/CCPA-BC-Affordable-Housing.pdf.

Gold, A. E. (2019). Community consequences of Airbnb. Wash. L. Rev., 94, 1577. Available at https://digitalcommons.law.uw.edu/cgi/viewcontent.cgi?article=5086&context=wlr.

Barron, K., Kung, E., & Proserpio, D. (2021). The effect of home-sharing on house prices and rents: Evidence from Airbnb. Marketing Science, 40(1), 23-47. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3006832.

Wachsmuth, D. (2021). Short-term rentals in Canada: The first comprehensive overview. Canadian Journal of Urban Research (30). Available at http://upgo.lab.mcgill.ca/publication/short-term-rentals-in-canada/.

Shirley Nieuwland & Rianne van Melik (2020). Regulating Airbnb: how cities deal with perceived negative externalities of short-term rentals, Current Issues in Tourism, 23:7, 811-825, https://www.tandfonline.com/doi/full/10.1080/13683500.2018.1504899.

Hohol, F. & Godfrey, R (2017). An Overview of AirBnb and the hotel sector in Canada: A focus on hosts with multiple units. CBRE Limited Valuation & Advisory Services.  Available at http://new.hotelassociation.ca/wp-content/uploads/2018/06/Full-Report.pdf.

Fang, Bin & Ye, Qiang & Law, Rob (2016). "Effect of sharing economy on tourism industry employment," Annals of Tourism Research, Elsevier, vol. 57(C), pages 264-267. https://www.cabdirect.org/cabdirect/abstract/20163128328.

Zervas, G., Proserpio, D., & Byers, J. W. (2017). The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of marketing research, 54(5), 687-705. https://people.bu.edu/zg/publications/airbnb.pdf.

Dogru, T., Mody, M., & Suess, C. (2019). Adding evidence to the debate: Quantifying Airbnb's disruptive impact on ten key hotel markets. Tourism Management, 72, 27-38. https://open.bu.edu/handle/2144/40257.

Tremblay-Huet, S. (2018). Making Sense of the Public Discourse on Airbnb and Labour: What about Labour Rights? In D. McKee, F. Makela, & T. Scassa (Eds.), Law and the “Sharing Economy”: Regulating Online Market Platforms (pp. 393–420). University of Ottawa Press. https://doi.org/10.2307/j.ctv5vdczv.16

Henderson, M. (2020). Short-term rentals, long term consequences: regulation and enforcement of vacation rentals in small Canadian communities. Ryerson University. Available at https://rshare.library.ryerson.ca/articles/thesis/Short-term_rentals_long_term_consequences_regulation_and_enforcement_of_vacation_rentals_in_small_Canadian_communities/17326163/1/files/31993349.pdf