Investors weigh in on potential short-term rental regulation.
As a number of cities consider regulating short-term rentals, such as Airbnb, investors are keeping a keen eye.
“Investors would welcome options and Airbnb is a valuable tool for investors and, quite frankly, it is the only option in certain markets to create value from the property,” Peter Cheung, a BC-based investor, told Canadian Real Estate Wealth. “And if being regulated, we would have to examine the benefits and the impacts. I (hope the government) would be very careful of regulating these tools because they are very valuable to investors.”
Richmond, BC was the latest city to consider regulating its short-term rental market.
Mayor Malcolm Brodie told CBC News there are over 1,500 short-term rentals in the city and that there have been 100 complaints from local pertaining to them. An increase in traffic as well as potential degradation neighbourhoods are major concerns.
“We can either ignore the problem, attempt to prohibit it, which would be really difficult, or we could do what we did with secondary suites,” he said.
However, mere days after rumours of regulation surfaced, Richmond voted to outright ban short-term rentals.
“We are aware of the negative impacts on our community,” Mayor Brodie told the Globe and Mail late Tuesday. “We are dedicated to take actions to persuade the residents that we want to solve the problem.”
Toronto is also considering regulating short-term rentals. According to a report released in late 2016, Airbnb rentals in Toronto doubled from 2014 to 2015.
Proposals for regulation in Richmond have included only allowing the short-term rentals of primary residences. Such a stipulation would impact investors.
Of course, not all investors choose the short-term lease approach.
“For me, it’s kind of irrelevant. Although we do have a short-term rental it’s more of a monthly rental and I would never do a daily rental,” Alberta-based investor Sherilynn Milsom told CREW. “I realize it will effect some people who will use it as an income boost to get a better cash-flow, but it’s not part of my business model.”