Collingwood is a town with a population of almost 21,000 residents who live here year-round. But, we also have a very thriving visiting population of those who come here to experience all that Collingwood and the Blue Mountains have to offer. While those visitors are here, they inevitably need somewhere to stay. While there are a number of hotels and other types of rental accommodations, short-term accommodations can be had by using a service such as Airbnb, an online marketplace that advertises vacation rentals in homes and apartments. The owner of the home or apartment sets up the accommodations and uses Airbnb to coordinate bookings. Sounds great, doesn’t it?
Airbnb started off as a way that owners could rent out a room or their entire dwelling to those looking for affordable short-term stays, but it has evolved to a giant marketplace where people are purchasing dwellings with the purpose of renting them on an Airbnb service. This is technically a direct violation of the service and is causing larger problems within the real estate market.
Because of the sheer number of properties being used for short-term rental purposes, affordable long-term rental housing is being eaten up. Vacancy rates are dropping while rents are increasing. The short-term housing market is much more lucrative for property owners, so there are even stories of people being evicted and being replaced by short-term renters through these types of services.
Implications for Collingwood
In Collingwood, where tourism is a large part of the framework of the town, this could amount to a significant issue, as it is in other tourism-heavy cities in Canada. Airbnb has over 300 listings for the town of Collingwood and the Blue Mountains, with everything from entire cottages to private rooms. Located throughout the town, including in typically suburban neighbourhoods, it is easy to see that short-term rentals could affect the long-term rental market in Collingwood.
Even in 2014, vacancy rates were incredibly low and were even called disastrous, with rents rising along with the decreasing rates. Airbnb’s impact could very well decrease the number of affordable rental units for residents in Collingwood, while supplying them with raised rents.
Another issue that should be looked at is the fact that there is already fewer and fewer homes for sale all over Canada and by having investors purchase properties for investment purposes, it can encourage the shut-out of other buyers. With increased competition for a limited amount of homes, buyers will have a harder and harder time finding an affordable home to buy.
Done correctly, Airbnb can be a viable option for those looking to help with mortgage costs and daily living expenses, when they rent out a vacant room in their home or their house while they are away. Considering the number of first-time homebuyers in the market and the increase in house prices, new buyers could supplement their incomes, without affecting the long-term rental market.