CHANGING RENTAL HOUSING DYNAMICS & THE PANDEMIC
the demographic and economic contexts). However, a growing stock of rental homes has played a role, and this will need to be a more permanent feature of the region’s rental market in the coming years if greater balance in the market is seen as being beneficial. THE SHORT-TERM/LONG-TERM RENTAL DYNAMIC International travel to Canada came to an abrupt halt in the early days of the pandemic, while guidelines from provincial governments discouraged domestic travel— all with the goal of limiting the spread of Covid-19. With British Columbia accepting 6.2 million international visitors in 2019, it was clear early on that the significant decrease in travellers to the province, and to Metro Vancouver more specifically, would have repercussions across a variety of sectors. By the end of 2020, British Columbia had a total of 850,000 international visitors to the province—a decrease of 86% from 2019. One such repercussion of diminished travel was the subsequent shortfall in demand for short-term rentals. The short-term rental market, generally speaking, consists of either an entire private residence or a room within said residence that is rented for fewer than 30 days in a row. In noting this decreased demand, speculation that short-term rentals were going to flood the long-term rental market quickly dominated headlines. In looking specifically at the trend line of available Airbnb listings in the city of Vancouver over the past two-and-a-half years, a notable drop was seen in September of 2018, representing the removal of close to 2,500 unlicensed listings in the city from Airbnb’s website (see Figure 4). Since that policy-induced decline of 38%, listings climbed by an average of 3.6% monthly, eventually reaching over 6,200 by August 2019 (a level not seen since before that notable decline). From
JOBS LOST AND LOW INTEREST RATES In addition to slowing migration into Canada, the effects of the pandemic were manifested in employment and interest rates in ways that are noteworthy to rental housing. First, due to the restrictions being placed on both the retail and the hospitality sectors of our provincial economy as a means of limiting the spread of Covid-19, a specific profile of worker was impacted: the young, part-time employee. For example, while part-time jobs accounted for only 18% of all jobs in British Columbia before the pandemic, 45% of job losses during March and April 2020 were in part-time positions. Furthermore, the under-30 population—which accounted for 22% of all employed persons in BC before the pandemic—represented 46% of jobs losses. This in turn likely impacted the financial ability of many of these affected individuals to remain in their own rented home as they did before the pandemic, despite government fiscal supports for individuals and restrictions on landlord evictions. Additionally, the low interest rate environment that was created in Canada by the pandemic, largely through the efforts of the Bank of Canada to support economic activity, also provided an opportunity for some people to pursue home ownership who might have otherwise rented (or who would have continued to rent). SUPPLY For decades, the stock of purpose-built rental homes in Metro Vancouver was stagnant: compared to the 110,778 purpose-built rental homes in the region in 1990, for example, there were actually fewer as recently as 2019 (when there were 110,753). Having noted this, substantial new supply has been coming to market in recent years: between 2014 and 2019, the number of new purpose-built rental apartment completions rose each year, from 2,501 in 2014 to a record 5,590 in 2019. This high-water mark only slightly exceeded the 5,540 homes completed in 2018 and the 5,250 completed in 2020. In fact, the total number of purpose-built apartment completions between 2014 and 2020 (29,075 over seven years) exceeded the cumulative total from 1990 to 2013 (27,221 over 24 years). Given that the elevated additions to supply did not begin to materialize in 2020, but rather years earlier, expanded rental supply can clearly not be viewed as the sole source of the softening of Metro Vancouver’s rental market over the past year (especially considering
FIGURE 4: VANCOUVER (CY) AIRBNB LISTINGS
8,000
7,000
6,000
5,000
4,000
3,000
2,500+ unlicensed listings removed
2,000
1,000
0
APR I L 202 1 — P A G E 8
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