The debate over Airbnb’s impact on rental housing reveals a generational divide—but not the one you’d expect
Airbnb—does it contribute to the economic well-being of society? Or does it make our cities less livable? A recent Mustel Group poll of Vancouver citizens commissioned by BCBusiness offers one perspective. Does Adam Smith offer another?
Smith—perhaps you’ve heard of him—suggested that the common good was best advanced by a person pursuing only private gain. “He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it,” the Scottish philosopher and economist wrote in his influential 1776 book An Inquiry Into the Nature and Causes of the Wealth of Nations. Smith added that “he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
Smith’s philosophy has shaped the economic world. Arguments rage about his ideas, and the Airbnb issue falls into an intriguing side debate. Never mind the invisible hand—if consumers are told a product or service may have harmful effects to society as a whole, how will they react? Will they make decisions based on a perception of the public good or consider only their own needs?
Take sport utility vehicles. They’ve been shown to be safer than smaller cars in collisions. However, SUVs, particularly earlier designs, have proven more dangerous to other motorists because their greater height and weight make them more likely to crush smaller vehicles’ passenger compartments. So would people forego an SUV out of concern for the safety of their fellow travellers? Or will their own safety take precedence? The continuing popularity of SUVs suggests that in this case, consumers have opted for the latter (while SUVs’ growing bulk points to an arms race of sorts on the public roads).
As for Airbnb, the online accommodation rental service has been advertising lately to tout the benefits it brings to Vancouver. Many of the ads feature property owners who use it to generate income. By doing so, Airbnb suggests, these people enrich us all by boosting tourism and economic activity. Rent your home for your own profit, then watch as that invisible hand spreads the benefits around.
But today the invisible hand has been joined by the nebulous Internet. The popularity of Airbnb has led, some say, to a shortage of long-term rental accommodation. The City of Richmond recently voted to ban short-term rentals, while the City of Vancouver plans to let residents rent out their home for short periods if they have a business licence but to ban short-term rentals in secondary residences or investment properties. By catering to tourists, Airbnb drives up rental prices for locals, critics charge. Does this service benefit a few while denying reasonable accommodation to many?
Thus our Mustel Group poll question: “Which of the following statements comes closest to your own view? Short-term rentals of residential properties should be discouraged to protect the housing supply for local residents. Or: People should be able to rent their properties on a short-term basis regardless of the impact on rental housing supply.”
As they like to say on the Internet, the results may surprise you. Option A—short-term rentals should be restricted for the common good—won out, 56.4 per cent to 43.6 per cent. The surprises were in the breakdown of the totals. Property owners, who might be expected to look out for their own financial interests, were 53.6 per cent in favour of protecting the long-term rental market. And the strongest supporters of a free market with no regard for the needs of local renters? The youngest group in the survey, the 18–34 demographic.
You might have expected the cohort with the greatest number of students and, presumably, the fewest property owners, to be the most militant about protecting the rental market. The reverse proved true, with 53.8 per cent of 18–34s supporting the rights of owners to rent—the only age bracket to offer majority support for Option B.
Do younger people see themselves as future property owners? Or do they identify as consumers, placing more value on the wider choice (and potentially lower prices) of an unregulated sharing economy? Or is the younger generation dominated by believers in unfettered capitalism? Perhaps our next survey should measure the popularity of Ayn Rand broken down by age group. In the meantime, Airbnb might want to crank up its ad buys—most Vancouver-area residents remain unconvinced.