There is a commonly held view that short-term rentals (such as the ones you might find on platforms like Airbnb) are bad for housing affordability because they take long-term rentals out of the market and they help to drive up property values. And there's evidence for this. A study published in Harvard Business Review found that home-sharing alone might be responsible for about 20% of the average annual rent increases across the US.
Findings like these have encouraged municipalities around the world to put restrictions in place for STRs. But like most policy issues, there are nuances. And the thoughtful answers are rarely as obvious as they may initially seem. This has been part of my complaint around inclusionary zoning. It sounds good when politicians say it: let's just get developers to build us free affordable housing. But again, there are nuances to consider.
Short-term rentals are similar. A recent follow-up study that was again published in Harvard Business Review has actually uncovered some interesting longer-term benefits to STRs.
Using residential permit data, Airbnb listings, and STR policies across the US, the team found that when you look over a longer time horizon, Airbnb listings actually tend to increase the supply of residential housing. On average, a 1% increase in Airbnb listings led to a 0.769% increase in permit applications. Supply is of course good for a whole host of reasons, one of which is boosting the local tax base.
Conversely, they found that restricting STRs tended to reduce the supply of new housing and renovations. After new regulations were put in place affecting STRs, Airbnb listings fell on average by about 21% and residential permits fell by 10%.
Restrictions also seem to have a direct impact on the construction of things like accessory dwelling units (laneway and garden suites for us here in Toronto). When analyzing data in and around the borders between jurisdictions in Los Angeles County, the researchers found that areas without STR regulations saw 17% more ADU permit applications compared to the areas that had restrictions.
For the 15 US cities that the team studied, they conservatively estimated that STR restrictions reduced property values by about $2.8 billion and impacted tax revenues by about $40 million per year. Some cities, like Chicago, have also found success using STRs as an economic development strategy in distressed neighborhoods, which would further bolster the tax base.
All of these findings suggest that a more nuanced approach to STR policies is probably merited.
Photo by Andrea Davis on Unsplash
As many of you know, Toronto currently allows "laneway suites" across the entire city on an as-of-right basis. What this means is that no variances or special planning permissions are generally required to build. Assuming you meet the by-law, you can go straight to a building permit.
This is how Mackay Laneway House was built and, though it required an extra layer of approvals from the forestry department because of a large on-site tree, getting a building permit was relatively straight forward. I think it took between 6-8 weeks from initial submission.
As part of the City's efforts to increase overall housing supply, another form of accessory dwelling unit is currently being studied: garden suites. Public consultations are now underway and, from what I have heard, the hope is to make these similarly as-of-right before the end of the year. Hopefully it'll be earlier.
I think this will be a positive thing for Toronto and so I would encourage all of you to complete the online garden suite survey that the City has open until June 1, 2021. Public consultation is an important part of the planning process and too often it is the voices of a few representing the views of many.
So if you've got 5 minutes, now is your chance to speak up.
"Unexpected approaches for the future of our urban spaces." Publisher Gestalten has a new book out that you can pre-order called, Vertical Living: Compact Architecture for Urban Spaces. The book is not about tall buildings, despite what the title might suggest, but rather about "impossibly slender homes" in narrow and tight urban spaces. As many of you know, I have long been a fan of compact and creative homes. One, they force creativity. It's like designing a boat (not that I have done that before). Every inch matters. And two, it is about seeing opportunity where others don't.
There is a commonly held view that short-term rentals (such as the ones you might find on platforms like Airbnb) are bad for housing affordability because they take long-term rentals out of the market and they help to drive up property values. And there's evidence for this. A study published in Harvard Business Review found that home-sharing alone might be responsible for about 20% of the average annual rent increases across the US.
Findings like these have encouraged municipalities around the world to put restrictions in place for STRs. But like most policy issues, there are nuances. And the thoughtful answers are rarely as obvious as they may initially seem. This has been part of my complaint around inclusionary zoning. It sounds good when politicians say it: let's just get developers to build us free affordable housing. But again, there are nuances to consider.
Short-term rentals are similar. A recent follow-up study that was again published in Harvard Business Review has actually uncovered some interesting longer-term benefits to STRs.
Using residential permit data, Airbnb listings, and STR policies across the US, the team found that when you look over a longer time horizon, Airbnb listings actually tend to increase the supply of residential housing. On average, a 1% increase in Airbnb listings led to a 0.769% increase in permit applications. Supply is of course good for a whole host of reasons, one of which is boosting the local tax base.
Conversely, they found that restricting STRs tended to reduce the supply of new housing and renovations. After new regulations were put in place affecting STRs, Airbnb listings fell on average by about 21% and residential permits fell by 10%.
Restrictions also seem to have a direct impact on the construction of things like accessory dwelling units (laneway and garden suites for us here in Toronto). When analyzing data in and around the borders between jurisdictions in Los Angeles County, the researchers found that areas without STR regulations saw 17% more ADU permit applications compared to the areas that had restrictions.
For the 15 US cities that the team studied, they conservatively estimated that STR restrictions reduced property values by about $2.8 billion and impacted tax revenues by about $40 million per year. Some cities, like Chicago, have also found success using STRs as an economic development strategy in distressed neighborhoods, which would further bolster the tax base.
All of these findings suggest that a more nuanced approach to STR policies is probably merited.
Photo by Andrea Davis on Unsplash
As many of you know, Toronto currently allows "laneway suites" across the entire city on an as-of-right basis. What this means is that no variances or special planning permissions are generally required to build. Assuming you meet the by-law, you can go straight to a building permit.
This is how Mackay Laneway House was built and, though it required an extra layer of approvals from the forestry department because of a large on-site tree, getting a building permit was relatively straight forward. I think it took between 6-8 weeks from initial submission.
As part of the City's efforts to increase overall housing supply, another form of accessory dwelling unit is currently being studied: garden suites. Public consultations are now underway and, from what I have heard, the hope is to make these similarly as-of-right before the end of the year. Hopefully it'll be earlier.
I think this will be a positive thing for Toronto and so I would encourage all of you to complete the online garden suite survey that the City has open until June 1, 2021. Public consultation is an important part of the planning process and too often it is the voices of a few representing the views of many.
So if you've got 5 minutes, now is your chance to speak up.
"Unexpected approaches for the future of our urban spaces." Publisher Gestalten has a new book out that you can pre-order called, Vertical Living: Compact Architecture for Urban Spaces. The book is not about tall buildings, despite what the title might suggest, but rather about "impossibly slender homes" in narrow and tight urban spaces. As many of you know, I have long been a fan of compact and creative homes. One, they force creativity. It's like designing a boat (not that I have done that before). Every inch matters. And two, it is about seeing opportunity where others don't.
Sometimes we miss these opportunities because of cultural biases. We believe that a home should look and behave a certain way. But these viewpoints are not necessarily universal. They vary across cities and they can even vary within cities. As Toronto and many other cities around the world try and figure out how to deliver the so-called "missing middle," we are going to need to open ourselves up to some of what's in this book -- namely the unexpected. New housing solutions that don't fit within certain neat and tidy definitions.
We've done this before with laneway suites. Formerly an illegal housing type, Toronto is now in the midst of what feels like a laneway housing boom. I don't know exactly how many are under construction or have been completed under the city's new policies, but I would wager that the uptake has been strong. And over time, this new housing typology is going to reshape how we think about our laneways. They will evolve along with the new uses that are now beginning to flank them. The unexpected will become the expected.
Shall we try this again?
Image: Gestalten
Sometimes we miss these opportunities because of cultural biases. We believe that a home should look and behave a certain way. But these viewpoints are not necessarily universal. They vary across cities and they can even vary within cities. As Toronto and many other cities around the world try and figure out how to deliver the so-called "missing middle," we are going to need to open ourselves up to some of what's in this book -- namely the unexpected. New housing solutions that don't fit within certain neat and tidy definitions.
We've done this before with laneway suites. Formerly an illegal housing type, Toronto is now in the midst of what feels like a laneway housing boom. I don't know exactly how many are under construction or have been completed under the city's new policies, but I would wager that the uptake has been strong. And over time, this new housing typology is going to reshape how we think about our laneways. They will evolve along with the new uses that are now beginning to flank them. The unexpected will become the expected.
Shall we try this again?
Image: Gestalten
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