Airbnbs are not the cause of rent increases, according to a CBoC study

Less than one percentage point of rent increases can be attributed to Airbnbs, confirming their negligible influence.

01/08/2024 - The Conference Board of Canada (CBoC) recently published a study titled "Airbnb Activity and Rental Markets in Canada: A Technical Examination". This 27-page report examines the relationship between Airbnb activity and rental prices in various Canadian cities, revealing that Airbnbs are not the cause of rent increases in Canada.

Among the key findings, the study indicates that although there is some correlation between Airbnb activity and rents in certain localities, this does not imply that Airbnb activity is causing rent increases. The CBoC tested the causal link between Airbnb activity and rent increases from 2016 to 2022 across 330 neighborhoods in 19 Canadian cities. The results show that less than one percentage point of the 30% rent increase observed can be attributed to the growing Airbnb activity.

The lack of significant impact can be explained by the fact that the share of dwellings used for Airbnb activity is very small in most neighborhoods, averaging less than 0.5% of housing. Even with multiple data combinations, no significant causal effect was found.

Exception in Quebec

When the effect of Airbnb is analyzed by province, a small positive relationship is found only in Quebec, where a one percentage point increase in the share of high-use Airbnbs relative to total households increases rents by approximately 0.8%. The CBoC also notes that policies implemented by cities and provinces to regulate short-term rentals have significantly reduced Airbnb activity. However, there is no evidence that these policies have resulted in lower rents.

For a more detailed analysis, the full study is available for free on the website of The Conference Board of Canada. Read the full document here.