In defense of the sharing economy and in particular home-sharing platforms

[Feature image: Airbnb founder Joe Gebbia (right)]

In June 2019, I wrote to city consultant Brian Bourns who had held a short-term rental workshop, https://ottawa.ca/en/short-term-rental-workshop-3, which no doubt brought forth many competing viewpoints on Airbnb, VRBO, Expedia et al. Below you will find my note to Brian and also a defense of home-sharing written by yours truly and hosts David Bush and John McMahon (in April 2019).

Brian, hope all is well. Many people who attended your workshop also read an OBJ article about Fairbnb, https://obj.ca/article/airbnb-similar-services-limiting-access-affordable-housing-ottawa-lobby-group, which provoked yet more heated debate. I hope you don’t mind, but I wanted to send you a letter to the editor (OBJ’s David Sali) that three Airbnb hosts (me and my spouse, Dawn, Dave and Angela Bush, and Carianne and John McMahon) penned. See below.

I am a passionate advocate for affordable housing and work with OCH (Ottawa Community Housing), Emily Murphy Non-Profit Housing Corporation (EMNPHC) and others, and I can tell you from experience that they believe that a $1,100 per month, 1-bedroom apartment in Ottawa (or maybe a $1,300 or $1,400 apartment on Airbnb) is NOT affordable under any circumstances to a single mom with 2 kids living on $1,400 of support a month. EMNPHC rents single moms 2 and 3-bedroom apartments for as little as $95 a month. That is not a misprint—ninety-five bucks a month.

So, even if the city of Ottawa bans Airbnb tomorrow, that 1-bedroom apartment will still be rented, but not to people who need it.

I really think many opponents of Airbnb are looking through the wrong end of the telescope. In any event, I believe the solution to affordable housing lies elsewhere—I have a few ideas on how to solve the affordable problem—and give people apartments for FREE. If you are interested, I’ll show you.

Anyway, I include (below) our letter to the editor. I hope it can be part of your final report. You certainly have our permission to use it as you see fit. Looking forward to reconnecting soon.

Best, Bruce

In Defense of Airbnb: letter to the editor of OBJ, Ottawa Business Journal David Sali

Dear OBJ Editor,

We are disturbed by the one-sided views presented in a recent April 9th, 2019 Ottawa Business Journal article, Airbnb, similar services limiting access to affordable housing in Ottawa: lobby group, https://obj.ca/article/airbnb-similar-services-limiting-access-affordable-housing-ottawa-lobby-group.

Here are three responses from Airbnb hosts—John McMahon, David Bush and OBJ contributor Bruce Firestone—which may help OBJ readers put that article in perspective…

First, from Bruce Firestone:

My wife and I have a 375 square foot, 3-room microsuite which we rent out on the home-sharing platform Airbnb. Our primary market is made up of women with high-risk pregnancies who need to lease space close to the Civic Hospital. Our place (called the Hideaway) fits that need.

The Hideaway generates between $1,100 and $1,500 a month for our family, and, as readers of OBJ may recall, we both work for a living, so this is a meaningful amount of income for us. Like many Canadians, we do not have pensions—in fact, we are on the “Freedom 95” plan—you know the one that goes (only partly in gest) like this: “I figure we can afford to retire approximately five years after we die.”

From our last guest’s point of view, she would have spent over $150 a night renting a hotel room (that’s $4,500 a month) for herself, her husband and her 3-year old daughter. That room would likely not have had a full kitchen, a workstation, a lunch counter, a stacked laundry, a family area, a tech package (including internet, wi-fi, Netflix, Crave TV, HBO, Showtime, large screen TV…), nor, in all probability, would it have had direct access to the outside.

So far, we are 2 for 2, that is, Airbnb helps seniors like us not become dependent on the state for sustenance or our children or grandchildren, and it helps our guests too. Don’t believe me? Here’s Emilie’s review:

“Very stylish place. Easy check in with a lock box. Very comfy bed. Has everything you need, and beyond. Even has a full-size kitchen and washer/dryer. Huge shower. Small space with everything you need full size. Our host was very quick at responding and helped make sure all our needs were met very quickly. Highly recommend.”

Now let’s tackle the affordable housing issue head on. Here’s the thing—I coach non-profits and charities as well as foundations deeply involved in addressing this housing crisis. And guess what? They detest the idea that “affordable housing” means having nice bike paths nearby a few gentrified units. That’s not affordable anything.

Let me prove it to you. One non-profit housing corporation in Ottawa I work with provides truly affordable units for single moms—they pay $80 a month. Yeah, you read it right: eighty bucks per month. With utility costs on top of that, it’s all these struggling women can afford to pay; their hydro electricity bills outrageously top $400 per month during wintertime (they are using electric baseboard heaters). It’s a tough choice—rent, heat or food for their kids.

If the city of Ottawa inadvisably decides to turn its back on the sharing economy and bans or severely limits Airbnb, VRBO (Vacation Rental by Owner) or other home-sharing platforms, it won’t help anyone except maybe the hotel industry and probably not them either. Our guests are never going to stay in a posh hotel, never, ever.

And if Airbnb is torpedoed, we’ll rent it out to some nice professional for about $1,000 a month; so, we will lose some dough but homeless folks and those in need of real affordable housing won’t gain a thing.

We need more affordable housing, for darn sure. The city could do a lot in this regard—how about making more land available for development of more housing? That’d be a nice start.

But curtailing home-sharing will hurt everyone… Airbnb critics are looking through the wrong end of the telescope I’m afraid.

Bruce M Firestone, PhD, Real Estate Investment and Business coach, ROYAL LePAGE Performance Realty broker, Ottawa Senators founder

Second, from Dave Bush: Suspicious Motives

After reading your OBJ article discussing the “evils” of Airbnb, I decided to learn more about the Fairbnb coalition, https://fairbnb.ca/about/coalition-members/.

In Ottawa, there are exactly two members of the “coalition:”
-Canadians for Tax Payer Fairness
-Ottawa-Gatineau Hotel Association

Notice that number 2 on the list represents all the hotels in the Ottawa-Gatineau region—now why would this group all of a sudden care about the availability of affordable housing in our region? It appears that Fairbnb is a lobby group paid for by hoteliers simply trying to maximize profit. It looks manipulative to me

My wife and I have been hosting on the Airbnb platform for about 2-years now and one thing we’ve noticed is that it is not all tourism. Guests have stayed with us for many reasons. We’ve had residents from the city of Ottawa stay with us because they are renovating their homes, or sometimes they are between homes, sometimes their homes have been flooded. Time and time again we’ve provided temporary accommodation for local residents.

We’ve hosted guests who are visiting an adult child who perhaps lives in a 1-bedroom apartment. We provide the extra space people need in this type of a situation. More often than not, we host students—serious students! We have had medical students and students of many other disciplines who don’t need a 1-year lease. They need temporary, AFFORDABLE accommodation. We also host people coming to the Ottawa region to work for short periods of time. Many people coming for work prefer to stay in a home because they can cook their own meals and create a home-away-from-home while they are working.

Who don’t we host? We don’t host fictional drunk tourists; you know the ones Fairbnb conjured up to scare their audience into believing that home-sharing only has a downside. Airbnb stands behind our strict no party rules and quiet hours in the evening. We are part of a growing number of responsible hosts who won’t tolerate shenanigans from guests who don’t want to follow the rules they agreed to when they booked accommodations with us.

What About Affordable Housing Stock?

Is Airbnb the fall-guy? Access to affordable housing is a problem in many larger sized cities across the country but is Airbnb really at the heart of this issue? What about all the condo buildings that have been built in Toronto, Ottawa and other major centers? Municipalities have had no problem issuing building permits to large builders to build skyscrapers that generate large tax revenues but certainly don’t generate affordable rental housing.
Who is really to blame for the affordable housing crunch?
Then came along Airbnb—what a perfect scapegoat for the city to blame for the lack of planning for affordable housing.

Job Creation?

Fairbnb stated that one host on the platform had over 78 listings—this is an attempt, in my view, to lead readers to believe that this host owns all of these properties. Airbnb has a feature on their platform that allows local residents to help other owners host guests. Yes, that’s right—they are creating jobs in the city of Ottawa for co-hosts, cleaners and many others.

Better Together?

The city of Ottawa benefits from welcoming home-sharing platforms. Doesn’t it make sense to create a new plan for the city that includes affordable housing, home-sharing, hotels, ride-sharing, tool-sharing and a zillion other platforms yet to be created? In the end, offering more options and features only makes Ottawa a more competitive city on a global scale and benefits all of its citizens.

Dave Bush, technologist and Airbnb host

Third, from John McMahon:

What disturbs me most is that your article might negatively sway public opinion because both sides of the argument are not presented. Shouldn’t a balanced view be the objective of OBJ?

As a businessperson, who has recently delved into the world of Airbnb, I would like to show a different side to the story.

My spouse and I invested, at considerable risk to us, in a property (a log cabin) located in rural Quebec; we decided to try renting it out via Airbnb.

I understand that as entrepreneurs, we take on risks that others won’t. When it comes to owning a rental property that is managed the traditional way, I run many risks. The fact is that I run more risks doing it the traditional way than by Airbnb. The simple fact that I don’t have to go to court to evict a tenant make it worth it alone.

We should be able to purchase a property and, providing that I’m not harming or putting people at risk in any way and paying my taxes of course, I should be FREE to rent our property out as often as I like for as much or as little as I like. As an entrepreneur, there are enough risks out there without having additional regulatory risk factors thrown in. If a property isn’t profitable, I will move my investments elsewhere and it definitely won’t be in affordable housing for people that are likely to default on their payments, cause damage to my property, require legal hassles for eviction, all of which cost me more and make it even more difficult to purchase other properties.

With my single Airbnb property, I have put thousands of dollars back into the economy by investing in furniture and animations to the property (much of which has been with local artisans and artists). I have also created work for an unemployed woman who is now cleaning our property regularly. I also hire snow removal and hot tub servicemen on a regular basis. This stimulates the local economy. Aside from the money that I directly inject into the local economy, I am also promoting tourist activity, which also has a positive impact on my community. This supports other local entrepreneurs struggling to survive in a tough economy. There is also another important factor that wasn’t addressed in the article. The more revenue I generate from my property, the more taxes I pay and therefore the more I support my local township.

When you consider all of these facts and you multiply the positive impact by the total number of properties being rented on Airbnb, this has a huge impact on our local economy. Not recognizing these simple facts is unjust.

Airbnb is a perfect system for self-regulation. Great hosts provide a great service and are recognized for it. They work hard to become Superhosts and therefore deserve their hard-won guest recommendations. Make no mistake… there is a lot of work required to be a Superhost.
John McMahon, Executive Coaching, Digital Marketing, Wellness Coaching, Motivational Speaking, Sales, and Entrepreneurship, Airbnb host

What disturbs me most is that your article might negatively sway public opinion because both sides of the argument are not presented. Shouldn’t a balanced view be the objective of OBJ?

As a businessperson, who has recently delved into the world of Airbnb, I would like to show a different side to the story.

My spouse and I invested, at considerable risk to us, in a property (a log cabin) located in rural Quebec; we decided to try renting it out via Airbnb.

I understand that as entrepreneurs, we take on risks that others won’t. When it comes to owning a rental property that is managed the traditional way, I run many risks. The fact is that I run more risks doing it the traditional way than by Airbnb. The simple fact that I don’t have to go to court to evict a tenant make it worth it alone.

We should be able to purchase a property and, providing that I’m not harming or putting people at risk in any way and paying my taxes of course, I should be FREE to rent our property out as often as I like for as much or as little as I like. As an entrepreneur, there are enough risks out there without having additional regulatory risk factors thrown in. If a property isn’t profitable, I will move my investments elsewhere and it definitely won’t be in affordable housing for people that are likely to default on their payments, cause damage to my property, require legal hassles for eviction, all of which cost me more and make it even more difficult to purchase other properties.

With my single Airbnb property, I have put thousands of dollars back into the economy by investing in furniture and animations to the property (much of which has been with local artisans and artists). I have also created work for an unemployed woman who is now cleaning our property regularly. I also hire snow removal and hot tub servicemen on a regular basis. This stimulates the local economy. Aside from the money that I directly inject into the local economy, I am also promoting tourist activity, which also has a positive impact on my community. This supports other local entrepreneurs struggling to survive in a tough economy. There is also another important factor that wasn’t addressed in the article. The more revenue I generate from my property, the more taxes I pay and therefore the more I support my local township.

When you consider all of these facts and you multiply the positive impact by the total number of properties being rented on Airbnb, this has a huge impact on our local economy. Not recognizing these simple facts is unjust.

Airbnb is a perfect system for self-regulation. Great hosts provide a great service and are recognized for it. They work hard to become Superhosts and therefore deserve their hard-won guest recommendations. Make no mistake… there is a lot of work required to be a Superhost.

John McMahon, Executive Coaching, Digital Marketing, Wellness Coaching, Motivational Speaking, Sales, and Entrepreneurship, Airbnb host

FOR REAL ESTATE INVESTMENT AND BUSINESS COACHING THAT’LL HELP YOU PROVIDE FOR YOURSELF AND YOUR FAMILY FOR 3-GENERATIONS, PLEASE CONTACT:

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD
Real Estate Investment and Business coach
ROYAL LePAGE Performance Realty broker
Ottawa Senators founder
1-613-762-8884
bruce.firestone@century21.ca
twitter.com/ProfBruce
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brucemfirestone.com

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Image source: Financial Times – April Dembosky (FT) and Joe Gebbia (Airbnb), CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=33306879