Bunkies offer insight into the viability of short-term rentals

Over the years, a number of major cities across Canada have begun enforcing regulations that crack down on short-term rental activity. In Toronto, for example, new rules that entered into force in 2020 ensure that people can only list their primary residence as a short-term rental. Other cities like Vancouver and Ottawa have similar requirements.

According to David Wachsmuth, Canada Research Chair in Urban Governance and associate professor at McGill University in Montreal, these rules aim to address some of the negative impacts of dedicated short-term rentals on local housing markets. This includes concerns about the availability of housing.

“Municipalities are leaning very heavily towards regulations that want to limit short-term rentals to people’s primary residences, which says roommate is good – if you’re away for the weekend or have a bedroom friends, you should rent it out, it’s a positive-sum business,” he told CTVNews.ca in a Thursday phone interview. “But if you want to take housing off the market and exploit what’s actually a hotel, it shouldn’t be allowed.”

In fact, Wachsmuth said there is clear evidence that running full-time, short-term rental operations helps reduce the number of homes on the market and reduces the supply of affordable housing.

“Dedicated short-term rentals put non-local visitors in competition with local residents for this housing supply,” he said. “If you reduce the amount of available housing but you don’t reduce the demand for that supply of housing, prices go up.

“The more short-term rentals, the higher the prices.”

One company that offers a unique solution to this problem is Bunkie Life. Based just outside of Erin, Ontario, Bunkie Life sells DIY kits used to make small log cabins that can be assembled in days. These cabins, typically located on cottage or home properties and used as additional storage space, can be converted into tiny homes ideal for short term stays. Bunkie Life’s kits range from around 99 to 225 square feet, with prices as low as around $5,500 and as high as $20,000.

“Everyone loves the smell of wood and the feeling of being in a log cabin, there’s something very human and very earthy about it,” Bunkie Life co-founder David Fraser said during an interview. a video call with CTVNews.ca on Tuesday. “You are almost in the environment rather than in the house, looking out the window at the environment.”

Founded in 2017 by Fraser and his wife, Karrie, both started the business by building their own bunkies and placing them on short-term rental platforms such as Airbnb, renting them out to others as space to life for extra money. After seeing demand from customers looking to buy bunkies themselves, Fraser turned to producing DIY kits for anyone looking to build their own, he said.

“A lot of our customers have purchased bunkies and they use them for Airbnbs at their cottage or Airbnbs at their various properties across Canada,” said Fraser, who explained that many others have gone down a similar path buying their own. bunkie. kits, assemble the cabins and rent them out to others as an additional source of income.

Bunkies, like those offered by Bunkie Life, are a unique solution to the problems many cities face with short-term rentals, Wachsmuth said. Considering that they do not interfere with housing supply and avoid direct competition with long-term residents while allowing residents to earn money, the result is a win-win situation, he said. he declares.

“The idea of ​​the bunkie is really interesting and represents something a little closer to the spirit of house sharing,” he said. “I am very convinced that [for] the future viability of short-term rentals, Airbnb as a platform and other players in this space as well… that’s what the short-term rental market will need to look like.

A “TRAVEL REVOLUTION”

According to a Press release from Airbnb on February 3, Canadian hosts have earned $7.1 billion from the rental platform since 2010. As of April 30, 2021, the average amount of money earned by each host who hosted at least one guest on the previous year was $9,600. New Airbnb hosts, in particular, have earned $6 billion since the pandemic began. Of all listings that were booked in Q3 2021, half received their first booking within three days of activation.

“A lot of Canadians have really had to embrace something entrepreneurial since the start of the pandemic in order to make ends meet,” Airbnb spokesman Matt McNama told CTVNews.ca on a call Thursday. video. “[Hosting] has been an economic lifeline for many Canadians.

Not only has the pandemic impacted personal finances, but it has also led to a change in travel behavior, McNama said. The rise of remote work has allowed working life and travel to converge, he said, allowing more people to explore rural communities.

“Travel has become a lot more local and hyperlocal than it used to be, and people like David and Karrie have really shown how you can take advantage of that,” he said. “There are people from all over Canada coming to visit Erin, Ontario, instead of going to the United States or going overseas to Europe.

“What we’re really talking about here is a travel revolution.”

Fraser said he’s noticing a similar trend. Much of his company’s clientele includes family-oriented people who typically live in cities but also have a second home or cottage in a rural area, he said, and the COVID-19 pandemic played an important role in increasing the appeal of a cabin in the woods. Recent data compiled by Statistics Canada also demonstrates that more Canadians have moved away from urban centers during the pandemic and instead headed to smaller communities.

“The lure of going out [of the city] is definitely expanding exponentially,” Fraser said, pointing out that more and more people are confined to their homes due to the restrictions. “People are moving out of cities if they can, they’re buying land or cabins, or they’re moving into their cabin full-time and just selling their place in the suburbs.”

TRENDS FOR THE FUTURE

Fraser said the surge of people who have started exploring more rural areas across the country is part of a trend he expects to continue after the pandemic subsides. Since last year, Bunkie Life has sold 1,000 bunkies and Fraser expects the company to sell 1,000 more in 2022 alone, he said. Bunkie kits have already been sold from Vancouver Island to Newfoundland and Labrador.

According to McNama, the pandemic has also impacted the duration of short trips. Canadians using Airbnb are staying in short-term rental properties much longer than before, especially before the pandemic hit.

“The days of us going on weekend trips are over,” he said. “Now we can go for a week, two weeks, three weeks. We can work remotely and live anywhere, and that has really been a game changer. »

McNama also expects this behavior to continue throughout the year, he said.

“It’s absolutely a trend that’s going to continue through 2022, at least,” he said. “There has been a fundamental change in terms of working remotely with the flexibility we have in terms of being able to travel, and that is something that will continue.”

About Michael B. Billingsley

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