Excessive government regulations and land use restrictions are the most documented drivers in our housing affordability crisis right now.
So, why, pray tell, is Premier Wab Kinew thinking of adding more regulations to fix a problem caused by excessive regulations?
It came to light late last week that the province is considering regulations on short term rentals. That is what they are calling it but, these are attacks on Airbnb owners who rent accommodations on the internet.
Attacks on Airbnb owners are really attacks on the property rights of all Manitobans.
Average people in our province are being squeezed on rents and are feeling desperate. But rather than look at the cumulative effects of years of rent controls which discourage apartment supply, and, more broadly zoning and land use restrictions that boost the cost of lots in the regular housing market, government is seeking a convenient villain and scapegoat.
While many Airbnbs are short term rental units where the owner doesn’t live in the principal residence, it is almost impossible to craft policies that don’t hurt all short-term rental owners who simply want to use their own property to earn income.
“It makes sense for us to have an open mind about this sort of regulation of short-term rentals as part of a comprehensive housing approach to boost housing supply and to ensure that we’re investing in meeting the needs of people right across the province,” Kinew said at an event hosted by the Association of Manitoba Municipalities in Brandon.
Short term rentals can have an effect of taking some long-term rentals off the market, but the harsh reality is that they are a drop in the bucket.
The Conference Board of Canada – a non-partisan think tank – found that despite the skyrocketing number of Airbnb listings, less than one percent of increases in rent can be attributed to increased Airbnb activity.
Despite these cautionary studies, Manitoba seems keen to be the next jurisdiction in line targeting Airbnb owners to solve a housing affordability crisis that is driven by land use restrictions and zoning regulations. BC is looking to create a business licensing scheme and Ottawa, which has no jurisdiction in the housing space, is fiddling with the tax system to punish short term rental operators.
The first lesson in good policy analysis is to examine outcomes and ignore intentions. Governments need to be seen “doing something” in facing pressure from the public about a public policy problem. Hence why politicians love ribbon cutting ceremonies where invited media outlets can write them up for “doing something.”
Politicians need to be reminded of the limits of government intervention and the dangers of unintended consequences.
Rather than scapegoat Airbnb owners using their property rights, the province must work with municipalities to have them remove and lessen the impact of the myriad of arcane zoning rules that limit the ability of landowners and developers to address housing issues.
Ironically, moves by the City of Winnipeg to adopt “as of right” zoning to densify established neighbourhoods by, for example, loosening up zoning rules to enable more fourplexes goes in the direction of empowering the property rights of housing owners.
Meanwhile Premier Kinew, forget that failed old time NDP religion of ever more virtue signalling regulations.
Say no to creating Wab’s Airbnb police.
We need fewer restrictions not more.
Joseph Quesnel is a Senior Research Fellow with the Frontier Centre for Public Policy. Watch Joseph on Leaders on the Frontier – Opening The Door For Indigenous Prosperity.
