July 2016
A Condo Community Perspective
You may have heard about the Sharing Economy. Businesses in the Sharing Economy include Uber, Airbnb and Rover.
Little of this has anything to do with sharing.
Each of these businesses allows virtually anyone to offer specific services for a fee. Airbnb allows people to rent out their home for short periods of time. Uber allows individuals to offer their personal vehicle as a taxi service. Rover allows parking spaces to be rented. In all instances, those offering the service are undercutting other businesses, most likely by avoiding costs of doing business such as licensing, registration, local regulations or possibly even taxes.
Airbnb is of particular interest to condo communities. There is a problem when condo suites are rented for short-term use.
Condo living involves living close to neighbours and common shared space in a building. Condo living includes building rules that typically prohibit short-term rental of suites and use of common areas by non-residents. These rules exist for very good reasons.
Rover allows people to rent out their parking spaces. Many condo corporations do not allow parking spaces to be rented except to those who reside in the building. Doing otherwise creates a security risk. It also creates more wear and tear on infrastructure that is supported by all.
A condo building is not a hotel. Trying to convert your condo suite to a hotel is inconsistent with condo living and a burden to neighbours. Condo ownership is predicated on shared ownership and use of space. Renting of this space to others conflicts with this purpose and can be problematic for those who suffer the consequences of misuse of this space.
One Ontario Chamber of Commerce (OCC) Report, Harnessing the Power of the Sharing Economy, is recommending that the provincial government come up with ways to regulate the Sharing Economy. This report recognizes that Sharing Economy services are here to stay; 85% of Torontonians support growth of the Sharing Economy, and 66% believe that Sharing Economy services are more convenient and more affordable. The report urges the province to find a way to better manage Sharing Economy services.
The OCC Report notes that existing regulation is outdated and should be reviewed. A regulatory framework needs to consider if outdated and possibly unnecessary regulatory requirements are being imposed on established businesses that prevent them from capitalizing on new technologies.
Properly regulated, the Sharing Economy can create value by creating efficiencies, reducing costs and providing jobs.
Harnessing the Power of the Sharing Economy Statistics
- Monthly earnings for a typical Airbnb host in Ontario: $450
- Annual nights booked for a typical Airbnb host in Canada: 52
- Uber riders in Toronto: 400,000+
- Percent of GTA residents who have used Uber: 20%
- Autoshare members in Toronto: 12,000
- Ontario consumers 18–34 years old active in the Sharing Economy: 40%
