The Underground Economy of Illegal Airbnbs in Vancouver
Sep 8, 2025
The Shadow Market Nobody Wants to Talk About
Walk through downtown Vancouver on any given weekend, and you’ll notice something odd: more rolling suitcases than residents. Condo towers designed for families and long-term renters now function as revolving hotels, with lights flicking on and off like clockwork as strangers cycle through units every three days.
On paper, strict bylaws were supposed to curb this. Since 2018, the City of Vancouver has had one of Canada’s toughest short-term rental rules—requiring all Airbnb and Vrbo hosts to live in the home they rent out and to register for a city licence. In 2023, the province doubled down with a sweeping Short-Term Rental Accommodations Act, raising fines to $3,000 per day for hosts and up to $10,000 per day for platforms.
Yet despite the legal armour, Vancouver is still awash in illegal Airbnbs. Official audits confirm what renters and neighbours have been saying for years: nearly half of all short-term listings are unlicensed, operating in the shadows of a weak enforcement system. These rogue units don’t just break bylaws—they siphon away desperately needed housing stock, push rents higher, and feed what has become a lucrative underground economy.
The story here isn’t about one or two bad actors gaming the system. It’s about a parallel housing market worth tens of millions of dollars annually, thriving on loopholes, under-enforcement, and sheer volume. Every illegal unit is effectively a ghost home—removed from the long-term rental pool, insulated from taxes, and run like a hotel in disguise.
Why This Matters for the Housing Crisis
It’s easy to dismiss a handful of Airbnb operators as harmless “side hustlers.” But scale changes everything. According to one provincial audit, more than 11,000 illegal units were live in 2024 across B.C., concentrated in urban hotspots like Vancouver, Whistler, Kelowna, and Victoria. In Vancouver alone, thousands of condos and basement suites were quietly monetized as short-term rentals, even as the city declared housing affordability its top crisis.
Research from tenant advocacy groups and housing economists shows a clear link: in neighbourhoods with high STR density, rents increase faster, vacancy rates fall, and families face steeper competition. In a market already stretched by speculation, foreign capital, and stagnant wages, illegal Airbnbs are gasoline on the fire.
For long-term renters, this isn’t abstract policy—it’s lived reality. Apartments vanish from Craigslist, only to reappear on Airbnb as “stylish downtown retreats.” Seniors in strata buildings watch revolving door tenants drag luggage past their doors at midnight. Students pay more because their “affordable” units have been converted into tourist suites.
In short: the underground Airbnb economy is not a quirky sideshow. It’s a systemic leak that worsens Vancouver’s housing crisis while creating a two-tiered reality—where rule-following landlords face taxes and paperwork, while rule-breakers rake in higher returns under the table.
How Did Vancouver Get Here?
The irony is that Vancouver was once seen as a leader in regulating short-term rentals. The 2018 bylaw was supposed to end the “ghost hotel” era by limiting listings to principal residences only and forcing hosts to buy a licence. The city touted it as a crackdown that would return thousands of units to the rental market. For a while, the numbers did fall—Airbnb’s Vancouver listings dropped from around 6,600 in 2017 to under 3,000 in 2019.
But the victory was short-lived. Hosts adapted. Some faked licence numbers. Others quietly shifted bookings off-platform, arranging stays through Instagram, WhatsApp, or personal websites. A new shadow industry of property managers emerged—handling multiple units for absentee owners while using tenants, friends, or relatives as “front” names to satisfy the principal residence rule.
By 2023, the province admitted the system was broken. Enter the Short-Term Rental Accommodations Act, forcing platforms to share data, delist unregistered listings, and comply with stiffer fines. In theory, it was a hammer. In practice, hosts found ways to slip through cracks almost immediately—leaving enforcement chasing ghosts across dozens of platforms and private networks.
This is the landscape we’re diving into: a city with clear rules but weak teeth, a province scrambling to plug leaks, and a market where thousands of homes function as illegal hotels under the noses of neighbours, councillors, and inspectors.
This investigation will go deep into:
The history of Airbnb in Vancouver—from its “sharing economy” origins to today’s black market of professional operators.
The scale of the problem, with hard numbers and regional comparisons.
The underground playbook—the tricks and tactics hosts use to stay invisible.
Case studies where operators were caught, fined, or challenged in court.
Why enforcement keeps failing, despite tougher laws and bigger fines.
The wider cost to affordability, neighbourhood life, and public trust.
Global comparisons—what New York, Berlin, and Paris did differently.
The future—whether B.C.’s new laws can finally shut the door on the underground market.
From Sharing Economy to Corporate Underground
When Airbnb first entered Vancouver in the early 2010s, it marketed itself as harmless—an easy way for locals to “share” their homes with travelers, earn a bit of side income, and create authentic cultural exchanges. In those early days, listings really did look like spare bedrooms, garden suites, and couch-surfing options. The company framed itself as the anti-hotel, the grassroots disruptor.
But as Vancouver’s real estate market spiraled into a global investment vehicle, the tone shifted. By 2016, entire condo towers in downtown were known as “ghost hotels.” Units weren’t homes anymore—they were full-time, unlicensed Airbnbs run by absentee landlords or corporate managers. The city, alarmed by the sheer volume of housing lost, commissioned studies showing that thousands of long-term rentals had disappeared into short-term platforms.
The First Crackdown: 2018’s Principal Residence Rule
In response, the City of Vancouver rolled out what was then Canada’s toughest bylaw in 2018. The rules were clear:
You could only rent out your principal residence—the home you actually live in.
Every host needed a city licence, displayed on their listing.
Violators faced fines up to $1,000 per day.
The announcement made headlines. Officials promised that thousands of units would return to the long-term market. In the first year, enforcement looked promising: the number of active Airbnb listings in Vancouver fell from over 6,600 in 2017 to under 3,000 in 2019.
For a moment, the city celebrated. Airbnb even struck a data-sharing deal to help cross-check licences. It seemed like victory.
How Hosts Adapted
But the underground economy never went away—it just evolved. Hosts and property managers quickly figured out how to game the system:
Fake licence numbers: Many listings simply copied or invented registration IDs. Unless a guest checked the city’s database, the fraud went unnoticed.
Multiple-unit operators: Some managers used relatives or “tenants” as fake licence holders while running 10+ units under different names.
Platform-hopping: To dodge scrutiny, many shifted their properties from Airbnb to lesser-known sites like Vrbo, Craigslist, or private booking websites.
Off-platform networks: Social media became a powerful underground booking tool. Facebook groups, Instagram DMs, and even WhatsApp chats now serve as pipelines for illegal rentals—bypassing Airbnb’s own compliance system entirely.
This wasn’t the “sharing economy” anymore. It was professionalized, corporate, and increasingly brazen.
The Provincial Hammer: 2023’s Short-Term Rental Accommodations Act
By 2022, even the province admitted the city’s bylaws weren’t working. Housing affordability was at crisis levels, while evidence mounted that STRs were siphoning units away from renters.
So in October 2023, B.C. introduced the Short-Term Rental Accommodations Act, which:
Raised fines from $1,000 to $3,000/day for hosts and up to $10,000/day for platforms.
Forced platforms to share booking data with government.
Restricted listings to principal residences only (reinforcing Vancouver’s bylaw at the provincial level).
Expanded enforcement powers to provincial inspectors, not just municipalities.
The province declared it was finally “leveling the playing field.” But within months, familiar patterns reappeared:
Hosts simply moved underground—off-platform or through fake registrations.
Enforcement resources remained too thin compared to the scale of violations.
Complaints from tenants and neighbours piled up, with little visible follow-up.
Today: A Market in Two Realities
By 2024–2025, Vancouver exists in two parallel housing economies:
The legal short-term rental market, made up of properly licensed, principal-residence listings, usually a spare room or basement suite. These operators follow the rules, pay fees, and often barely break even.
The underground market, much larger and more profitable. These are full-time Airbnb “ghost hotels” disguised as homes, managed by professional operators, marketed off-platform, and effectively invisible to regulators.
An audit in 2024 confirmed that nearly 50% of listings across B.C. were illegal, including thousands in Vancouver. That’s not an edge case—that’s half the market.
Why History Matters
Tracing the evolution from sharing economy to black market shows us two things:
Enforcement victories are temporary unless loopholes are closed. Each new rule is met with new evasions.
The financial incentives are too powerful. In a city where rents are high and tourism is constant, running a condo as a ghost hotel simply earns more than renting to locals.
This historical arc—from couch-surfing app to multi-million-dollar underground economy—frames the real question for 2025: can Vancouver or B.C. ever truly regulate Airbnbs into submission, or has the “cat-and-mouse” game already been lost?
The Scale of the Problem — Numbers Don’t Lie
If Vancouver’s illegal Airbnb scene were a side hustle, we wouldn’t be talking about it. The problem is that it’s not small—it’s systemic, and the numbers confirm it. The underground market is not a handful of rule-breaking operators slipping through the cracks, but a sprawling black-market economy with thousands of homes effectively stripped from the long-term rental pool.
1. The Province’s Own Audit: Half the Market is Rogue
In 2024, the B.C. government ordered an audit of short-term rentals across the province. The findings were damning: of the 22,405 listings identified, nearly 50% were operating illegally. That means more than 11,000 units were in violation—running without licences, failing the principal residence requirement, or both.
Vancouver accounted for a large share. Despite the city’s head start with 2018 bylaws, thousands of condos and basement suites were still quietly being flipped into mini-hotels. The provincial legislation of 2023 didn’t wipe them out; it only pushed many deeper underground.
For context, that’s the equivalent of taking nearly half the rental housing stock of an entire mid-sized city like Kamloops or Nanaimo and turning it into tourist accommodation.
2. Regional Comparisons — Not Just a Vancouver Problem
While Vancouver is ground zero, the problem stretches across B.C.:
Whistler: Always a magnet for short-term rentals, Whistler has some of the strictest licensing regimes in the province. Yet audits found dozens of full-time STRs being marketed illegally, often disguised as “seasonal leases.”
Kelowna: With its booming summer tourist draw, Kelowna saw hundreds of condos flipped to STRs. Even after licensing crackdowns, unpermitted listings remained stubbornly high.
Victoria: The capital city has repeatedly fought operators using shell companies and numbered corporations to manage entire portfolios of STRs in buildings explicitly zoned for residential use.
Sun Peaks: The resort municipality, much smaller in scale, was flagged for a proportionally huge number of illegal STRs, showing that even small communities aren’t immune.
Together, these markets form a patchwork of resistance and evasion—illustrating that illegal STRs are not a quirky Vancouver oddity but a province-wide underground economy.
3. The Rental Market Impact
The numbers matter most because of what they do to rents. Multiple academic studies have measured the effect of STR density on long-term housing affordability. The findings are remarkably consistent:
Every dedicated short-term rental in a neighbourhood pushes average rents higher. One Canadian study suggested each additional STR per 100 rental units raised rents by around $49/month in that neighbourhood.
Vacancy rates fall. When landlords shift from year-long leases to nightly stays, the available pool of rental housing shrinks, leaving families, students, and newcomers competing for fewer units.
“Naturally affordable” housing disappears. Basement suites and older condos—units traditionally rented at lower cost—are disproportionately converted into Airbnbs, removing the most affordable stock first.
For Vancouver, already one of the least affordable cities in North America, this is catastrophic. Renters now face not only speculative investors and high interest rates, but also the shadow economy of illegal STR operators cherry-picking units for higher returns.
4. Who’s Running the Illegal Market?
The stereotype is that every illegal Airbnb is a struggling homeowner renting a basement suite. The reality is different:
Multi-unit operators dominate. Many manage 5, 10, or even 20 listings under different names.
Property managers often run entire portfolios on behalf of absentee landlords.
Investors deliberately buy condos for the sole purpose of operating them as STRs—ignoring zoning, strata rules, and city bylaws.
These aren’t hobbyists. They’re professional operators who know the rules and have chosen to ignore them.
5. Vancouver’s Numbers in Global Context
Illegal STRs are not unique to Vancouver, but the scale is outsized compared to its size. Consider:
New York City had roughly 10,000 illegal STRs before its 2023 purge.
Paris had around 20,000 illegal listings in the mid-2010s.
Vancouver, a city of just 700,000, is estimated to have thousands—on par with global megacities.
Per capita, Vancouver is among the most heavily saturated STR markets in the world. That’s what makes its underground economy especially damaging: in a city this small, every unit lost hurts.
The numbers don’t lie: the underground Airbnb market in Vancouver is enormous, systemic, and entrenched. Almost half of the province’s short-term rentals are illegal. Entire swaths of the city have been transformed into ghost hotels. And the impact isn’t abstract—it shows up in higher rents, lower vacancy, and fewer affordable options for actual residents.
The Underground Playbook — How Hosts Evade the Rules
If you want to understand why Vancouver is still drowning in illegal short-term rentals despite years of crackdowns, you need to look at the tricks. Hosts—especially professional operators—have built an arsenal of tactics to outpace regulators. What started as a loophole hunt has evolved into a full-fledged underground playbook, polished by years of trial, error, and exploitation.
1. Fake Licence Numbers
The most common tactic is the simplest. Vancouver requires every Airbnb listing to display a city-issued business licence. The licence is a seven-digit code that’s supposed to link to the City’s public registry.
What happens in practice? Many hosts just make one up.
Some copy valid codes from other listings.
Some recycle expired numbers.
Some invent random digits that “look right” to pass the platform’s automated checks.
Unless a guest manually cross-checks against the city’s registry (something almost no tourist does), the deception goes unnoticed. Inspectors, meanwhile, don’t have the manpower to audit every listing.
2. Multiple-Unit Shell Game
The “principal residence” rule is designed to prevent landlords from running ghost hotels. But operators discovered a workaround: spread ownership across multiple names.
A husband and wife can each register a unit separately as “principal.”
Parents, siblings, or friends can be listed as “owners,” even if they don’t live there.
Property managers often pay tenants or acquaintances a small stipend to act as the “licence holder” on paper while they run multiple listings in reality.
The result? A single operator may control ten or twenty units, all technically registered under different “principals.”
3. Off-Platform Booking Networks
One of the biggest weaknesses of enforcement is that it depends on platforms like Airbnb and Vrbo sharing data. But many hosts have simply moved beyond the platforms entirely.
Here’s how the underground booking economy works:
Instagram & Facebook: Listings are promoted on social media accounts, sometimes disguised as “short-term sublets” or “executive rentals.”
WhatsApp & WeChat: Returning guests are encouraged to book directly via private messaging, cutting Airbnb out of the loop.
Private websites: Professional operators run their own booking portals, offering “Airbnb-style” stays but with no oversight.
This method is lucrative: operators avoid platform fees, dodge licence checks, and keep a steady stream of bookings invisible to regulators.
4. Seasonal Shape-Shifting
Some hosts toggle between legal and illegal operations depending on the time of year.
During the summer, they run units as full-time Airbnbs, capitalizing on tourist demand.
In the winter, they lease them out short-term to students or temporary workers to create the appearance of “principal use.”
This seasonal rotation makes enforcement tricky. By the time inspectors investigate, the unit may technically be in long-term use again.
5. Exploiting Grey Areas in the Law
The biggest loophole is also the most subjective: what counts as a principal residence?
The bylaw doesn’t define how many days you must live there, how much of your personal life must be visible, or whether renting out 90% of the year still qualifies. Operators exploit this vagueness.
Some leave a toothbrush, a jacket, or a few family photos behind to stage the unit as a residence.
Others argue that since they return for a week or two per year, it still counts as their home.
In hearings, some claim “temporary work abroad” or “extended vacations” to justify year-round Airbnb use.
Panels have started cracking down—rejecting renewals for owners who admitted their homes were rented 76% or 90% of the time. But until the law is rewritten with clearer thresholds, this grey area remains exploitable.
6. Platform Complicity
Airbnb and Vrbo publicly promise compliance, but in practice, their enforcement is sluggish.
Some illegal listings stay up for months after complaints.
Airbnb’s system often auto-approves licence numbers without verifying them against city data.
Hosts caught once can often relist under a new profile with little resistance.
In other words, enforcement is heavily dependent on platforms—but the platforms have financial incentives to keep as many listings live as possible.
7. Community Frustration
The outcome of all these evasions is predictable: residents don’t trust enforcement. Stories abound of people reporting the same illegal Airbnb dozens of times with no action taken. As one Vancouver resident put it on Reddit:
“I’ve reported dozens of illegal Airbnbs with lots of evidence and it doesn’t appear that any action has been taken.”
The sense of futility feeds the cycle: hosts know enforcement is slow, neighbours know complaints vanish, and the underground economy thrives.
The tricks are clever, but they’re not genius. They’re only effective because the enforcement machine is underpowered, the laws are fuzzy, and the platforms drag their feet. Illegal Airbnbs thrive because the cost-benefit calculation works in their favour: the profits are large, the odds of getting caught are small, and even if caught, the fines are often negligible compared to years of tax-free revenue.
Case Studies — The Human and Political Fallout
For all the talk of bylaws and audits, the real story of Vancouver’s illegal Airbnb market lives in individual cases—the neighbours who fight them, the operators who bend rules, and the city officials forced to pick sides. Each case reveals not only how operators exploit loopholes, but also how fragile enforcement is when tested against real money and real people.
1. Keefer and Abbott Street: The Repeat Offender
One of the more high-profile cases involved an operator who ran multiple unlicensed Airbnbs out of condos near Keefer and Abbott in downtown Vancouver. Despite repeated complaints and fines, the host continued operating.
Eventually, the case landed in front of a City of Vancouver hearing panel. The operator pleaded guilty, admitting that they had ignored bylaws and run multiple illegal units. The city denied their reapplication for a licence, citing a clear pattern of disregard for the rules.
This case illustrates two points:
Enforcement works eventually, but only after months or years of violations.
In the meantime, the operator had already extracted significant income, likely dwarfing any fines.
2. The “Portugal Couple” and the Principal Residence Test
Another case put the “principal residence” loophole under a microscope. A Vancouver couple, temporarily living in Portugal, applied to renew their Airbnb licence. They argued that the unit was their principal residence, even though it had been occupied by Airbnb guests for over 80% of the year.
The city rejected the application, and a review panel upheld the decision. The verdict was clear: you can’t spend most of your time abroad and still claim your Vancouver condo is your principal residence for short-term rental purposes.
This case was widely discussed because it highlighted how subjective the rule still is. What counts as “living” somewhere? A week per year? A toothbrush left in the bathroom? Without a hard metric—like minimum occupancy days—the law leaves too much room for debate.
3. The 76% and 90% Listings
In 2024, two more owners went before the city’s rental board after their licences were denied. In both cases, the city presented occupancy data: one condo had been rented on Airbnb 76% of the year, another for over 90%.
Both owners claimed the units were still their principal homes—they simply “traveled often.” But the city wasn’t convinced. Renewal was denied.
This case marks a shift. The city, once hesitant, began using occupancy rates as a de facto standard for judging principal residence. Still, the lack of an explicit legal threshold means the door remains open for appeals and grey-zone operators.
4. Neighbourhood Fallout
Beyond hearings and panels, the most acute fallout is lived daily by neighbours. In condo towers across downtown and East Vancouver, residents complain of:
Noise and disruption: Late-night parties, rolling suitcases, strangers in the lobby at all hours.
Safety concerns: Unknown guests bypassing security, misuse of fire exits, or careless behaviour.
Loss of community: Long-term neighbours replaced by transient visitors, eroding the sense of belonging.
For some, it’s not just inconvenience—it’s a dealbreaker. Families have sold units to escape “ghost hotel” towers. Strata councils have spent thousands on legal fees trying to enforce bylaws against rogue operators.
5. Political Pressure and Legal Ambiguity
These cases have political consequences too. Every high-profile denial sparks debates over how far the city should go, whether penalties are strong enough, and whether operators are being unfairly targeted. Developers, tourism advocates, and landlord groups often argue that STRs are being scapegoated, while tenant groups and housing activists see them as a symbol of profiteering at the expense of affordability.
The courts, meanwhile, face the hardest questions: what exactly is a “home” in legal terms? And how do you regulate a market that thrives on ambiguity?
The Pattern Behind the Cases
Look closely at these examples and the pattern is clear:
Operators stretch the rules until they’re caught.
Enforcement lags far behind the violations.
Even when denied licences, operators often profit for years before facing consequences.
The damage—lost housing, destabilized communities—is already done by the time action is taken.
Why Enforcement Keeps Failing
If nearly half of B.C.’s short-term rentals are illegal, the natural question is: why isn’t enforcement working? Vancouver and the province have tough laws on the books, fines that look scary on paper, and inspectors tasked with policing violations. Yet thousands of units continue to operate openly, some even advertising on major platforms. The gap between law and practice reveals a system stretched thin, riddled with ambiguity, and undermined by powerful incentives.
1. Enforcement is Outnumbered
Vancouver has a small team of bylaw officers dedicated to short-term rentals. Their job: monitor thousands of listings, verify licence numbers, investigate complaints, and issue fines. The scale is impossible.
Consider:
There are 2,500–3,000 active listings in Vancouver at any given time.
About half are suspected of being illegal.
Each officer can only investigate a fraction of these in detail, and each case can drag on for weeks or months.
The city relies heavily on complaint-based enforcement, meaning unless a neighbour reports noise, traffic, or suspicious activity, many illegal listings fly under the radar. And even when complaints are filed, residents often describe radio silence or months-long delays.
2. The Loophole Problem
Even when inspectors act, bylaws themselves have built-in vulnerabilities.
Principal residence: The definition is vague, with no minimum occupancy requirement. Operators exploit this by leaving personal effects in units or claiming frequent travel.
Licence numbers: Hosts fake them easily, and platforms often don’t verify against city registries.
Seasonal rentals: Some units operate only during peak tourist seasons, dodging detection during off months.
Without airtight definitions, inspectors struggle to build cases that stand up in hearings or courts.
3. Weak Follow-Through on Fines
Fines sound severe—$1,000 to $3,000 per day. In practice, collection is another story. Many operators simply treat fines as a cost of doing business, especially if they’ve already made tens of thousands in illegal profits. Others drag cases through appeal processes, delaying consequences for years.
When units are run by shell companies, numbered corporations, or absentee owners abroad, collection becomes even harder. Enforcement officers often admit privately: they can issue the ticket, but good luck cashing it.
4. Platform Reluctance
Perhaps the biggest structural weakness lies with the platforms themselves. Airbnb, Vrbo, and similar services insist they comply with local laws—but their enforcement track record tells a different story.
Airbnb has been accused of auto-approving licence numbers without checking validity.
Illegal listings flagged by the city have stayed live for weeks or months.
Hosts banned once can return easily with new profiles or new names.
Why? Because these platforms profit from volume. Every delisted unit is lost revenue. Their compliance is reactive, not proactive, and always a step behind determined hosts.
5. Political Caution
Finally, politics. Short-term rentals sit at the intersection of housing and tourism—two powerful industries. Tourism groups argue that STRs support visitors and local economies. Developers warn that stricter rules scare investors. Homeowners sometimes push back, claiming they need Airbnb income to cover mortgages.
Municipal and provincial governments tread carefully. They want to appear tough on affordability while avoiding backlash from stakeholders. This often results in half-measures: enough regulation to announce a “crackdown,” but not enough to truly shut down the underground economy.
The persistence of illegal Airbnbs isn’t an accident—it’s a feature of a broken system. Small enforcement teams, vague laws, weak fine collection, reluctant platforms, and political caution combine into an environment where rules exist but aren’t consistently applied.
Operators know this. They know the odds of being fined are low, the appeals are long, and the profits are high. That’s why the underground economy thrives: because enforcement failure isn’t just occasional—it’s structural.
The Wider Cost — Housing Affordability and Neighbourhood Hollowing
Numbers, bylaws, and enforcement failures are important, but they don’t capture the human impact. Illegal short-term rentals don’t just bend rules; they reshape communities and directly affect affordability for thousands of residents. To understand the true cost of this underground economy, you have to look at what’s being lost: homes, neighbours, and stability.
1. Housing Units Disappearing Into Ghost Hotels
Every illegal Airbnb unit is one less long-term rental. In a market as tight as Vancouver’s, that subtraction matters.
A basement suite once affordable to a student now earns double as a tourist crash pad.
A two-bedroom condo that could house a young family instead cycles through visitors every weekend.
Even entire houses are converted into “executive rentals,” stripping multiple bedrooms from the local pool.
When thousands of these conversions happen simultaneously, the pressure on the long-term rental market is enormous. Tenants are left scrambling for fewer available units, often settling for smaller, pricier, or lower-quality housing.
2. Rent Inflation and Vacancy Distortion
Studies across Canada, the U.S., and Europe consistently show that short-term rental density drives rents upward. Vancouver is no exception.
Rents rise faster in areas with high STR density, particularly in downtown, East Vancouver, and around transit hubs.
Vacancy rates shrink because housing stock is removed. A city already sitting at historically low vacancy can’t afford to lose thousands of units to tourism.
Artificial scarcity develops: developers and landlords cite low vacancy as proof of demand, fueling higher prices for both rentals and new builds.
This distortion creates a vicious cycle: illegal Airbnbs reduce supply, shrinking vacancy drives up rents, and rising rents encourage more owners to flip to Airbnbs—feeding the crisis they helped create.
3. Families and Students Pay the Price
The groups hit hardest aren’t tourists—they’re families, students, and newcomers.
Families face fewer options for multi-bedroom rentals because those units command premium rates on short-term markets.
Students, already struggling with affordability, lose access to basement suites and smaller apartments traditionally available to them.
Newcomers to Vancouver—especially immigrants—are forced into overcrowded or unstable housing because entry-level stock is absorbed into the underground Airbnb economy.
For these groups, the impact isn’t theoretical. It’s fewer choices, higher prices, and growing precarity.
4. Neighbourhoods Becoming Hotels
Affordability isn’t the only cost—community itself takes a hit.
In towers and townhouse complexes, long-term residents see a constant churn of strangers, eroding the sense of neighbourliness.
Safety concerns rise when security systems are overwhelmed by key exchanges, code sharing, and strangers unfamiliar with building rules.
Strata councils report nuisance complaints: parties, noise, overstuffed elevators, garbage mismanagement, and general disruption.
Neighbourhoods built for families and residents slowly morph into ghost hotels, where stability is replaced by turnover.
5. Erosion of Public Trust
Illegal Airbnbs also create a broader legitimacy problem. Residents see rules on paper but little follow-through in practice. They file complaints and see no visible results. They hear promises of crackdowns but still watch tourists dragging suitcases through their lobbies.
That gap erodes trust—not only in housing enforcement, but in local governance overall. Citizens start asking: if the city can’t enforce bylaws on Airbnbs, how can it be trusted to deliver on bigger promises around affordability or development?
6. The Ripple Effect Beyond Housing
The cost doesn’t stop at housing markets. The underground Airbnb economy distorts other systems too:
Municipal revenue: Licensed operators pay business licence fees and taxes. Illegal operators often avoid both, starving the city of funds for infrastructure and services.
Insurance risks: Units used as short-term rentals without disclosure may violate insurance policies, leaving neighbours and buildings vulnerable in emergencies.
Tourism distortion: Hotels argue they’re playing by the rules—paying taxes, maintaining safety standards—while illegal Airbnbs undercut them with no accountability.
These ripple effects make clear: this isn’t just a housing issue—it’s a systemic fairness issue across multiple sectors.
The true cost of Vancouver’s illegal Airbnb economy isn’t just measured in fines or missing licences—it’s in missing homes, fractured communities, rising rents, and eroded public trust. Every unlicensed Airbnb is more than a bylaw violation; it’s another blow to affordability and livability in a city already hanging by a thread.
Global Comparisons — How Other Cities Tackled Illegal STRs
Vancouver’s struggle with illegal short-term rentals isn’t unique. Cities across the world have been fighting the same battle—housing stock evaporating into ghost hotels, communities destabilized, and regulators scrambling to catch up. What sets Vancouver apart, however, is how modest its enforcement has been compared to global peers. To see what might work here, it’s worth looking at how other cities approached the underground Airbnb economy.
1. New York City: The Nuclear Option
In September 2023, New York City introduced Local Law 18, a sweeping crackdown on illegal short-term rentals. The law effectively banned full-unit rentals under 30 days unless the host was present during the stay, with a maximum of two guests allowed.
Registration required: Hosts had to register with the city and list numbers were verified before platforms could post them.
Platforms penalized: Airbnb and Vrbo faced fines if they listed unregistered units.
Results: Overnight, tens of thousands of listings vanished. Airbnb sued, calling it a “de facto ban,” but courts upheld the law.
The lesson: when platforms are held directly accountable and real-time verification is mandated, the underground market collapses quickly.
2. Paris: Registration Plus Strict Caps
Paris, one of Airbnb’s largest markets, has faced housing shortages and neighbourhood hollowing for years. Its solution combined registration with strict usage caps:
Limit of 120 days per year for short-term rentals of a principal residence.
Mandatory registration with the city, tied to tax and zoning records.
Heavy fines: Up to €50,000 per violation.
Enforcement: Paris created dedicated teams to investigate listings, with help from data-sharing agreements.
The city clawed back thousands of units into the rental market, though enforcement still requires constant vigilance.
3. Berlin: Temporary Ban, Then Regulation
Berlin went further in 2016 with a near-total ban on short-term rentals of entire apartments.
Only partial rentals (spare rooms) were allowed without permits.
Hefty fines: Up to €100,000.
After backlash and legal challenges, the city softened the rules in 2018, allowing entire-home rentals up to 90 days a year, but only with registration.
The Berlin case shows that even aggressive bans face political pushback—but also that governments can recalibrate while still limiting the underground economy.
4. Barcelona: Pursuing Platforms in Court
Barcelona, another global hotspot for STR abuse, decided the only way to win was to take the platforms head-on.
The city repeatedly fined Airbnb and other platforms for listing illegal rentals, at times suspending thousands of listings at once.
Inspectors actively scoured sites and compared data to the city registry.
Airbnb eventually agreed to work with the city, verifying licences before publishing listings.
Barcelona demonstrates that aggressive legal pressure can force global corporations to cooperate—something Vancouver has yet to attempt at full scale.
5. What Vancouver Can Learn
Comparing these cities highlights three critical takeaways:
Platform Accountability is Key
Without forcing Airbnb and Vrbo to verify licences against official registries, illegal hosts will always slip through. Vancouver’s reliance on self-reporting is outdated.Dedicated Enforcement Teams Work
Paris and Barcelona staffed specialized teams that did nothing but investigate STR violations. Vancouver’s handful of inspectors can’t match that capacity.Clear Definitions Beat Grey Areas
New York and Berlin eliminated the wiggle room by banning or capping rentals outright. Vancouver’s vague “principal residence” rule, by contrast, invites exploitation.
Around the world, cities facing the same pressures as Vancouver have found success with tougher, more direct measures: ban entire homes, cap rental days, fine platforms, and expand enforcement. Vancouver’s softer approach—trusting platforms, complaint-based enforcement, and ambiguous definitions—has left it an outlier.
If the city wants to reclaim its housing stock, it doesn’t need to reinvent the wheel. It needs to borrow the playbook from places that have already proven it works.
The Future — Can B.C. Finally Shut the Underground Market Down?
With Vancouver now the poster child of Canada’s underground Airbnb economy, the question isn’t whether the problem exists—it’s whether the newest laws and political promises can actually fix it. The province’s Short-Term Rental Accommodations Act (2023), coupled with city bylaws, was billed as the strongest crackdown yet. But history shows us that paper laws and reality rarely align.
1. The Provincial Hammer vs. the Underground Market
The 2023 Act gave B.C. more tools than ever:
Fines up to $3,000/day for hosts and $10,000/day for platforms.
Mandatory platform data-sharing, making it harder for Airbnb to plead ignorance.
Enforcement powers expanded beyond municipalities to provincial inspectors.
On paper, it’s a game-changer. But skeptics point out that hosts have already shown they can adapt. Off-platform bookings, fake “principal residences,” and shell companies aren’t going away just because fines went up.
The real question: will the province have the political will and manpower to follow through? Or will the underground market simply mutate again?
2. The Platform Question
Global lessons show that you can’t fix short-term rentals without making platforms responsible. New York and Barcelona proved that forcing Airbnb and Vrbo to verify registrations before a listing goes live is the only effective approach.
B.C.’s law gestures in that direction, but so far enforcement has been slow. If platforms continue to profit from illegal listings while absorbing fines as a cost of business, nothing changes.
3. Municipal Pushback
Another wrinkle: municipalities aren’t all on board. Vancouver, Victoria, and Whistler welcome stricter rules, but smaller towns worry about tourism impacts. Sun Peaks and Kelowna, for instance, argue that short-term rentals are vital to their economies. This provincial-municipal tension could dilute enforcement if some regions drag their feet.
4. Will Listings Decline—or Just Go Deeper Underground?
The most likely outcome isn’t a clean sweep but a migration underground:
More hosts will pivot to Instagram and WhatsApp booking networks, invisible to inspectors.
“Friends and family” loopholes will multiply, with fake principal residences masking portfolios of 10+ units.
Entire shadow platforms may emerge, beyond Airbnb’s reach, catering specifically to guests looking for cheaper, off-the-books stays.
Unless the province invests in aggressive digital monitoring and real-time verification, the market may simply evolve out of sight.
5. The Political Stakes
Housing affordability will define B.C.’s political landscape in 2025 and beyond. If illegal Airbnbs continue thriving, governments risk being accused of cosmetic crackdowns—regulations that sound bold but change little. Opposition parties are already framing this as a credibility issue: “If you can’t enforce Airbnbs, how can you promise affordability?”
The stakes go further: if enforcement succeeds, thousands of units could return to the long-term market. If it fails, voters may see it as yet another broken promise in a province drowning in housing crises.
B.C.’s latest crackdown is stronger than past efforts, but enforcement will make or break it. Without platform accountability, massive inspection resources, and airtight legal definitions, the underground market will survive—leaner, stealthier, and even harder to kill. The province can either deliver a real correction or repeat the cycle of laws announced, hosts adapting, and affordability eroding.
What This Means for Buyers, Renters, and the Future of Housing
At this point, the picture is clear: Vancouver’s illegal Airbnb market isn’t a fringe problem—it’s a systemic leak in the housing system. Thousands of units are siphoned away from renters. Families are displaced. Communities morph into revolving hotels. And despite tough laws, the underground economy continues to thrive. The final piece of this investigation is to ask: what does all of this mean for the people who actually live here?
1. For Renters: A Rigged Game
If you’re a renter in Vancouver, the underground Airbnb economy is one more reason the deck is stacked against you. Every illegal listing is one fewer apartment available for lease. That scarcity keeps vacancy rates near zero, bidding wars fierce, and rent hikes relentless.
Students lose access to basement suites.
Newcomers are locked out of affordable entry-level units.
Families see two- and three-bedroom homes vanish into “luxury vacation rentals.”
The message renters hear is simple: your need for shelter is secondary to someone else’s weekend profits.
2. For Buyers: A Market Distorted by Speculation
Illegal Airbnbs don’t just harm renters—they warp the ownership market too. Investors often purchase units not to live in, but to run as covert hotels. That speculative demand drives up condo prices, leaving genuine homebuyers competing against portfolios disguised as “principal residences.”
Even if you do buy, living in a tower where half the neighbours are suitcase-toting strangers isn’t what most envisioned when signing a mortgage.
3. For Communities: Hollowed-Out Neighbourhoods
At the neighbourhood level, the cost is cultural as much as financial. When homes become hotels:
Community ties erode. People stop knowing their neighbours.
Safety declines. Buildings see more turnover, more misuse of security, and more late-night disturbances.
Civic trust weakens. Residents watch rules get ignored and lose faith that city hall can or will act.
Neighbourhoods built to be homes transform into transit hubs for strangers, robbing Vancouver of the social glue that makes a city liveable.
4. For Government: A Test of Credibility
The persistence of illegal Airbnbs is a credibility crisis for both municipal and provincial governments. When laws exist but aren’t enforced, when residents complain and see no results, when promises are made but loopholes remain—the entire policy framework starts to look like window dressing.
For governments that claim housing affordability as their top priority, the Airbnb question has become symbolic: if they can’t close this loophole, can they really fix the larger crisis?
5. For the Future: Two Roads
Vancouver and B.C. face a fork in the road:
Crack Down Hard: Follow the lead of New York, Paris, and Barcelona—force platforms to verify licences, staff up enforcement, impose strict occupancy caps, and eliminate wiggle room. This could return thousands of units to the rental pool and restore some faith in the system.
Status Quo Plus Cosmetic Fixes: Continue complaint-based enforcement, levy occasional fines, and watch the underground market adapt. Illegal Airbnbs will shrink when pressured, then resurface in new forms—always a step ahead of regulators.
Which path is chosen will shape the next decade of Vancouver housing.
Final Word: The Cost of Looking Away
The underground Airbnb economy in Vancouver is not just about tourists and condos. It’s about a city deciding what housing is for. Is it shelter, community, and stability—or is it an investment vehicle, a side hustle, and a black-market commodity?
As long as illegal Airbnbs flourish, Vancouver signals to residents that rules are optional, housing is negotiable, and profit trumps people. If governments fail to shut it down, the crisis deepens—not just in rents and vacancies, but in the very fabric of what it means to live in this city.
And that’s the real cost of looking away.
