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airbnb

Amy Hosotsuji might be the paragon of millennial cosmopolitanism in Toronto. I met the Ontario College of Art and Design University (OCAD U) master’s student at the new Jimmy’s coffee shop on McCaul Street, where individual-sized tables line a long bench to form single-person stations. The setup parallels the social paradigm of the coffee shop goers themselves: adamant individualism is the common thread that unites them with their fellows.

When she walks into the shop to meet me, Hosotsuji is lugging a large plastic bag full of bedsheets. This meeting is transitory for her; she is coming from class at OCAD U and on her way to her Airbnb listing nearby, before heading home.

Despite what some might perceive as a hectic schedule, Hosotsuji is completely at ease ­— one might even say in her element. She exudes warmth and energy and seems genuinely engaged at the prospect of our discussion. I take this to mean that she is accustomed to a lack of routine. Like many others in her generation, she is far from tethered to the nine-to-five slog and this seems to suit her just fine.

I reached out to her through my own Airbnb profile, as part of a search for other students who were tapped into this ill-defined but expanding trend known as ‘home sharing.’ Sunny as the term sounds, it is currently the subject of debate in cities like Toronto, where the rise of platforms such as Airbnb has precipitated debates about residential zoning and the appropriateness of homeowners profiting off short-term rentals. This is due to the scarcity and high cost of rental apartments.

Airbnb works by connecting people with extra space in their homes, or ‘hosts,’  with travellers looking for short-term accommodation. Some decry that the availability of this short-term rental option for prospective hosts may sap the supply of long-term rentals in cities where Airbnb is very popular, which would drive the cost of housing up.

Concerns about the cost of housing are not new, especially to students in Toronto who face some of the highest rental rates in the country.

To some students, home sharing acts more as a solution to rental rates rather than an exacerbating factor. I would place myself among that camp. Faced with a seemingly impossible search for a room in September of 2015 — my 25 pound furry cat hardly made me an enviable roommate — I signed a lease for a small one-bedroom apartment above a shop. Renting out the daybed in my den through Airbnb part-time helps offset the cost of living on my own. It’s the most cost-effective living arrangement I’ve had in the four years I’ve lived in the city.

Satisfied as I may be with my own home sharing experience, the growing trend warrants careful attention. Airbnb listings and hosts vary tremendously, from students offering glorified air mattresses to casual business owners operating multiple listings at once, the so-called ‘professional hosts.’ In Toronto, Airbnb is not regulated and has received far less attention from regulators than other ‘sharing economy’ giants like Uber, despite the fact that Airbnb itself welcomes the prospect of regulation as it marches steadily into the mainstream.

Regardless of where individuals stand on home sharing, it seems certain that the pressures brought on by Airbnb and similar platforms are symptomatic of a mentality shift about what constitutes a commodity in 2016.

For better or worse, our private lives and our work lives are increasingly blended: a hobby for calligraphy can serve as currency on Benz, a bartering platform, and owning a bicycle can qualify you as courier for a plethora of delivery services like Hurrier, Foodora, and Uber Eats. Airbnb shows that spare space within our homes can also be a commodity. Students who will be entering the workforce in the coming years will undoubtedly find themselves in the midst of this changing ethos.

A portal to the world and a paycheque

After having completed her undergraduate degree in New York City, Hosotsuji worked in the not-for-profit sector for five years before deciding to return to school. She is pursuing a Master of Design degree, with a focus on strategic foresight and innovation.

“I’m really interested in designing for social causes, particularly for social services or like community development,” Hosotsuji explained. Her degree program was founded in 2009, and OCAD U’s website describes it as answering a need for “a new kind of designer: A strategist who sees the world from a human perspective and re-thinks what is possible; An innovator who can imagine, plan and develop a better world.”

Taken simply, Hosotsuji is studying how to prepare and strategize for an unpredictable future — a tall order in this constantly evolving world. Nevertheless, she seems not only to have accepted the old saying ‘change is the only constant’ but also to have embraced it; she has made it her mission to master this reality.

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Hosotsuji’s program of study seems like an appropriate path for a person who is more sure of her leadership abilities than where they will take her.

“I’m particularly interested in being my own boss and starting a company once I graduate. So I’m not exactly sure what yet, but I know that I’m passionate about designing and community service particularly around, how [to] amplify marginalized voices,” she explained.

It seems fitting then, that in order to pay for her education, Hosotsuji is making use of Airbnb, a platform that affords hosts near complete control over the design of their space and how it is offered, while connecting them to guests with various needs from all over the world.

Hosotsuji’s entrance into Airbnb was near serendipitous. Her father had owned a townhouse close to both OCAD U and U of T, which he saw as a potential revenue stream that could go towards Hosotsuji’s higher education.

“It became my dad’s suggestion to basically finance my education, because I said I wanted to go back to school to get my master’s. He was like, ‘Yeah, why don’t you do it, so that you can basically finance your own education by running this Airbnb, and I’ll give you the building.’”

It took the two of them a couple of months to renovate and furnish the place. When they were done, Hosotsuji listed the building’s three bedrooms separately on Airbnb. She received her first booking five minutes later, and it has kept her busy ever since.

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“Just yesterday I had to go in between classes to run, make a bed, check someone in, and then go back to class,” she told me. “So yeah, it’s really crazy sometimes with scheduling.”

She also recently received ‘Super Host’ status on the platform, which means that she receives consistently high ratings from guests, never cancels a booking, and responds to requests within 24 hours on average. “I try to always respond as quickly as possible, even if I get one at midnight and I’m half asleep, I still respond,” she told me.

Throughout the frenzy, Hosotsuji notes a sense of community brought on by the Airbnb network.

“I’m in a global network now where I’m connected; it’s open, it’s a portal to the world. Which was really freaky for a second, but I’ve definitely gotten used to it a bit, just meeting people from all over the world and being like, ‘Okay, this is just the Airbnb network and community.’”

Exposure to perspectives from all over the world is not just a novelty to Hosotsuji. She explained that part of what she has learned in her master’s program is an appreciation for the various ‘truths’ that individuals bring to the table depending on their background and experiences.

“I think that by meeting people from all over the world, being able to be exposed to their truths… this is my… portal to the whole world and being able to understand people from wherever they’re from, whatever life journey they’re from, it certainly helps me better understand things and also just get a bigger lens of the world,” she said.

When I asked her how her listing relates to her program, Hosotsuji said, “I think that directly translates, in terms of hosting and Airbnb, because you’re hosting a physical space now, as well as the ambiance, as well as the environment, right? As well as the conversations with your guests, so I think it directly translated into something that became essentially a profitable form of [strategic design].”

Airbnb also enables Hosotsuji to attend her program full-time. “I think with this particular program there’s no way — they say you cannot do full-time with this program and do full-time work,” she said. Without her listing as a source of income, Hosotsuji would have had to take on her program part-time and look for consulting work on the side

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Instead, she is hosting individuals from around the world and applying lessons from the experience to her studies.

The end of the nine-to-five? 

The origin story of Airbnb is close to a modern legend; it epitomizes the nature of entrepreneurship in the digital age and, particularly, the apparent triumph of hard work and good ideas in the face of growing inequality.

About a decade ago, two roommates in their 20s, Joe Gebbia and Brian Chesky, were living in the infamously expensive San Francisco on tight budgets. Both designers with a flair for business, they wanted to create something new but held disdain for the seemingly endless cycle of waste that stemmed from developing ‘better’ stuff.

They also wanted to have enough money to pay rent.

So they made use of one of the most valuable commodities available to them: their apartment. The friends rented out three air mattresses on their living room floor when demand for short-term stays were high — during conferences in San Francisco, for instance. True to the ‘bed and breakfast’ meme, they also cooked morning meals for their first guests.

Then, of course, they scaled the idea, bringing in a third partner who was a skilled web developer and making their platform available to connect hosts and guests around the world. As of press time, Airbnb is active in over 34,000 cities, with over two million listings available; the company is worth over $30 billion.

There is no doubt that Gebbia and Chesky have enjoyed enormous success for their invention, but the circumstances which

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precipitated their idea weren’t exactly hopeful. Innovation in the San Francisco Bay Area has brought tremendous wealth to the region, which has pushed the cost of living up. This has posed a major problem because, though there is ample wealth in the city, it is far from evenly distributed. Individuals who have not shared in the most profitable aspects of the Bay Area find themselves relegated to the margins. Presumably, this is how educated people like Gebbia and Chesky found themselves in a bind to make rent.

The San Francisco-based news source SFGate reported in 2014 that the city’s Gini coefficient —  a number between zero and one that measures wealth distribution, with zero being completely even distribution and one indicating all wealth vested in one person — was very high at 0.523. This figure, which at the time was roughly equivalent to that of Rwanda, is just one piece of evidence out of many that indicate the spoils of wealth are not enjoyed evenly.

For all the success it has brought its founders, it is important to recognize that Airbnb was born out of a prohibitive cost of living in a city where wealth is highly concentrated. Gebbia and Chesky popularized the idea that a solution to this problem may be to commodify space that was previously thought to be private. Opinions undoubtedly differ as to whether this approach to our homes is a gain, a loss, or neither.

In Toronto, income inequality is not as high as it is in San Francisco, but it is still greater than the national average; Toronto’s Gini coefficient is around 0.4, according to Toronto Vital Signs’ 2016 report. Canada’s Gini coefficient is around 0.34, according to statistics from the World Bank. The Conference Board of Canada, a think tank, indicates that the Gini coefficient has been rising in Canada since the early 1990s, while the Fraser Institute, another think tank, published a report by U of T student Matthew Lau that says income inequality has been steady in Canada since the turn of the century.

Meanwhile, the price of housing is soaring in Toronto. On average, a one-bedroom apartment in the city costs $1,100 per month, while the average cost to purchase a home is $641,617.

It’s not stretch to suggest that the conditions in Toronto mimic those that gave rise to Airbnb in the first place: housing costs are high, as are rates of income inequality. Another factor at play may be the rate of unemployment among youth, which was recently reported to be over 20 per cent in early 2016.

In a setting where young people consistently find themselves without jobs in an expensive city, it would be unsurprising for them to turn to alternative revenue sources found in the sharing economy.

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Hosotsuji, however, thinks that there are other reasons that may compel young people to use Airbnb.

“This whole conversation around there’s no jobs, I don’t actually know if that’s true,” she says. “It could be that there’s a lesser amount of jobs available, so we’re resorting to these sorts of things like Uber and Airbnb, but I certainly think that the mentality is a big thing of why we resort to or why we choose these types of jobs.”

For Hosotsuji, the rise of Airbnb in cities like Toronto is not necessarily the result of a shortage of jobs; in her view, young people choose to work for themselves through platforms like Airbnb because they have a greater standard for job satisfaction than previous generations have had, and they seek to break away from the monotony of nine-to-five labour.

“So I think 10 or 15 years ago, people would just take the random jobs that they really [didn’t] like but they would deal with it; they would live with that job and they would go in day in and day out still hating their job, but that was just what the world was and people accepted that,” Hosotsuji posits.

She continues, “I think our generation is learning [that] we don’t want to repeat those mistakes, so then, we’re finding as a generation these new opportunities for us to be able to pay the bills and have a healthy lifestyle and make money but in a healthy way, in a fun way, which I think is kind of the emergence of Airbnb.”

A disruption in the housing sector

Not everyone is as optimistic about Airbnb and its opportunities as Hosotsuji. Most of the opposition to Airbnb in the city has come from those who see it as a threat to the fragile state of affordable housing and long-term rental availability in the city.

The Canadian Centre for Policy Alternatives (CCPA) released a report in September 2016 called Nobody’s Business: Airbnb in Toronto, which shows that rental vacancy rates are low in the areas of the city where Airbnb listings are the most common. “The increased usage of unregulated, short-term rentals could very well impact the supply of long-term rentals and increase the cost of the rest of the housing stock that is available,” a portion of the report reads.

The authors of the CCPA report caution that the term home sharing may not accurately describe some of the economic activity that takes place on the platform. According to the report, “13 per cent of listings are posted by a host who is listing more than one unit for rent, and those hosts who offer multiple listings account for 46 per cent of all revenue — making them more akin to commercial hosts rather than ‘home sharing’ hosts.”

The report also echoes statistics from the Ontario Non-Profit Housing Association, saying that 82,414 households were on the waitlist for affordable housing in the city of Toronto — a harrowing figure by any standard.

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One of the people to speak most publicly about the need to reign in the platform has been Toronto City Councillor Kristyn Wong-Tam, who serves Ward 27, Toronto Centre-Rosedale. She has called for regulation of the platform.

“It can literally destabilize an entire housing sector,” she claimed of the volume of Airbnb listings in Toronto, “and in the City of Toronto where people are already struggling with the rising cost of housing and accommodation, it could marginalize vulnerable people and often times this includes students who are tied to fixed incomes or they’re working precarious jobs to make ends meet.”

As councillor for the ward that includes Ryerson and part of U of T, Wong-Tam said that she regularly hears concerns from students about housing costs. In her view, housing and transit are the two primary municipal issues facing students today.

“Now I’m hearing that some of them are being asked to leave and they suspect that their landlord is not taking the unit back for their own personal use but rather, they suspect that they’re converting them to Airbnb,” Wong-Tam said. “There’s no document to prove [this], but I can tell you that it’s creating a lot of anxiety and fear amongst the students.”

The Residential Tenancies Act in Ontario affords landlords the right not to renew leases if they wish to retain their property for personal use. Converting a unit to a short-term rental would likely not constitute personal use and therefore, already be considered illegal. However, there is little clarity on this issue, since the provincial legislation does not refer directly to home sharing.

Hosotsuji agrees that the scarcity of rental apartments in Toronto is concerning. “We made the decision to go to Airbnb because we would make more money doing it,” she said. “Hearing that it’s actually become so explosive, that long-term rentals are going up, that does concern me, it does.”

She hopes that the city will be able to have dialogue that will help negotiate the valid concerns of short-term hosts, property owners, and long-term renters in the city. “It’s not about my problem versus your problem. It is a city problem, they’re all of our problems.”

As far as Wong-Tam sees it, casual hosts who are renting out spare rooms are not the cause of what she sees as a disruption in the stock of rental housing available. “So for the property owner that is simply renting out their rooms to supplement their incomes, whether it’s a student or a retiree, they’re usually not the ones that we have a problem with. Where I think we do run into a challenge is entire apartments, and I think it’s important to say that it’s entire apartments that seem to be the predominant choice out there,” she explained.

For these types of units, there needs to be “a set of rules and a set of operating conditions that are clear and transparent and that are fair,” she said. “I think we’re hearing loud and clearly from residents, as well as tenants who have lost their homes, as well as the hotel sector that they want clarity.”

Alex Dagg, Public Policy Manager for Airbnb Canada, has spoken to the topic of regulating the platform a number of times, saying that the company is open to discussions with cities. In her view, the core of the Airbnb community in Toronto is comprised of people who share their own homes fewer than 90 days each year.

“I’m in a global network now where I’m connected; it’s open, it’s a portal to the world. Which was really freaky for a second, but I’ve definitely gotten used to it a bit, just meeting people from all over the world and being like, ‘Okay, this is just the Airbnb network and community.’”

Dagg told Metro News, “That’s really an affordable housing strategy for the families that are using this platform,” pointing out that the typical host makes about $4,000 each year off of their listing.

It may be the case that some families are more easily able to afford their homes because of supplementary income through Airbnb, but I doubt that those advocating for affordable housing in Toronto will be touting home sharing as a broad solution to soaring home prices any time soon.

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Another reason Airbnb may welcome regulation of their platform is to glean clarity about which entity is responsible for the safety concerns of guests and hosts.

Hosotsuji has borne the brunt of tense encounters between guests. She told me about a time when she had a particularly rowdy male guest staying next to a young woman who was travelling to Toronto for a meditation retreat. The latter was deeply uncomfortable with the former’s behaviour and even came close to calling the police. To say that their personalities did not mix would be an understatement — both guests ended up leaving their stay early.

In Hosotsuji’s view, issues of trust are not uncommon on platforms like Airbnb. “I think sometimes I get challenged with trust, and I think they do too as guests… I might get a weird vibe on the first impression and then I realize, ‘Oh they’re cool, I can totally trust them,’ but there are sometimes… especially… as a woman host, sometimes I’m like, ‘Oh, I don’t know if I, as a host, feel safe with this guest.’”

In our discussion about regulation, Wong-Tam touched on a point about the standard to which hotels are held. “Hotels are largely regulated and they’re regulated because you have to keep people safe, so any client walking into a hotel is guaranteed a certain level of service. They know that the rooms are going to be properly maintained, the health and safety and building inspectors combing through, fire plans that are registered in case there’s an emergency evacuation procedures. All of that happens in a hotel.”

“All of that,” in Hosotsuji’s view, is unnecessary — or at least not as important as other factors when it comes to what motivates guests today. In her view, individuals are drowned in options for customized consumption. Within families, she notes, corporations try to sell every individual a different product, and the notion of sharing is consequently reduced. The nuclear family, she notes, is less prevalent than it once was. People seem to rely less fervently on social networks forged through local communities.

In this setting, Hosotsuji posits, people are starving for authentic connections and are no longer enticed by the offerings of hotels. “Before it was because they wanted a clean sheet every day and they wanted… luxury and now it’s like, ‘I don’t even care about that anymore.’ Our priorities… are changing because we want connection. Connection’s becoming more important than the luxury of towels and bed sheets.”

It is without a doubt that Airbnb has disrupted the long-standing assumption that hotels must dominate the travel industry. Wide use of the platform may also disrupt the housing situation of Torontonians and urban residents worldwide. While cities reckon how to construct a regulatory climate around the platform, Hosotsuji and others like her are using it as a portal to a global community — and to make some cash.