Airbnb is causing higher rents and house prices in Toronto
Whether you're spending half your salary on a dingy basement, sharing a tiny sky box with your ex, or — god forbid — looking for a new apartment in post-rent control Toronto (one that doesn't have cockroaches and also fits a bed), you can justifiably be mad at Airbnb. Real mad.
The wildly-popular vacation rental platform is hurting more than the hotel industry, according to a new study out of McGill University: It's driving up rents and home prices like mad.
What's notable about the McGill report, hailed as "groundbreaking" by The Globe and Mail, is that it's the most comprehensive analysis of Airbnb's impact on housing supply in Canada to date.
"More than 31,000 homes across the country were rented out so often on Airbnb in 2018 that they were likely removed from the long-term rental supply," explains the Globe, which obtained an exclusive copy of the report.
"As the popularity of short-term rentals has soared, the effect on rental supply in Canada’s cities, towns and rural areas has grown... even as local officials implement rules that target the short-term rental industry."
Indeed, new rules targeting Airbnb-lords were supposed to have come into effect across the City of Toronto last summer, but their implementation was delayed by procedure until at least the end of August.
The rules, which have already been approved by City Council, will require anyone renting out a short-term space in their homes (and only the homes they own) to register with the city. They'll also restrict the amount of time anyone can rent a space in their home out to 180 nights per year.
City councillors asked Airbnb, specifically, to start playing by the rules preemptively in January, but unregulated "ghost hotels" remain a huge problem for condo boards and regulators alike.
Oh, and us, the people who actually live in Toronto. We're feeling the effects of people buying up vacant units only to rent them out to tourists for a few days at a time as well.
“They can operate their platform in a manner that will provide housing stability in our city, as well as neighbourhood safety. They’re choosing not to.” - Toronto city councillor @joe_cressy https://t.co/stNbflbUJj— The Walrus (@walrusmagazine) June 20, 2019
"In 2018, the platform had a daily average of 128,000 active listings in Canada," writes the Globe and Mail of Airbnb, noting that a lack of rental construction, fast population growth and high home ownership costs are also to blame for the housing shortage.
That's an increase of 25 per cent in active listings year over year, according to McGill researchers. Airbnb hosts also saw a 40 per cent increase in their earnings between 2017 and 2018 with a whopping $1.8-billion in revenue earned across the country.
The report's authors do concede that homes frequently rented through Airbnb are "still a small fraction of total housing" in Canada, but also note that listings tend to be highly-concentrated in busy urban centres.
"The Montreal, Toronto and Vancouver areas accounted for close to half of Canada's average daily listings in 2018, and hosts there brought in $710-million, up 27 per cent from 2017," reads the article based on the McGill study.
"They’re also where the most rental supply is under threat: Forty per cent of the roughly 31,000 homes that were frequently rented last year were found in those cities, amounting to more than 12,000 'lost' housing units."
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