Renters in Toronto are really missing the city's pandemic-era pricing, when we had it made with cheaper apartments than elsewhere in the GTA, landlords offering free rent and other perks, and rates lower than we'd seen in years.

As we get further from that heyday, the city's cost of living has shot back up to preposterous levels, with tenants now handing over about $2,600 per month for a one bedroom unit, and $1,30o for a bedroom in a shared apartment.

Having to share bedrooms with strangers is the new thing due to Toronto's unaffordability https://t.co/WNjB5kr1AT #Toronto

— blogTO (@blogTO) August 10, 2023

This is largely due to inflation and ever-higher interest rates that have small landlords scrambling to pay their own bills, either jacking up rents as much as they can as a result or becoming renters themselves and adding more demand to an already-squeezed market.

Another factor that some are now pointing to is the vast number of short-term rentals in the city, with Airbnb actually having to issue a statement to assure the public that there is "no proof" it is at all at fault for the skyrocketing price of housing in Canada.

But, research has shown that when a city gets more short-term rental listings, rent prices for those who live there do in fact spike.

This is insane, totally out of control

— Tweet Tweet (@tweet_tweet_69x) August 2, 2023

As one piece in the Harvard Business Review says, the convenience and earning potential of short-term rentals can cause some landlords to "switch their properties from long-term rentals, which aer aimed at local residents, to short-term rentals, which are aimed at visitors."

That study found that a one per cent increase in Airbnb listings in any given locale is causally associated with a 0.018 per cent hike in rental rates and a 0.026 per cent jump in house prices — which adds up quickly when the number of Airbnb listings grows by about 44 per cent each year.

A more local analysis found the numbers were even worse here in Toronto, with long-term rent rates climbing 0.09 per cent for each one per cent rise in Airbnb listings per square kilometre.

The piece, published in The Conversation this month, explains how the platform is leaving fewer units for actual residents and gentrifying  neighbourhoods, both of which drive up prices. (Researchers found for every 10 per cent loss of available units in a square kilometre, rent prices went up by 3.1 per cent).

A study of Toronto's rental market and Airbnb listings by @DeGrooteBiz researcher Iman Sadeghi found Airbnb is reducing the supply of available long-term rentals, and fuelling the gentrification of neighbourhoods. https://t.co/lKG5b22I5C

— McMaster Media (@McMasterMedia) August 14, 2023

The proliferation of short-term rentals also prompts big developers and their investors to make new builds more Airbnb-friendly, if not completely cater to potential Airbnb hosts as buyers by design — so much so that trying to cut down on Airbnbs in a city can actually paralyze new housing development.

While an influx of tourists brings undeniable financial gain to the city, it's clear that there are some very detrimental impacts of permitting the short-term rental industry to have such a significant and expanding hold on the market.