Short-term rentals are long-term problem

You can almost smell the desire for escape on the warming air as vacation season approaches.

The scent can be a stinker, though — for those who can afford to plan an escape and those who can’t.

Compared to last year, Statistics Canada reports the second hottest driver of inflation in the country after mortgage interest costs (up 28 per cent) are travel services (up 16 per cent). Air travel prices may have moderated, but accommodation is still pricey — and hard to find for travellers. It’s even more so for people who actually live in a “worldclass city.”

Increasingly, more rental units are being taken off the market than added to it in Toronto as Airbnb, Booking.com, VRBO, Kijiji and other platforms perform matchmaking for people on the move but drain the market for people who need stable, affordable housing.

According to Toronto’s “Housing Data Book,” the city added 15,000 new rental units in 2022, which is about half what was added in 2015.

But just one platform, Airbnb, now has 16,000 available units in the city. Short-term listings on Airbnb are up 11 per cent over the last year, while so-called “long term rentals” skyrocketed by 80 per cent. The data, compiled by Murray Cox at

insideairbnb.com, shows there were 4,618 short-term listings and 11,341 long-term listings on Airbnb on May 12 this year in Toronto. The city defines “short-term” as anything under 28 days, and it is legally required to be the principal residence of the owner in Toronto since January 2021. Instead of delisting multiple properties owned by investors, Airbnb shifted listings to the 28-days-plus category to comply with regulations.

Airbnb is not the only platform in town, but shares its data to facilitate compliance unlike many other platforms. These numbers reflect only a fraction of how the rental market is shifting. The trend is worrying.

Airbnb started out in 2007, tapping into the idea of the so-called sharing economy: use your asset (a garage, a room in your home, or even the whole house while you’re away) to make a little extra cash, only when it suits you. According to a report from Airbnb watchdog Fairbnb.ca, a decade later only two per cent of hosts in Toronto accounted for that model of sharing, while 52 per cent of revenues were generated by hosts with multiple listings.

Far from a backup income source for homeowners, this business model is turning more of our homes into commodities, right when we need more homes for more people.

With every passing month, the math gets more difficult to resist for landlords, whose carrying costs are up at least 30 per cent from last year — mostly due to central bank rate increases — but, given demand, can charge more than double for the same unit when listed short-term.

And if you are also a landlord waiting interminably for the Landlord and Tenant Board to resolve a dispute with a tenant in arrears or who has damaged a property, the shift from “landlord” to “host” is even more enticing: it bolsters owners’ rights and reduces their responsibilities while doing exactly the opposite for tenants.

There are no rent controls on “hotel” stays. There is almost no enforcement of regulations and delayed access to due process. With a growing population of residents, a surge in post-pandemic tourists and stalled construction of new supply, Toronto’s rental real estate market is a mess.

Let me be clear: short-term rentals aren’t the only factor squeezing the availability and affordability of rental housing. But short-term rentals are a long-term problem for the mayor we will soon elect. Young people are putting off life-shaping decisions, and businesses are finding it increasingly difficult to attract and retain workers.

Short-stay platforms are behaving as most corporations would, adding units to its roster, seeking higher profits. Last year Airbnb alone added 5,040 available “long-term” units. Toronto says it had 3,442 purpose-built rental units under construction in 2022, of which 836 were “affordable.”

You can’t take more property off the market in a single year than you can reasonably build and say the problem is supply. It takes years of construction and capital to build a new rental unit. If we simply stemmed the siphoning of existing units to the non-permanent part of the rental market, we’d need to build far less.

Key fixes that need to happen include:

■ More rigorous enforcement and tightening loopholes in Toronto’s existing rules designed to limit multiple listings.

■ Provincial rules, as in Quebec, requiring more accountability by all platforms, across all cities, registering legit operations in compliance with the rules, and taking down non-compliant ones.

■ Adding staffing to clear the backlog at the Ontario Labour Tenant Board (there are currently 38,000 landlord and tenant disputes taking an average eight months to resolve).

■ Federal financial assistance to offset rising borrowing costs, triggered by the fight to tame inflation, to ensure that no construction of affordable rental stock is delayed. The pressure is building. Home to more than 3 million people, the Census Metropolitan Area of Toronto added almost 70,000 residents last year. According to the Toronto Regional Real Estate Board, only 19,500 apartments and townhouses were listed for rent in the first three months of 2023. Average rents on those units were up between nine and 20 per cent from last year, depending on the size of unit. Do you know anyone who has seen that kind of increase in their income lately? Me neither.

As Canada’s biggest and most economically powerful city, we can’t afford to hear people say: “Toronto’s a nice place to visit, but I wouldn’t want to live there.”

ARMINE YALNIZYAN IS A LEADING VOICE IN CANADA’S ECONOMIC SCENE AND ATKINSON FELLOW ON THE FUTURE OF WORKERS. SHE IS A FREELANCE CONTRIBUTING COLUMNIST FOR THE STAR’S BUSINESS SECTION. FOLLOW HER ON TWITTER: @ARMINEYALNIZYAN. YOU CAN WRITE TO HER AT AYALNIZYAN@ATKINSONFOUNDATION.CA