EXPLAINER: How Airbnb and short-term rentals have decimated housing in Canada

From Quebec to B.C., what is being done to demand accountability?
Photo: Ghost hotel: A Toronto condo with numerous lock boxes for Airbnb keys. Photo via Reddit

HELP MAKE THIS JOURNALISM HAPPEN! Ricochet and Pivot are investigating Airbnb and short-term rentals.We recently launched a groundbreaking project that will tell the story of how short-term rentals have impacted Canada’s housing market. We’re hiring reporters across Canada to investigate this summer, but we need your help to make this critical public-interest journalism happen. Please click here to make a donation today.

Your ad here
Don't like ads?
Automated ads help us pay our journalists, servers, and team. Support us by becoming a member today to hide all automated ads:
Become a member

Quebec wants short-term rental platforms, like Airbnb and VRBO, to be held responsible for ensuring the homes and apartments advertised on their platforms are legal and registered with the government, or face fines of up to $100,000. The proposal is the toughest legislation in the province — even the entire country — to date.

Bill 25, an Act “to fight illegal tourist accommodation,” is the latest in a series of attempts by the Quebec government to pull in the reins on the industry, dubbed “a wild west,” by David Wachsmuth, associate professor of urban planning at McGill University whose research focuses on the impact of short-term rentals on Canada’s housing market.

As many as 31,000 homes have been taken off the long-term housing market and converted to short-term rentals in Canada, according to Wachsmuth’s 2020 study. It shows that short-term rentals are not distributed evenly across Canada. They are often concentrated in neighbourhoods with strong public transit and access to downtown amenities and, as a result, have had deep and lasting impacts on local rental markets.

In Montreal alone, there are currently about 8,000 listings on Airbnb, according to Inside Airbnb, a website that monitors Airbnb data internationally.

The bill was tabled in May by the Quebec Minister of Tourism, Caroline Proulx, on the heels of a structure fire in Old Montreal that killed seven people — six of whom were staying in illegal Airbnbs. While there is hope that the law, this time around, might have a stronger impact, some housing advocates are calling for stricter controls.

“Airbnb takes no responsibility, zero responsibility, and they ought to be liable. They absolutely know what's going on. And they're just completely lacking responsibility and accountability.”

Cedric Dussault, co-spokesperson for the Coalition of Housing Committees and Tenants Associations of Quebec, known by its French acronym RCLALQ, told Ricochet in April that short-term rental platforms like Airbnb are connected to the lack of affordable housing in the province and an increase in the number of evictions of tenants from affordable apartments.

“RCLALQ is asking for a complete ban of these platforms,” said Dussault.

A long history of toothless legislation

In April 2016, Quebec became the first province in Canada to pass legislation aimed at regulating short-term rentals within its borders.

That law required hosts to register with the Corporation de l'industrie touristique du Québec (CITQ) if they wished to rent units outside of their primary residence. They then had to pay a hotel tax and display their certification number on listings advertising their rental.

In June 2018, Revenu Québec had 25 inspectors working across the province, authorized to issue fines for noncompliance as high as $50,000. However, after nearly a year on the job, not one fine had been issued, and the number of illegal rentals exploded. Slowly, the rules have come to be enforced, but the sheer number is impossible to control.

“The province inspected something like 3,000 units last year, but there are more than 13,000 Airbnbs in [Montreal] and over 90 per cent of them are illegal,” said Craig Sauvé, a city councilor in Montreal’s Sud-Ouest borough, in an interview with Ricochet in April.

“Airbnb takes no responsibility, zero responsibility, and they ought to be liable. They absolutely know what's going on. And they're just completely lacking responsibility and accountability,” he said.

Following the deadly fire in Old Montreal, Airbnb removed listings in Quebec that didn’t display a license with the CITQ, and there was a dramatic drop in the number of listings. According to Inside Airbnb, more than 7,000 disappeared in the blink of an eye, representing more than 50 per cent of Montreal’s short-term rental stock on the website.

However, the drop in illegal short-term rentals coincided with more than a thousand new listings, which used duplicate CITQ numbers. As of “March 29, there were 2,209 listings using a duplicate CITQ license,” tweeted Inside Airbnb, after digging through their data. “The most widely used potentially fraudulent license # is "300481," which is used 55 times. The list goes on, and on, and on. "123456" was used 29 times, and "0" was used 10 times.”

Murray Cox, founder of Inside Airbnb, said Airbnb and other short-term rental platforms have largely been expected to self-police.

“To some extent, the threat of Bill 25 and the scrutiny since the fire has already built in a degree of self-regulation… from Airbnb and Airbnb hosts,” said Cox. “However without tighter regulations and enforcement mechanisms, this allows hosts to do as they please on other platforms who aren't under the same scrutiny.”

“Another issue is that in the past, platforms like Airbnb have self-regulated, and then back-pedaled when there was talk of tighter restrictions on short-term rentals,” he added, which is what happened in New Orleans back in 2018.

“Platform negotiation or self-regulation doesn't work,” he said.

A memorial at the site of the fatal Montreal fire that killed seven people in an illegal Airbnb.
CBC screenshot

While Bill 25, in theory, will require Airbnb and other short-term rental platforms to authenticate that listings on their websites are registered with the CITQ or face hefty fines, the impact will only be known once the bill is passed. For the time being it is extremely difficult to verify the validity of the permit numbers provided, since those linked to a rental which also doubles as someone’s main residence are not listed on the CITQ’s website.

Quebec’s new law still lacks teeth

Airbnb is a fact of life across Quebec, from urban centres to tourist hamlets and everything in between.

In March, the Loi sur l’hébergement touristique came into effect. This law allows homeowners to rent their principal residence on a short-term basis anywhere in Quebec. Anyone offering a rental that is not in their principal residence is now considered to be operating a hotel or other tourist accommodation and must comply with the same municipal zoning rules and regulations.

Under the terms of this law, municipalities may no longer use zoning regulations to prohibit short-term rentals in principal residences. In effect, the government has given municipalities two years to adopt regulations limiting, but not prohibiting, Airbnb-type rentals on their territory. So far, few municipalities have done so.

The new regulations require people who wish to rent short-term, even if it is in their main residence, to register with the Corporation de l'industrie touristique du Québec (CITQ). Last March, Airbnb committed to removing ads from its platform that did not display a permit number issued by the CITQ.

Despite this commitment, 30 per cent of listings in Quebec City, for example, still do not display a CITQ permit number, according to data from InsideAirbnb. Even those that do display a permit number may not be all that they seem. It is difficult to confirm the validity of a permit number, and some of the numbers provided are simply sequential series’ of numbers, eg. 123456.

If Quebec’s new legislation is adopted, it would oblige the platforms to eliminate listings that lack a valid permit number.

Signs in the lobby of a condo reminding residents that short-term rentals are not allowed.

But even legal short-term rentals have an effect on the housing crisis by subtracting these units from much-needed rental stock, explains the Regroupement des Comités Logement et Associations de Tenants du Québec (RCLALQ) in its recent report on the Airbnb phenomenon.

In many regions and urban neighborhoods, the percentage of units offered on short-term rental platforms exceeds the local rate of unoccupied units available on the long-term rental market.

Airbnbs are ubiquitous in Eastern Quebec

"It's growing rapidly," said Alexandre Cadieux, a spokesperson for the Comité logement Bas-Saint-Laurent, explaining that there are more and more short-term rentals in his region.

The situation is worse in rural areas, he explains, because in certain tourist areas, such as Kamouraska, these listings represent a larger proportion of the overall rental stock.

The housing crisis is hitting hard in Rimouski and the surrounding area. "It's worse this year," he laments. He also notes an increase in attempts by landlords to repossess rental housing for dubious reasons.

The phenomenon of short-term rentals has coalesced around large operations in the hands of a small handful of big players, according to the RCLALQ report.

In the Gaspésie-Île-de-la-Madeleine region, 7.67 per cent of Airbnbs are operated by the top 5 Airbnb “hosts.” In this region 76 per cent of listings are illegal, according to RCLALQ’s data.

Always teetering on the verge of homelessness in Toronto

More than 10,500 people are currently unhoused in Toronto, according to City data. However, it’s an incomplete picture — showing only those who have managed to access shelters, not those turned away and left to survive outside, invisible to city officials.

Many of those forced into homelessness because of an overwhelmed and overcrowded shelter system report being renovicted, or priced out of their apartments, often so landlords can turn around and hike rents. And since the launch of Airbnb in 2008, a significant amount of housing stock has been converted into vacation rentals — forcing Torontonians to increasingly compete with tourists for a limited number of units once considered affordable apartments.

“In Toronto, Airbnb hosts are sucking up [housing] stock faster than it can be built.”

That has had a seismic impact on the housing market in Toronto, especially in downtown neighbourhoods, where bidding wars for rental properties are now common and rents have skyrocketed more than 20 per cent in one year.

Right now in Toronto, there are more than 20,000 listings, according to Inside Airbnb.

To try and crack down, the City passed a new short-term rental bylaw in 2021 defining short-term rentals as all rentals under 28 days. Torontonians can only rent their principal residence and they have to register with the city — a move aimed at stopping people from owning multiple Airbnbs. The bylaw limits rentals to 180 days out of the year for an entire principal residence, with no limits at all on the rental of up to three individual rooms in a principal residence. The owners of illegal units can face a fine of up to $100,000.

But Airbnb was able to find a loophole. Instead of cutting down on non-compliant units, Airbnb simply shifted that stock to long-term rentals, positioning itself as a direct mediator between landlord and tenant, leaving tenants significantly more vulnerable to mistreatment and eviction.

Airbnb’s inventory went from 75 per cent short-term units and 25 per cent long-term units to 75 per cent long-term units. “Over 16,000 of those listings are unregulated that could be made available in a way that people could actually afford,” said Fairbnb Canada researcher and advocate Thorben Wieditz. Without a system of registration, he said, “we don’t actually know what’s happening.”

Wieditz said what’s happening in Toronto is somewhat unique in Canada.

“We haven’t seen this emergence of long term rentals on platforms in a lot of cities,” he added, speaking to the rest of Ontario and the country. “It’s only happened in cities that have passed very strict regulations where Airbnb then came back and found a way of keeping their inventory by changing the booking terms to a number that allows them to circumvent the 28 day rule.”

Tianning Ning and her family moved to Toronto to take a teaching contract, but the only affordable apartment they could find was a long-term Airbnb. Unfortunately, Toronto's loophole allowed the landlord to issue an early eviction. Also pictured: Fairbnb Canada's Lis Pimentel
Anupriya Dasgupta

Of the 20,000 listings for Toronto, 15,000 are long-term rentals.

That is putting people, especially newcomers, in very precarious situations.

Tianning Ning’s family moved to Ontario from Switzerland for a year-long contract position at York University, however due to rental limitations they had to settle for a 10-month long-term Airbnb contract.

In January, the family was given an eviction notice to leave the property by the end of the month. The standard rental agreement in Ontario requires landlords to provide a 60 day notice.

When Ning fought back, the landlord took the issue to the Landlord and Tenant Board, where they are still awaiting a ruling. In the meantime, while the case is still being deliberated, the landlord moved into the house next door and launched a series of intimidation tactics against Ning’s family that included changing the locks of the house and refusing the family access to their own belongings.

“I feared for my personal safety. Our family had become homeless,” Ning said at a press conference last week.

“We are not travelers. We have a work permit — both my husband and me. Our children go to local school and [the landlord] knows this from day one. She just took the law in her own hands, removed all of our belongings, [and] loaded them on a trailer heading for a locker near the airport.”

Ning also did not receive any support to protect her family from her landlord’s behaviour.

“I feared for my personal safety. Our family had become homeless.”

“The Residential Tenancy Act is strong on paper but weak in practice,” said Jessica Bell, MPP for University—Rosedale and Ontario NDP housing critic.

“Ning should be able to call a bylaw officer and have [them] investigate this issue and charges should be laid if there is wrongdoing. Unfortunately the Landlord and Tenant Board is not working.”

The issue presents “a legal gray area,” Weiditz added. “People have figured out how to get around regulations, how to get around the RTA, and how to make a lot of money off people’s backs who are desperate to find a place to live in cities like Toronto.”

Housing or hotels?

In Toronto, nearly 50 per cent of all residents are renters.

“If those 15,000 long-term rentals on Airbnb were to convert into legit long-term rentals, that would add so much stock that it would reduce the pressure on how much rents are rising,” economist and Atkinson fellow Armine Yalnizyan told CBC. “That would have a ripple effect on real estate markets throughout the country.”

Yalnizyan said that, in less than one month alone, 2,000 new long-term listings were added to Airbnb in Toronto. “In Toronto, Airbnb hosts are sucking up [housing] stock faster than it can be built.”

Canadian housing activists have demanded for years that governments declare housing to be a guaranteed human right for all.
Right to Housing

At the same time, the Globe reports that more than 40 per cent of condominiums across Ontario are investments rather than homes.

This has directly impacted the dwindling availability of units, and that scarcity continues to drive up the rental market, leaving renters with few options.

The national housing vacancy rate almost halved between 2021 and 2022 and fell to an almost-historic low. In Toronto, the rate dropped from 4.4 per cent in 2021 to 1.7 per cent in 2022.

Yalnizyan said this should not be happening in Canada. Of the 37 wealthiest countries in the world, Canada is at the bottom for building and maintaining social housing.

After the new bylaw passed, more than 90 per cent of hosts hadn't registered their units within weeks of the deadline, and among thousands of illegal Airbnbs in operation, only a handful of hosts actually faced any charges.

As of January 2021, there were as many as 17,000 illegal listings in Toronto.

“Former ghost hotels that were used exclusively as short term rentals commercially have now been converted into these long-term listings, so they exist now and provide a pool of accommodation that is only available through the platform, and presents these challenges that we see now,” said Weiditz.

Through platforms like Airbnb, he said, landlords have been able to circumvent the legal protections in place through Ontario’s Residential Tenancies Act and through a standard lease.

“Former ghost hotels that were used exclusively as short term rentals commercially have now been converted into these long-term listings, so they exist now and provide a pool of accommodation that is only available through the platform, and presents these challenges that we see now.”

And there’s no obligation on the part of platforms like Airbnb to make sure a listing is following the rules before it goes live, then-city councillor Kristyn Wong-Tam told CTV News in 2021.

“We have to go off and investigate, as opposed to them proactively not allowing people on the platform to start with,” she said. “If we have to do it and comb through the thousands of listings, we don’t have the resources nor is it sustainable or realistic.”

New regulations on the horizon in British Columbia

The way short term rental properties are regulated in B.C., much like in the rest of Canada, is a fragmented affair, but there are signs of a more centralized approach to come.

B.C.’s new housing minister, was asked to help municipalities better regulate short term rentals as part of his mandate letter in December. After the deadly fire in illegal Montreal Airbnbs prompted Quebec to table new legislation targeting similar listings, Kahlon says B.C. will work on the same thing this year.

“We know we need greater reform when it comes to short term rental. We are losing way too much of our housing stock for short term rental,” Kahlon said in response to a question from Ricochet at a June 7 press conference. “Later this year we’ll be bringing in measures to bring more of that housing stock back into the housing market, at the same time ensuring that the communities that depend on tourism can continue to have that important service available for them.”

Currently B.C. collects up to 11 per cent tax on Airbnbs, and has taken a few other piecemeal steps to regulate short term rentals over the years.

In 2018 B.C. set the maximum allowed fine for illegal short term rentals at $1,000 per day, up from an initial $200 per day which was deemed insufficient.

Vancouver Tenants Union members disrupted the BC housing minister’s press conference last week to talk about the provincial government's plans to force through more luxury housing construction, which is driving low income renters out of Vancouver.
Vancouver Tenants Union on Twitter

As of November 2022, stratas are no longer allowed to ban long-term rentals (but can still ban short-term ones). And earlier this year, the province stepped in to allow Vancouver to levy a special 2.5 per cent tax on hotels and other short term rentals until January 2030, with the revenue paying for major tourism events like the 2026 FIFA World Cup.

But for the most part, the province has left creating and enforcing the rules to municipalities and stratas, which hash out disputes on a case-by-case basis.

Cities like Vancouver and Victoria — the two most expensive in B.C. with some of the lowest rental vacancy rates in the country — have bylaws that aim to limit the proliferation of short term rental units. For example, homeowners and tenants in these and other municipalities are allowed to list only their primary residences as a short-term rental — investors who own the property but don’t live on the premises legally cannot.

But, as the housing ministry has acknowledged, municipalities have not been enforcing these bylaws for a lack of adequate tools and resources.

As a result, the most recent data from independent watchdog Inside Airbnb shows nearly a third of all Airbnbs in Vancouver are unlicensed, and licensing data is entirely unavailable for Victoria and other B.C. cities including the surrounding Lower Mainland.

“We know we need greater reform when it comes to short term rental. We are losing way too much of our housing stock for short term rental.”

Calls from housing advocate Rohana Rezel to disclose Airbnb host databases in Vancouver have also been met with resistance from both the city and Airbnb, despite an official ruling from BC’s privacy commissioner ordering this disclosure.

While the number of short term rental listings in Vancouver dipped from nearly 6,000 in 2020 to 2,364 in January 2022 — likely as a result of the pandemic — the most recent available information from Vancouver’s website shows an uptick to 3,860 active listings as of June 1, 2023.

When asked whether B.C. plans to share data on how many tenants have been pushed out to make room for Airbnbs over the years, Kahlon essentially said no.

“It’s hard to collect that data right now. It is certainly a challenge— one of the conversations I had with the minister from Quebec [was] on how they are collecting that information,” Kahlon said, but did not elaborate on this conversation. “There are many organizations that have done kind of rough napkin numbers, but… it is significant numbers of units…we have our eyes set on reforming that.”

Meanwhile, stories about long term tenants being kicked out illegally to make space for short term rental units have surfaced across B.C. over the years, with owners continuing to operate despite suspended licenses and repeat warnings from bylaw officials.

This investigation will look at what the “rough napkin numbers” say about B.C.’s rental market, the people creating the policies and those impacted by them, and solutions posed by experts ahead of the upcoming promised legislation on short term rentals.

Have you been renovicted from your apartment, then later found it on Airbnb? Are you a former employee of Airbnb and have information to share? Email our team at editor@ricochet.media

Want to help fund this public interest investigative journalism? You can do that right here.

You might also be interested in...
For Indigenous communities in Alberta, the oil industry has left an ugly stain
Brandi Morin
December 6, 2023
VIDEO: Thousands fill the streets of Canadian cities demanding an immediate ceasefire in Gaza
Zachary Ruiter
November 11, 2023
British Columbia cages Airbnb, as speculators cry foul
Ryan Hook
November 1, 2023