As Toronto moves to strengthen its short-term rental regulations, investing in enforcement, and hiring new staff to police Airbnb users, seemingly illegal units are still easy to find for anyone with a laptop and some free time. 

Short-term rental hosts in Toronto are only permitted to rent property that is their single principal residence. Hosts are also prohibited from renting out “secondary suites,” like basement apartments in homes, if they occupy the rest of the property. In theory, the regulations should prevent property owners from converting rental housing into full-time Airbnb units.    

In reality, hosts still use Airbnb to rent out their basement and lower-level apartments, turning the units into landing pads for travellers. A Google search for listings containing phrases like “I live upstairs” or “We live upstairs” yields dozens of hosts telling prospective guests they live on-site, and apparently admitting to violating the city’s restrictions on secondary suite rentals.

“Short term rental hosts in Toronto are figuring out what they can get away with,” said David Wachsmuth, an associate professor at McGill University and expert on short-term rentals.

Ricochet located dozens of listings — some shaggy and modest, some modern and neat, but all with full kitchens, bathrooms, and the hallmarks of the apartments renters scramble to find amidst the city’s ever-worsening housing crises. The units are tucked in homes across Toronto in some of the city’s most desirable neighbourhoods. 

The listings suggest many single units, operating on the edges of municipal regulations, have so far side-stepped the city’s various regulatory updates, tweaks, and crackdowns. 

“Short term rental hosts in Toronto are figuring out what they can get away with,” said David Wachsmuth, an associate professor at McGill University and expert on short-term rentals. 

With ghost hotels prohibited, but likely still present, a prevalence of individual unit operators pushing the regulatory limits suggests the city’s principal residence requirement “has been broadly effective” at stamping out the players seeking to exploit larger portions of the rental market. 

“That’d be… an optimistic read on the situation,” said Wachsmuth.   

City staff investigating lower-level listings 

The Airbnb rental in the basement of Lise Drouin’s Salem Avenue home funds her travels to places like Thailand and Peru, which she’d visited just before speaking with Ricochet. Although she sometimes uses the basement to exercise or store food, a locked door separates the unit from the rest of the house when travellers reserved the space.

“They don’t rent my house,” Drouin said. “They rent the basement.”

Lise Drouin’s Salem Avenue unit as it was previously listed with the stove and full fridge.

Last week [June 18], the city said it was revoking the short-term rental registration for Drouin’s address, citing “principal residence concerns” and a failure to comply with the Toronto Municipal Code. 

Ricochet previously asked city staff if Drouin’s unit and four others violated the city’s secondary suite regulations. In descriptions of all five rentals, the hosts wrote that they lived above the available unit, most of which are advertised as basements apartments. 

City spokesperson Elise von Scheel said the city had “concerns” with each of the five listings, and another spokesperson said last week [June 18 ] the other four were still under investigation. 

As of June 25, the unit is still online with dates available. The current listing shows a gap where the stove previously was in the kitchen.

Lise Drouin’s unit is still available on Airbnb but without the stove, despite the host’s short-term rental registration being revoked.

The listings also include a two-bedroom unit at 15 Janus Court, near Toronto’s northern boundary, with a large, leafy backyard. The host described a fully-furnished apartment with a well-equipped kitchen, dining area, two queen-size beds, and a sofa bed, adding, “This is a secondary suite of the house in which I live upstairs.” 

Another listing advertised a one-bedroom basement apartment with a backyard hot tub in the city’s east end. A third listing promised private access to a basement suite a short drive from Pearson Airport. 

Basement units in regulatory grey area

City spokesperson von Scheel said in an email 21 new staff will be added to the city’s Municipal Licensing and Standards division, who will enforce short-term regulations, following a recent council vote in favour of increased oversight. The positions will be funded through more than $2 million in increased licensing and registration fees, von Scheel said. 

In April, council also adopted a definition of “principal residence” that specifies it “cannot include another space on the same property as a proposed or existing short-term rental” if that space is also a “dwelling unit” — a stand-alone living accommodation with “sanitary facilities” and space to cook.

In emails to Ricochet, the city reiterated that a host can only rent out a secondary suite, such as a basement, if it is their principal residence. Exactly how a home’s layout can affect this ostensibly clear cut rule seems to be an open question among city officials, particularly when a host lives on a home’s upper levels and rents out a basement unit separated from the rest of the property by a door. 

Spokesperson Shane Gerard said an inspection would be necessary to determine whether such a unit complies with current city regulations. 

Toronto councillor Gord Perks, chair of the city’s Planning and Housing Committee.

Gerard also said if an open door — or no door at all — separates a basement apartment from the rest of a home, the unit would likely qualify as a partial unit. Units like those identified by Ricochet may qualify as partial units if they are “not self-contained,” Gerard said in an email, adding that an inspection would be necessary to determine compliance. Hosts can rent out partial units, such as spare bedrooms, for an unlimited number of nights annually (hosts renting their entire principal residence are limited to 180 nights per year). 

The definition of dwelling unit, set to take effect on June 30, would “provide more clarity,” Gerard said, without clearly stating whether a basement apartment separated from the rest of a home by a door would comply with the city’s new regulations.  

Ricochet contacted several hosts who appeared to be offering basement or lower level apartments in their homes. Many declined to comment, or said their units complied with city regulations.

One host, who chatted briefly with Ricochet via Airbnb’s messaging service, said their basement suite connected to the rest of the house via a door that remained closed when guests were on-site. Otherwise, the unit, with a bathroom, kitchen, washer and dryer, served as a TV room, the host said. 

‘You’ve taken the stove out

The updated principal residence definition eliminates ambiguities in the requirement that hosts only list spaces where they also live, but is a watered-down version of what staff recommended to councillors.

In a March report, staff recommended councillors affirm that a host’s “principal residence” cannot include a short-term rental unit at the same location if that space “could readily be modified to” qualify as a dwelling unit.

“They wanted the discretion to be able to go in and say, ‘I am a professional. I recognize this as a dwelling unit. Even if you’ve taken the stove out, you could easily put it back in” said Parkdale-High Park councillor Gord Perks, who chairs the city’s Planning and Housing Committee. 

A motion from Councillor Brad Bradford to delete the phrase “or could readily be modified to meet” from the definition of “principal residence” passed 6-1, with Perks the lone dissenting vote. 

“They wanted the discretion to be able to go in and say, ‘I am a professional. I recognize this as a dwelling unit. Even if you’ve taken the stove out, you could easily put it back in” said Councillor Gord Perks. 

“I wanted to ensure the by-law allowed for fair, clear enforcement, with the ability for staff to focus on the worst actors operating ghost hotels out of downtown condo towers,” Bradford said in an email statement to Ricochet

“I put forward these amendments to provide clarity for staff by removing a clause that was undefined and left a lot of room for interpretation and conflict.”

Units still available 

The city will enact updated short-term rental regulations, including new definitions of principal residence and dwelling unit, on June 30. 

As of September, the city will also require hosts, on request, to provide documentation in addition to government ID to verify their principal residence. The city says staff may also interview some hosts in-person to determine their eligibility to list a short-term rental unit.

Additional regulatory changes will follow in January. 

It’s not clear how many units are currently flouting the city’s secondary suite regulations, though Perks believes it’s likely a “tiny slice” of the city’s housing.

For now, they remain available for rent on Airbnb.