There are no silver bullets when it comes to housing affordability in Canada. But there are still some live rounds lying around, if governments can find the stomach to actually pull the metaphorical trigger. Ideas like taxing capital gains on people’s principal residences are probably off the table, if only because the politics would be so obviously and immediately suicidal. Properly regulating short-term rental services like Airbnb and Vrbo, on the other hand, is worth a shot, and the impact would be felt almost immediately.

This is hardly a new conversation. I wrote about it for The Walrus back in 2019, when the City of Toronto was trying to figure out how to properly regulate Airbnb and the like. But for all the time and effort that went into those rules, there has been little slowdown in the spike in rents and housing costs there. Similar regulations in Vancouver and Montreal have had similarly underwhelming results. Now, with affordability spiralling out of control in most cities across Canada and any homebuilding target bound to take years before it starts to show up in the data, it’s time for more drastic measures.

If municipal governments are looking for inspiration, they should look to the new regulations introduced in New York City. As in Toronto, Vancouver and Montreal, hosts who list their properties for short-term stays have to register with the city or face a fine. But it’s the terms of its regulations that are so interesting — and potentially transformative. First, according to New York’s Office of Special Enforcement, landlords can’t rent out an entire apartment or home to anyone for fewer than 30 days, and that’s even if you own or live in the building. In Canada, that sort of restriction doesn’t exist.

Then there are provisions requiring the host to be present, imposing a maximum of two guests and mandating that hosts and visitors must leave the doors inside the dwelling unlocked, so occupants can access the entire unit. “The person renting out the home or apartment must ‘maintain a common household’ with the guests,” the rules state. “Otherwise, the short-term rental is illegal.”

This would dramatically curtail the number of use cases for short-term rentals since most people involved in these businesses either can’t or won’t share a household with strangers. As such, New York’s new rules will crack down on the approximately 10,000 illegal short-term rentals listed on Airbnb at the end of 2022, and return most of them back to the supply of units available for people actually living and working in New York.

The people paid to spin on behalf of companies like Airbnb and Vrbo will deny the correlation between short-term rentals and rising rents, and they’ll raise concerns about the impact these sorts of attempts to regulate their business will have on the tourism industry. Let them. As McGill University’s David Wachsmuth told Global News in June, “When you take a bunch of supply off of a market and don’t really change anything about the demand, the result is that prices are going to go up. And that’s indeed what happened.”

It’s not rocket science, in other words. Short-term rental sites and the financial opportunities they present effectively remove thousands — or in New York’s case, tens of thousands — of units of supply that would otherwise be available for long-term rental. Putting those back in circulation would inevitably apply downward pressure on rents, as researchers saw in Vancouver when its regulations took effect. The only real question is whether that would be enough to counteract the upward pressure applied by in-migration from other parts of the country, immigration and other demand-side factors.

For a federal government that needs to show some progress on housing affordability, this a question the Liberals should at least try to answer. The federal government should lean on the municipalities as hard as it can, with both carrots and sticks, to pass regulations that put the people who actually live and work in these cities ahead of visitors. Yes, the tourism industry might take a bit of a hit, and yes, so will some highly leveraged homeowners who bought so-called “income properties” and are renting them out through these sites. So be it. Renters, students and other people on the bottom of the property ladder have been taking hits for years now, ones they either didn’t see coming or couldn’t avoid.

If nothing else, it will help expose some of the so-called “gatekeepers” in our collective midst. According to recent research from The Maple’s Davide Mastracci, more than one-third of Canadian members of Parliament meet the definition of a landlord, with many — including Opposition Leader Pierre Poilievre — owning more than one property. More than 40 per cent of the Liberal cabinet generates income from real estate, and even NDP Leader Jagmeet Singh owns a rental property in British Columbia in partnership with his wife. Our political class, in other words, has a shared conflict of interest here that might prevent it from seeing things as clearly as it ought to.

New York City just introduced regulations that will cut Airbnb and Vrbo down to size, and help its beleaguered renters in the process. Canadian cities should consider doing the same — and the federal government should help.

But fear is a very effective motivator, and the Trudeau Liberals should be running scared right now on housing. In the same recent Abacus Data poll that showed them 14 points behind Poilievre’s Conservative Party of Canada, respondents were asked if they thought the government had a plan when it came to building more housing and making it more affordable. The results: Just 19 per cent thought they had a “good plan,” while 39 per cent said they had “no plan” at all.

Tightening the screws on short-term rentals isn’t, in and of itself, a plan. But it’s a big step in the direction of one, and it would take some of the fire out of Canada’s white-hot urban rental markets. That might buy the government a bit of time to actually get moving on other aspects of a full-fledged housing plan, one that encourages more building while ensuring it gets done in ways that promote and protect affordability. On this front, after all, a failure to plan is effectively a plan to lose the next election.

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Sounds good, let's do it!

Agree, it should be done. The Liberals need to stop sitting on their hands and take some concrete action to address the housing shortage.

I saw a CBC tv panel on rental costs (maybe 5 weeks ago) and how they had become untenable for so many a possible solutions. What I learned stunned me. One panelist owned an investment property with several renal units inside. He had gone over to the Airbnb model of short term rental (to make more money) which of course meant that the units were no longer on the market as "traditional" ie. normal rental units. This apparently was not anomaly but rather a trend. So, the effect is that with less units available, prices of course go up for the people who really need to be housed. I hope all levels of government who can have away in this make to a priority to bring in much much tougher regulations. I'm sure the hotel business would be happy to do more business, that's what they are there for.

I don't think many Canadians realize Airbb and Uber started by ignoring laws, not asking permissions and as they were illegal in most larger municipalities, got away with the inability of municipalities to enforce. Because of that attitude, don't ever use them. And now! Hundreds of home owners rent their homes as rental
S, unregistered, unregulated, probably uninsured and that removes these units from legitimate markets. Like Facebook and Google destroyed our media, Airbb said need some real government enforcement.

I'd like to hear about those laws they've broken. I certainly believe it.

The horrendous fire in Old Montreal that killed 7, was an Airbnb that dis not have a required permit.
Would a permit have prevented the fire? I'm not sure. Maybe they would have been refused?
Anyway, the evaporating of available so called normal rental units and being converted to short term rental is the larger issue here I believe.

Those are the origins of platform (i.e. website hosted) capitalism. It was a space that didn't exist, until it did, and had no obvious, applicable regulations (or a severe lack of imagination in applications of existing laws). Now that they are there, they are trying to buy and lobby their way to continuing the unregulated status quo. Only with continuing pressure will politicians actually do something for the common good.

903 places show for short rental in the Comox Valley (pop approx 75000) - I have friends who can rent for the winter, but come summer the price goes way way up. YES the govt should do something about this. Let travellers stay in hotels....

I find Airbnb and Vrbo a rip off for the most part. Not saying they all are, but some certainly are and safety and security can be a factor. I'll stay in a hotel any day over Airbnb and Vrbo rental.

A move to regulate, enforce existing laws and seriously curtail both illegal and legal short term rentals would definitely be a step in the right direction! Otherwise the multiple problems that Airbnb and Vrbo have presented to the long term rental market (i.e. finding a home to live in) will only continue to escalate and make the current housing crisis even worse. Personal greed shouldn’t win out over community and the common good.

However, the proliferation of short term rentals is just the tip of the iceberg when it comes to greed in the housing markets. According to the Globe and Mail, and others, over thirty percent (30%) of housing units in Ontario and BC are owned by investors, with many of these investors owning multiple properties and housing units. In excess of 30% is a huge number and one can be sure that this reality is a major contributor to the current housing crisis and a significant factor in how unaffordable housing has become.

These issues are not something that you will ever hear Pierre Poilievre and the CPC (probably not Trudeau and the LP either) discuss, talk about or address as to do so would be to impact the ability of these investors to make more and more money at the expense of those looking to buy or rent a place to live. All of those younger people who are looking to PP and the CPC to magically fix the housing crisis are extremely delusional and naive as the CPC are the epitome of “gatekeeping elites”. They aren’t about to rock the “investor” boat.

According to statistics, housing construction is already at an all time high and is not likely to increase to any great extent in the near future. That means that anything that impacts the availability of existing housing is a MAJOR problem for both the supply of housing and its affordability. Some of these factors are the proliferation of short term rentals, foreign ownership of housing, investors owning a large percentage of housing units, high immigration rates in a time of housing shortages, and all added to the problem of money laundering in real estate (especially in BC and ON).

Unfortunately, these issues aren’t likely to be addressed or resolved anytime soon as to do so would definitely ruffle some (expensive) feathers. So we should probably get used to more useless platitudes about the housing crisis from the freshly minted Poilievre.

Like Uber rides, air b&b are mostly illegal and ignore the law. Police and Politics don't have guts to tackle problem. I never use either