June 24, 2019 5:15 pm
Updated: June 29, 2019 5:30 pm

Should Canadian cities ban Airbnb and other home-sharing platforms?

A report released by some of Airbnb's biggest critics shows that Toronto's rental vacancy issues could be solved if short-term units infringing on city rules, were put back on the market. They also called on the province to work in favour of the city's bylaw which is tied up in an appeal with the LTAP. Matthew Bingley reports.

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Cities have targeted online home-sharing platforms like Airbnb in their fight to address the affordable housing crisis, charging the companies with taking rental homes away from local residents.

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In Toronto, some 6,500 homes have been pulled from the housing market, according to a January report from Fairbnb, a Canadian coalition advocating for fairness in the short-term rental industry — that’s while regulations meant to restrict who can and can’t offer short-term rentals are on hold until an appeal of the regulations is heard this August.

READ MORE: Affordable housing — Would copying New Zealand’s foreign buyers ban help?

Earlier this month, a report out of McGill University indicated that number balloons to as many as 31,000 rental units across the country — up to one per cent of all rental vacancies in Vancouver, Toronto and Montreal.

In Quebec, where regulatory changes were announced earlier this month, advocates say the changes don’t go far enough. The RCLALQ, the Regroupement des comités logement et associations de locataires, called for a “complete ban.”

Should Quebec ban Airbnb and Airbnb-style platforms? Should other Canadian cities also consider a ban?

“Airbnb takes housing affordability seriously,” said spokesperson Alexandra Dagg in a statement to Global News.

“We understand the complexity of these issues and believe attempts to simplify and place blame solely at the foot of home sharing are not only poorly conceived, but also ineffective.”

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Housing researchers are starting to pay increasing attention to the fact that lots of houses are being used for purposes beyond living in them.

There is even a term for it, says David Hulchanski, a professor at the University of Toronto and the Dr. Chow Yei Ching Chair in Housing: “Not for Housing” Housing or NFHH. Critical Housing Analysis, a peer-reviewed academic journal, breaks down the types of NFHH: There are second homes, homes as overseas investments, homes as offices — think spare rooms repurposed or whole homes adapted — as well as homes as hotels.

READ MORE: ‘We are entering a housing crisis’ — Montreal ramps up fight against Airbnb

“The bigger issue is this use of housing not for housing,” Hulchanski says, “and the biggest part of that is these hotel uses of houses.”

It isn’t just Airbnb, he acknowledges, although “they’re the biggest player.”

As one of Hulchanski’s colleagues at the University of Toronto, Mariana Valverde, put it:

“It’s now clear that a single American company has upended local markets, pushed rental prices skyward and could be contributing to poverty, especially in cities popular with tourists.”

Airbnb, which launched a Global Office of Healthy Tourism last year, says it “aims to drive local, authentic and sustainable tourism in countries and cities around the globe.”

But beyond its work in addressing tourism concerns, Airbnb spokesperson Dagg said, “home sharing is helping thousands of families afford to stay in their homes.” Her statement did not differentiate between those renting out rooms in their homes versus those renting out second homes versus those who list several units. Those listing multiple homes are of increasing concern for some.

Limiting Airbnb to a version of its original purpose — renting out a spare room in your home — “is crucial,” Valverde wrote.

WATCH: Nova Scotia moves to regulate short-term rentals

An outright ban isn’t the answer, says Shauna Brail, an associate professor of urban studies at the University of Toronto. Brail’s research tends to focus more on ride-sharing apps, such as Uber, but there are some similarities.

“Both activities launched in legally grey zones where the big firms argued that actually, the existing regulations didn’t cover them,” Brail says.

While some cities “took that to heart” (and in some cases, the courts have agreed), Brail says the “scale at which these services were launched and the ways in which the services were consumed” have forced governments to play regulatory catch-up.

READ MORE: City of Vancouver takes action against 820 rogue short-term operators in 6 months

Even in some places with regulations, enforcement is its own beast.

In Montreal, the city called on its own people to help fight illegal short-term rentals, saying it needed citizens to be on the lookout for lock boxes on public property — a tactic that city councillors believed was being employed so that officials couldn’t pinpoint which apartment a specific lockbox was for.

There’s an incentive for homeowners to rent out their homes or spare rooms in the short-term rather than renting to traditional longer-term tenants, Hulchanski says.

“It’s lucrative and it’s often tax-free and it’s an unregulated sector. Rental housing for tenants can’t compete.”

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Davelle Morrison is a sales rep with Bosley Real Estate Ltd., a brokerage in Toronto. She also rents out several properties, in Toronto and Prince Edward County, using Airbnb.

She thinks the Fairbnb reports that trot out big numbers — 6,500 homes pulled from the Toronto market because of Airbnb-style rentals — are misleading.

First, Morrison says, you need to look at each real estate market separately. In places like Prince Edward County, where she says she’s helping develop regulations, there aren’t enough hotels to sustain the tourism industry.

“So you actually need those Airbnb units,” she says.

Airbnb has acknowledged this, highlighting a landmark area in Japan that was on the decline before the company opened a facility in the community, bolstering tourism.

Even in Toronto, where researchers say thousands of homes would be on the rental market if not for Airbnb, Morrison isn’t convinced.

For 10 years, she rented one of her properties currently listed on Airbnb. That was fine, she says, until she got a problem tenant.

“Landlord and tenant rules are in favour of the tenant,” Morrison says. “Airbnb gives [people with problem tenants] the rights they feel they need.”

WATCH: What Canadians need to know about insurance coverage before they use Airbnb

While some people might rent long-term if they could no longer do short-term rentals, Morrison expects many would simply try to sell their houses instead.

“Everybody wants a quick fix and the quick fix is, ‘Let’s ban Airbnb and we’ll have X units available,’” she says. “I don’t think it’s a quick fix. If you really want a good solution, we need to do a deep dive in the landlord-tenant board rules.”

At a certain point, Morrison says, people also have to just recognize that people “should be able to choose what they do with their property.” She relies on her listings as a “creative” alternative to a pension (which her job doesn’t offer).

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The “big picture” solution is implementing regulations and ensuring that people who use Airbnb are reporting it on their taxes, says Hulchanski.

“There’s nothing wrong with individuals going on vacation for a while and renting out their place. We’re not talking about that,” he says. “We’re talking about people who own one or more or often dozens of potential rental units  — often built with subsidies for first-time homebuyers or other tax benefits — and use them as hotels.”

That’s obviously appealing from a financial standpoint when the sector isn’t regulated and when most people aren’t required to get a registry number for their listing, one that would tie their income taxes with their property ownership, Hulchanski says.

“Introduce regulations, get a couple computers going… All of that could be taken care of very easily within a year.”

WATCH: Quebec adopts new Airbnb regulations

Researchers like David Wachsmuth — the McGill professor behind the paper this week highlighting as many as 31,000 rental units taken off the market nationwide as a result of Airbnb — rely on data scraping to come to their conclusions.

In a statement, Airbnb spokesperson Dagg said that can lead to “faulty assumptions.”

If a municipality’s regulations put restrictions on the number of nights and rooms a person could rent out — as Toronto’s not-yet-in-effect regulations would — then companies like Airbnb would have to share that data, and researchers like Wachsmuth wouldn’t have to rely on data scraping.

“I think it’s becoming more accepted over time that the data these firms have is data that should be shared, and made public,” Brail says.

The problem, Hulchanski says, is that “these big companies know what they’re doing and they’re making really good money.”

READ MORE: Alleged Airbnb fraud in Fredericton leaves international student stranded

Ultimately, Hulchanski says, there is a role for every level of government in addressing concerns over the impact of home-sharing platforms on housing affordability.

The federal government could step in from a tax standpoint, the provincial governments could support using property assessment systems, and the municipalities could handle registries.

“There was always some housing not used for regular housing,” Hulchanksi says, but now there’s a study showing Airbnb could be stripping up to one per cent of all rental vacancies in Vancouver, Toronto and Montreal off the market.

“That’s really significant, but it’s renting,” Hulchanski says, adding that election time priorities have typically skewed more towards supporting homeowners.

“I’ve got to ask rhetorically, who cares about renters?”

© 2019 Global News, a division of Corus Entertainment Inc.

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