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A warm spring day brings people out to Bellevue Square in Kensington Market in May, 2013.Fred Lum/The Globe and Mail

If you are in Kensington Market this weekend and you see a procession of people dressed as black-clad mourners or ghosts, carrying a lifeless body and accompanied by a three-piece band playing a dirge, you'll probably chalk it up to the eccentricity of the neighbourhood. It's Kensington. Those nuts are always up to something. That's part of the appeal.

In Toronto, Kensington stands out as a utopian, bohemian, urban space. That's why it features prominently in tourism marketing. That's why a film, television or video shoot is there every day, trying to capture the cultural diversity to which Toronto and Canada usually aspire.

That's why it's no surprise to see Airbnb associating Kensington with its brand. In November, 2016, the globally popular home-sharing company organized a walk in the neighbourhood, ushering some of its users/hosts around the area, visiting local businesses and chronicling the stroll in photos for a promotional blog post that lives on as sponsored Facebook content.

For Friends of Kensington Market, a community organization that had been struggling to deal with the impact of short-term rentals on the neighourhood's housing market, being used as a marketing tool was the last straw.

Chair Dominique Russell says the group has received complaints from at least 30 tenants about landlords using questionable tactics to bully renters out of their homes, often converting the apartments into short-term rental units.

"It's quite dramatic how quickly Kensington is being emptied out in this way," Ms. Russell says.

She is still looking for someone to play the "corpse of rental housing" at Saturday's Requiem for Renters, which will wind through the market and finish at a "ghost hotel," an apartment converted into short-term rental use. The theatrical event is symbolic, Ms. Russell says, aimed at raising awareness of a hard-to-see threat to the neighourhood.

"It's a real stealth thing that's happening. People aren't aware of it until suddenly, in my case, in three of the buildings around me, I don't have any neighbours."

Municipalities all over the world are dealing with the challenge of home-sharing regulation compounded by housing crises. In London and Amsterdam, Airbnb agreed to enforce rules limiting hosts to a number of days a year that they can rent out property: 90 days in London and 60 in Amsterdam. In San Francisco, hosts can operate only one listing at a time and must pay hotel taxes.

In Toronto, city staff are currently preparing recommendations for home-sharing regulations to be revealed in June. Joe Cressy, the councillor for Ward 20, which includes Kensington, says he'd like to see regulations that address the effects of affordability on rental housing, fairness of taxation (hotels are required to have zoning permits and must pay commercial-property tax and HST) and accountability for consumer protection (safety measures against troublesome renters/hosts).

"I think Airbnb is strangling the neck of an already strained housing-rental market in Toronto," says Mr. Cressy, who plans to participate in Saturday's Requiem for Renters. "We have a rental-housing market that is exceptionally strained and Airbnb is taking rental properties off the market and using them for so-called home-sharing, which it's not."

At the heart of this is a conflict over what Airbnb is – a platform for residents to generate a supplemental source of income from their homes, or a tool allowing real estate investors to operate unlicensed hotels.

It's difficult to determine exactly how many active listings Airbnb has just by scrolling through the site. Fairbnb, a pro-regulation coalition of labour, tenant and resident groups, provides numbers using Web scraping, software that generates a spreadsheet by searching and collating data from publicly available information online. It's not 100-per-cent accurate, a Fairbnb spokesperson says, but a fair approximation. (Airbnb declined to provide local data.)

During April, according to Fairbnb, Airbnb has 131 active listings in Kensington. On Craigslist, 12 apartments are for rent in the area. Fairbnb's analysis found 68 Airbnb units are owned by 21 hosts, all of whom have multiple listings within or near the neighbourhood.

One host has eight listings in Kensington. Another, with six listings, advertises as a "travellers' home," featuring bunk beds stacked four to a room.

At an Airbnb workshop in March, a fact sheet was handed out with a photo from the Kensington tour. Before listing the economic benefits of the company to Toronto, the handout states that "the vast majority of our hosts are everyday people and families – our friends and neighbours."

Fairbnb estimates that 84 per cent of Airbnb hosts have only a single listing, but the remaining 16 per cent of hosts operate 40 per cent of the listings and generate 52 per cent of revenue. Airbnb declined to comment on the calculations, but it has added a mechanism to address habitual-problem hosts.

In my Kensington Market condo, Airbnb is not allowed by the condo board, but plenty of short-term rental units operate in the building in semi-secrecy. Guests arriving with suitcases every Friday afternoon are a giveaway, as are the online listings. Most owners in the building looked the other way until a couple of units turned into hot spots for teenage parties.

When it became a regular weekend event for the hallway to be filled with drinking, smoking and fighting, a collection of neighbours started keeping a spreadsheet, charting every time there was an incident, how many guests came (sometimes more than 50), how late it went (sometimes until 4 a.m.) and what time police were called.

Airbnb has a new "neighbour" tool, an online platform to register conflicts with hosts and promises to take action against users who routinely generate neighbour complaints or are operating in violation of building-specific home-sharing bans.

"The overwhelming majority of Airbnb hosts and guests are good neighbours and respectful travellers, so issues of any kind are incredibly rare, but when they happen, we work to make things right," says Alex Dagg, public policy manager for Airbnb in Canada. "Hosting is a big responsibility and those who repeatedly fail to meet our standards and expectations will be subject to suspension or removal."

Ms. Dagg said the company also wants to work with community organizations, city staff and the hotel industry to address concerns.

"Airbnb welcomes debate about our role in the city. In fact, we want to be regulated. We're collaborating with the City of Toronto, the Province of Ontario, numerous community groups, our hosts and key stakeholders across the city to ensure that our operations contribute to the community here in Toronto."

For renters in Kensington though, regulation can't come fast enough.

"If the city doesn't come up with something that has teeth, then it will continue the erosion of affordable living downtown," says David Perlman, a renter in the market for 35 years. He has nothing against Airbnb's original home-sharing use. And he sees reason to be hopeful that the company is open to operate by whatever rules local municipalities create.

The alternative, Mr. Perlman suggests, will be the end of Kensington.

"If we create a situation of ghost hotels, it will be devastating. It's like building a six-lane highway into the mountains to see the mountains. By the time you've built your highway, you don't have the thing left that people went to see. An area like Kensington is the attraction that it is in the city precisely because it's a living neighbourhood and not just a tourist strip."

Ontario Premier Kathleen Wynne says her government will 'soon' bring in measures to cool a frenzied housing market and help both buyers and renters. The average price of detached houses in the Toronto area has risen to $1.21 million.

The Canadian Press