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Toronto Real Estate How one Toronto man’s mini-empire of Airbnb ‘ghost hotels’ exacerbates the city’s long-term rental market

Ke (David) Wang's Paperbox Property Management offers about 20 units, like this one, for short-term rental on Airbnb.

Airbnb

Advocates for housing are increasingly demanding action against Airbnb hosts who are taking thousands of housing units out of the Toronto real estate market, particularly the commercial operators of so-called “ghost hotels.”

Recent reports by the CBC have highlighted how some of these commercial operators operate country-wide networks of 200 or more apartments. Activist group Fairbnb estimates that within Toronto there are more than 6,500 homes and apartments operated by commercial hosts, who often have multiple units for rent. Airbnb often portrays its users as homeowners renting out spare rooms, but Fairbnb’s data suggests that commercial operators are close to 42 per cent of the platform’s hosts in Toronto and they generate more than 73 per cent of the company’s revenue in the city.

“No one would say Airbnb is the cause of the housing crisis, but everyone would agree that Airbnb certainly exacerbates it,” said Thorben Wieditz an activist and member of the Fairbnb.ca coalition.

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Mr. Wang built a mini-empire of short-term rentals in Toronto by taking dozens of rooms and apartments out of the city’s long-term rental market.

The Globe and Mail

One of Airbnb’s larger commercial operators in Toronto is Ke (David) Wang, who built a mini-empire of short-term rentals by taking dozens of rooms and apartments out of the city’s long-term rental market. Along with his mother Hui Ming (Amy) Zhang, Mr. Wang has spent $8.5-million to accumulate at least five houses and buildings in downtown Toronto – often with existing renters. In at least two cases, buildings that were once long-term rental accommodations have been converted to short-term uses.

At one time Mr. Wang was operating 26 Airbnb units. Currently his Airbnb identity, Paperbox Property Management, offers about 20 units for short-term rental.

The Globe and Mail reported on May 2 that Mr. Wang had made repeated use of an eviction loophole to remove tenants from long-term rental units in the city’s downtown core. Examination of property records shows Mr. Wang also evicted long-term tenants from what would become his main short-term ghost hotel site in the city.

Evicted: The loophole Ontario landlords use to force tenants out

Airbnb doesn’t respond to questions about individual hosts on its platform and doesn’t publicly provide data that would allow citywide rankings of its hosts. According to an analysis by Inside Airbnb, an open-data project run by Brooklyn community activist Murray Cox that scrapes Airbnb’s public listings, as of late 2018 Mr. Wang appears to have amassed Toronto’s 6th-largest collection of rooms under one identity. According to Mr. Cox’s data, if the units Mr. Wang operates were rented at close to capacity those rooms could be collecting as much as $40,000 a month in revenue from Airbnb users. Airbnb disputes the veracity of Inside Airbnb’s data, but again, does not provide any of their own.

Mr. Wang has declined to respond to The Globe and Mail’s repeated requests for comment on his business dealings in the city.

Mr. Wang began building his property holdings in 2011, after graduating from York University with a Bachelor of Arts in Financial and Business Economics. That September he bought what appears to be his first rental property: a narrow multistorey apartment building at 45 Mutual St., purchased in a power of sale proceeding for $1.7-million. A year later, he would register a $1.1-million mortgage against the property.

Mr. Wang bought 45 Mutual from Richard Mayer, an investor who had foreclosed on a private mortgage on the property held by jeweler Andy Kandaharian. There were at least four tenanted apartments in the building when it was purchased, but according to former tenant Eric Ramirez, most of them emptied out right around the time of the transfer.

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Mr. Wang had made repeated use of an eviction loophole to remove tenants from long-term rental units in the city’s downtown core.

Airbnb

“When he first approached us as the active landlord he told us that his intention was that he was going to move into our unit. He explained that because he’s the owner, he’s allowed to ask us to leave because he’s going to live there himself,” said Mr. Ramirez, who lived in the unit with his wife. He doesn’t recall if he was given an official N12 form (a type of eviction notice that allows a landlord to repossess a tenant’s apartment for use by themselves, a child, a spouse or parent), but he recalls they were given 90 days to move out.

“Within the next few months, he then retracted that and asked if we would actually stay. Because he was going to fix all the issues that we were having, he gave us a deal,” Mr. Ramirez said. There are documents in Landlord and Tenant Board court records that support this; a Dec. 1 agreement to subtract $450 from the $2,950 rent the couple had been paying since 2009, which was contingent on repairing air conditioning, heating and water issues, including leaks with of running water in the two-bedroom apartment they shared.

Through the spring and summer of 2012, relationship between Mr. Ramirez and the landlord frayed. According to LTB documents obtained by The Globe and Mail, disagreements over delayed maintenance, withholding of rent and allegations of improper access to the tenant’s apartment by the landlord and his mother resulted in an eviction for non-payment of rent. Ultimately, in 2013, the parties settled their financial difficulties and that’s the last time Mr. Ramirez heard from Mr. Wang.

Before he left, Mr. Ramirez said Mr. Wang explained his plans for 45 Mutual: “He wanted to create a hostel. The renovations on the second floor was to break that up into a multiunit place. The people he rented the second floor to were all international students. I believe they also had a miserable time,” Mr. Ramirez said. He described rooms rented individually with no kitchen access and oftentimes with no heat, air conditioning or even electricity.

Property records shows Mr. Wang evicted long-term tenants from what would become his main short-term ghost hotel site.

Airbnb

In August, 2014, Paperbox Property Management, controlled by Mr. Wang, was registered on Airbnb. Paperbox has had as many as 13 short-term apartment listings associated with 45 Mutual with prices ranging from $30 to $117 a night. Mr. Ramirez, looking at photos on the Airbnb site, said he recognizes his old apartment and others he has been inside and the rooftop where the tenants had held community barbecues. Some units are entire apartments and some are shared rooms, carrying descriptions such as: “Corky loft with skylight at Downtown Central,” “Roof Top Cozy Studio with Huge Patio in Downtown,” “Trendy Two Bedrooms Apartment” and “Studio Yellow.”

Some of Paperbox’s 45 Mutual listings also appear on an Airbnb profile called “Tony”, which is a pseudonym for Tai Duc Duong, a Toronto real estate agent who has acted as an agent for the rental units for Mr. Wang’s various buildings and who has appeared on LTB paperwork associated with Mr. Wang.

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45 Mutual is Mr. Wang’s largest single location for Airbnb rentals, though by no means the only ghost hotel property he lists on the site. Another dozen units are spread across three properties he doesn’t own. His mother Hui Ming Zhang purchased nearby 39 Mutual for $1.44-million in 2016 and the four apartments in that row-house – which had been rented but were vacant at the time of sale – are now listed on Airbnb. Paperbox has also rented eight rooms in 694 Bathurst Ave., a house in the Annex registered to Rong Ting Qiu since 2016. At one time Mr. Wang listed as many as 26 apartments on the popular and lucrative short-term rental site (currently he lists 19 units).

But Mr. Wang’s Airbnb operation sits on a shaky foundation. Virtually all the units he posts would be banned from Airbnb listings under new Toronto by-laws restricting short-term rentals to the primary residence of the hosts. None of the homes Mr. Wang rents on Airbnb appear to be his primary residence.

The city’s penalties for ineligible listings could reach a maximum $100,000 for an offence and it plans to introduce economic penalties that would scale rapidly if an operator ignored city orders.

Those regulations have not yet come into force. An appeal to the rules will not be heard at the Local Planning Appeal Tribunal until Aug. 26, 2019.

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