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Toronto Real Estate Report says Airbnb listings are sapping Toronto’s housing market; group demands action from Ontario

A new report is demanding Ontario impose province-wide regulations on short-term rentals hosted by companies such as Airbnb as part of any plans to tackle housing supply and affordability.

A new analysis of Airbnb’s market share in Toronto found that the number of short-term rental listings continues to grow, reaching 19,255 listings as of December, 2018, up 23 per cent from the 15,610 listings a year earlier. Of those, 64 per cent (or 12,374) are so-called “entire home” listings for houses or condo apartments, and of those 33 per cent (or 6,479) are non-primary residences that have been removed from the city’s long-term housing supply.

“Given that Toronto suffers from one of the lowest vacancy rates in the country (currently 1.1 per cent), returning even a fraction of these homes to the city’s housing market would make a difference to thousands of families seeking permanent homes in Toronto,” the report states.

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"I triple-checked with [the] chief planner; we need 5,032 new rental units to get back to a healthy vacancy rate,” said Joe Cressy, city councillor for downtown ward Spadina-Fort York. “We could achieve that target tomorrow if Airbnb simply delisted those 6,500 units, which are designed and built units for housing but used for a different purpose.”

The data was compiled by Fairbnb, a group initially funded by hotel workers' labour organizations that has worked with condo boards and residents' associations in the city, and which has been pushing for tougher regulations on the short-term rental sites. Fairbnb’s data is compiled by scraping the public-facing part of Airbnb’s site, which both organizations agree introduces a degree of error. However, Airbnb hasn’t produced a public accounting of its market reach in Toronto since 2016.

Fairbnb’s report calls out so-called “ghost hotel” operators with multiple listings, which would be banned under regulations passed in 2018, but which are not yet in force after a group of short-term operators launched an appeal to the rules (a hearing at the Local Planning and Appeal Tribunal has been scheduled for August, 2019). If upheld, the City of Toronto bylaws mandate short-term hosts obtain a license, and all listings must follow two key rules: “No operator shall rent or advertise for rent a short-term rental except at their principal residence … [and] an operator can only have one principal residence at any time.”

In 2017, city reports estimated there were 3,200 listings that would not be compliant with new rules, now Fairbnb estimates there are more than 8,241 listings.

“When we released our initial report in 2017, commercial operators were 32 per cent of Airbnb revenue in Toronto,” said Thorben Wieditz, Fairbnb’s only full-time staffer. “That is now up to 73 per cent. You can see how much Airbnb relies on commercial ‘ghost hotel’ operators.”

Fairbnb claims that 73 per cent of Airbnb’s $260-million in Toronto revenue comes from 30 per cent of the city’s hosts controlling 42 per cent of all the units, and that most of those 8,241 units would not comply with the city’s rules.

“This report is based on faulty assumptions and poor research, and is yet another example of the well-resourced and clearly biased hotel lobby seeking to villainize families who are making a little extra income by sharing their homes,” said Alexandra Dagg, public policy manager for Airbnb Canada. “To be clear, Airbnb wants to be regulated – we have always advocated for fair, sensible home-sharing regulations and look forward to continuing our collaborative relationship with the City of Toronto.”

Mr. Wieditz says Fairbnb isn’t anti-home-sharing, just anti-ghost hotel. He notes that commercialized hosts such as Sakir Suites, which lists 38 separate condos on or near the city’s waterfront, also concentrate in just a few core neighbourhoods where most of the city’s hotel rooms are also present. The waterfront and island area alone has 2,443 listings (up 30 per cent from 2017), of which 88 per cent are entire homes or apartments, and perhaps 58 per cent of which are part of a collection of multiple listings.

Mr. Wieditz also thinks the city needs to lower the number of days it will allow an “entire home” to be rented on Airbnb. His analysis found the current 180 days is “is a license to run a hotel," claiming that in the key tourist zones even 90 days on Airbnb would generate enough revenue for a landlord to take an apartment off the long-term market.

In other popular tourist cities in Canada with regulations on Airbnb, enforcement results have been mixed. In December, 2018, the City of Vancouver claimed that 963 units had been taken off the short-term market, out of approximately 6,000 that existed when the regulations came into force in September, 2018. In Vancouver, short-term landlords are also required to get a city license, but there are still only 3,161 operators who obtained one, compared with 4,589 active listings. Breaking the city’s rules merits a $1,000 ticket per offence.

Some locals have questioned how much Airbnb is doing to make hosts comply with Vancouver’s rules. Amateur sleuths have found hundreds of examples of Vancouver listings without a city license, despite rules that one must be displayed in the listing. Local news reports have found that some hosts have been evading city rules by falsely claiming their units were in nearby municipalities that don’t have the same restrictions.

Airbnb has maintained that it will educate its hosts on the city’s rules when and if the LPAT appeal upholds the city’s bylaws. For Mr. Cressy, Airbnb’s decision to wait for the ruling is “unacceptable, and a shame.”

“Airbnb has stated it will abide by whatever regulations we chose, to which I say: Prove it,” Mr. Cressy said.

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Fairbnb concluded its report with a call for Ontario’s provincial government to extend short-term rental regulations across the province. “Fairbnb Canada recommends that the Minister of Municipal Affairs and Housing include short-term rental regulations as a key aspect of the housing-supply problem in Toronto and other urban markets in Ontario and pay close attention to the active short-term appeals before the LPAT,” it states.

“We look forward to reviewing the report," said Conrad Spezowka, spokesperson for the Ministry of Municipal Affairs and Housing. “We are taking steps to help the people of Ontario find housing they can afford. That is why the government has started a broad public consultation and is asking for ideas from people across Ontario on how to build more housing and reduce housing costs.” Asked specifically about regulating Airbnb, Mr. Spezowka declined to comment.

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