Increasing Toronto's Vacancy Rate - Toronto's vacancy rate could inch closer to healthy levels if illegal entire home listings were converted to ...
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Increasing Toronto’s Vacancy Rate Toronto’s vacancy rate could inch closer to healthy levels if illegal entire home listings were converted to residential long-term rentals FAIRBNB.CA COALITION - FEBRUARY 2020
2 Fairbnb.ca
Summary
The total number of “Increasing Toronto’s Vacancy Rate one
Illegal Airbnb Listing at a Time” analyzes
non-compliant entire Toronto’s short-term rental market in 2020.i
home listings, so- It follows an earlier report released by
called “ghost hotels”, Fairbnb Canada in January 2019 that applied
the City’s regulatory lens to assess the impact
increased by 13.5%, the City’s short-term rental bylaws would
from about 6,479 have if they would have been enforced at that
entire homes in point in time.
January 2019 to 7,354 The results were shocking. We found that
one year later. Airbnb would have had to remove 8,241 non-
compliant listings. About 6,500 of these were
found to be entire homes: houses, apartments and condos that had been
permanently removed from the city’s housing stock and used year-round to
accommodate tourists and guests by so-called “high-volume” hosts.
Toronto’s short-term Our report came to the conclusion that City of
Toronto’s approved short-term rental rules
rental rules are in could significantly alleviate pressure on the
effect today, which city’s housing market, helping those of us
renders thousands of looking for decent and long-term
accommodations find affordable places to live.
Airbnb listings illegal
in Toronto. The update report in front of you today
repeats this exercise. What has changed,
however, is that Ontario’s Local Planning and Appeal Tribunal (LPAT) has
heard the appeals and released its decision that upholds the City’s short-
term rental rules in November 2019. In other words, Toronto’s short-term
rental rules are in effect today, which renders thousands of non-compliant
Airbnb listings illegal in Toronto.
Our analysis uses the City’s regulatory lens to identify all non-compliant
listings by using the most current data available.ii To recap, our report only
flags:
• Entire home listings rented out more than 180 days a year;
• Entire home listings rented out by hosts with two or more entire
homes for rent; and,Increasing Toronto’s Vacancy Rate 3
• Listings by hosts who rent out more than 3 private rooms.
Analysing Toronto’s Airbnb today, we found that:
• The total number of non-compliant Airbnb listings increased by
approximately 17.8%, from about 8,241 in January 2019 to
9,708 one year later;
• The total number of non-compliant entire home listings, so-
called “ghost hotels”, increased by 13.5%, from about 6,479
entire homes in January 2019 to 7,354 in January 2020;
• “Ghost hotels” continue to be concentrated in the Waterfront
neighbourhood. In January 2020, approximately 34% of all non-
compliant entire home listings in Toronto were found in that
neighbourhood, compared to about 30.5% in December 2018;
• Nearly 74% of revenues are generated from non-compliant
listings citywide – and 85.6% in the Waterfront area;
• If Airbnb played by the rules and its hosts were to follow
Toronto’s laws, we estimate that more than 7,300 homes could
become available for long-term use, nearly 2,500 in the
Waterfront area alone; and,
• If even half of these entire home listings were returned to the
long-term rental housing market, the city’s vacancy rate would
increase from 1.3% to 2%, providing sorely needed relief to
home-seekers.
LOCAL APPEALS TRIBUNAL UPHOLDS
TORONTO’S SHORT-TERM RENTAL RULES
As cities attempt to protect residents from the impacts of unregulated
home-sharing, Airbnb’s first line of defence has been to challenge these
regulations in court.iii Toronto has been no exception; the company
bankrolled some hosts and expert witnesses participating in the appeal
of Toronto’s short-term rental regulations in early 2018 at LPAT.iv
Fairbnb Canada sought and received party status to help the city defend
its short-term rental bylaws.4 Fairbnb.ca
“One fact is indisputable: On November 18, 2019, LPAT
rejected Airbnb hosts’ appeals. In its
each dedicated short-term decision, LPAT adjudicator Scott
rental unit displaces one Tousaw said that Toronto’s rules
permanent household. “represent a reasonable balancing [...]
ensuring that housing is provided for
That household must find residents, that a full range of housing
another place to live." is available including short-term
rentals, and that the business and
(LPAT, 2019) tourism economies are supported.”v
Significantly, the ruling protects secondary suites – self-contained
apartments created within houses, like basement or nanny suites. The
LPAT decision referenced recently adopted provincial policy
encouraging homeowners to put up their basement apartments for long-
term rentals, noting these “could not have been intended to provide for
visitor or tourist accommodations.”
While some of the appellants are seeking leave to appeal the LPAT
decision to the Divisional Court, the City of Toronto has stated that its
short-term rental bylaw is now in effect, and is putting in place
registration, licensing and enforcement systems.vi
NUMBERS OF ILLEGAL “GHOST HOTELS”
MOUNT – AS DO RENTS
Toronto’s long-term rental market remains perilously tight, with an
overall vacancy rate – for both condos and purpose-built rentals -
hovering around 1.3% in 2019.vii Average rents increased 3.2% in the
condo market and 6.4% among primary rentals.viii Asking rents are
drastically higher for those searching for a rental home today.
At the same time, we estimate the number of non-compliant entire
homes listed on Airbnb have increased by 13.5% in just over a year, to
over 7,300 units.
According to the Canada Mortgage Housing Corporation (CMHC), there
were 4,850 vacant primary units and 1,102 vacant condo rentals in
Toronto in 2019.ix If even half of the approximately 7,300 non-compliant
entire home listings were returned to the long-term rental market, the
city’s vacancy rate for condo and purpose-built rentals combined would
ease, from 1.3% to 2%. Toronto’s vacancy rate could approach aIncreasing Toronto’s Vacancy Rate 5
“healthy” rate of 3% if all non-compliant entire home listings became
long-term rentals.
WATERFRONT NEIGHBOURHOOD HARD HIT
BY AIRBNB
In earlier reports, Fairbnb Canada has noted the degree to which
Toronto’s Waterfront community has been impacted by Airbnb. The
neighbourhood has one of the highest rates of “ghost hotels” - entire
homes taken from the long-term housing
In January 2020, we market to be used for tourist
estimate over half accommodations – observed in Canada.
(57.8%) the Airbnb In January 2020, we estimate over half
listings in the (57.8%) of the Airbnb listings in the
Waterfront do not comply with the City’s
Waterfront do not regulations. The vast majority of these –
comply with the City’s 2,495 out of 2,532 listings - are entire
regulations. home listings. The Waterfront
neighbourhood also sees a great deal of
activity by multi-listing hosts who buy, lease or otherwise stockpile
multiple homes for Airbnb use. The top host in the neighbourhood,
“Simply Comfort,” offers 94 entire home listings there.
On January 31, a shooting at a rented Airbnb in the Waterfront
neighbourhood claimed the lives of three people.x This shooting
occurred almost exactly a year after a previous shooting at an Airbnb in
the same location.xi The safety of residents in the neighbourhood, and in
their homes, has been shaken.
Airbnb’s response to the tragedy was to announce a one-time $300,000
donation to Canadian Doctors for Protection from Guns (CDPG) -
approximately 0.18% of the revenue generated by illegal listings in
Toronto – as well as a “platform change,” preventing guests under the
age of 25 from renting listings in their own municipalities. Toronto’s
mayor, as well as the area’s federal, provincial and municipal
representatives, called on the company to follow the law.xii A week later,
the Toronto Star’s editorial board called for the same measures.xiii6 Fairbnb.ca
MULTI-LISTING HOSTS CONTINUE TO DRIVE
AIRBNNB’S REVENUE
Airbnb’s resistance towards following City of Toronto’s by-law has a
simple explanation: non-compliant listings generate two-thirds of the
company’s revenue. Our data shows that nearly 74%, or $167 million in
estimated yearly revenue, is generated by non-compliant listings. An
astonishing 70% derives from non-compliant entire home listings,
generating approximately $159 million in yearly revenue.
In the Waterfront neighbourhood, the pattern is even more striking,
with an estimated 85.1% of revenues, roughly $73 million, generated by
non-compliant entire homes.
If Airbnb were to play by Toronto’s rules, it would significantly reduce
its own profitability. With the company reportedly seeking an initial
public offering (IPO) to pay back its investors this year,xiv it is unlikely
that we will see good corporate citizenship from this company anytime
soon.Increasing Toronto’s Vacancy Rate 7
APPENDIX A8 Fairbnb.ca
ENDNOTES
iThe authors would like to thank Magda Barrera, Bahar Shadpour and Tom Slee for their help with this
report.
ii Airbnb does not provide data to the public. Data used for this analysis was kindly provided by Murray Cox,
a data analyst from New York City who makes Airbnb listing data publicly available for a number of cities at
www.insideairbnb.com. For more information about his data sets and methodology, please visit his website.
iii Olivia Carville, A. T., Jeremy C.F Lin. (2020, Feb. 14). Airbnb To America’s Big Cities: See you in Court.
Bloomberg News. Retrieved from https://www.bloomberg.com/graphics/2020-airbnb-ipo-challenges/
iv Kalinowski, T. (2019, Aug. 30). New rules would put a third of Airbnb listings out of business, and boost
housing supply, tribunal told. Toronto Star. Retrieved from
https://www.thestar.com/news/gta/2019/08/30/new-rules-would-put-a-third-of-airbnb-listings-out-of-
business-and-boost-housing-supply-tribunal-told.html
v Local Planning Appeal Tribunal (2019, Nov. 18). PL180082: Decision delivered by S. Tousaw and order
of the tribunal. Local Planning Appeal Tribunal.
vi https://www.toronto.ca/community-people/housing-shelter/rental-housing-standards/short-term-
rentals/
vii Includes primary rentals and condominium rentals; excluding other secondary rentals (i.e., houses
and secondary suites) due to limited data reported by CMHC.
CMHC Housing Market Information Portal, Toronto, 2019: https://www03.cmhc-schl.gc.ca/hmip-
viii
pimh/en#TableMapChart/2270/3/Toronto
ix
CMHC Housing Market Information Portal, Toronto, 2019: https://www03.cmhc-schl.gc.ca/hmip-
pimh/en#TableMapChart/2270/3/Toronto
xDraaisma, M. (2020, Feb. 1). 3 dead, 2 injured after shooting at Airbnb in Toronto, police not looking
for suspects. CBC News. Retrieved from https://www.cbc.ca/news/canada/toronto/three-dead-
shooting-cityplace-1.5448788
xiNews Staff. (2019, Jan. 11). Man in his 20s seriously injured in CityPlace shooting. CityNews. Retrieved
from https://toronto.citynews.ca/2019/01/11/man-in-his-20s-seriously-injured-in-cityplace-shooting/
xii Ignatenko, M., & Boyle, T. (2020, Feb. 1). Councillor calls on short-term rental operators to delist
‘ghost hotels’ after three killed in shooting at Toronto Airbnb. Toronto Star. Retrieved from
https://www.thestar.com/news/gta/2020/02/01/city-calls-on-short-rental-operators-to-delist-ghost-
hotels-after-triple-homicide-at-downtown-
airbnb.html?fbclid=IwAR0ZgNTwSdNnRCrCEgieIY795AIGwbIhBTCkoagDFXDWI5ov5j66VO-tZA8
xiii Star Editorial Board. (2020, Feb. 12). Airbnb must follow rules, even when it doesn’t like them.
Toronto Star. Retrieved from https://www.thestar.com/opinion/editorials/2020/02/12/airbnb-must-
follow-rules-even-when-it-doesnt-like-them.html
xiv Olivia Carville, A. T., Jeremy C.F Lin. (2020, Feb. 14). Airbnb To America’s Big Cities: See you in Court.
Bloomberg News. Retrieved from https://www.bloomberg.com/graphics/2020-airbnb-ipo-challenges/You can also read
