But that’s not all. A new study has found that Airbnb is another big reason the city’s rental market is getting so tough.
Last year, more than 31,000 Canadian homes were being rented out so frequently that they were likely removed from the platform, researchers at McGill University found. Of that number, roughly 40 per cent (or 12,000 residences) were located in Toronto, Vancouver and Montreal, resulting in “lost” housing units, the Globe and Mail reports. The report estimates that in Toronto specifically, 5,230 long-term rental units were lost to Airbnb.
“The more Airbnb activity you see in a city, the higher housing prices and the higher rents are going to get,” McGill professor David Wachsmuth, who co-authored the report, told the Globe. “There’s no question that [Canadian] cities are now past that point.”
Rent is getting pricier for Canadians. In fact, four in 10 spend more than one-third of their income on housing, a recent study found.
Toronto has a particularly tough market considering it’s had the highest rent in Canada for six months straight. A one bedroom in the 6ix now goes for $2,231, according to a national rent report by Rentals.ca.
Vancouver has continued to hover in the top five in the same report, while Montreal has had a slow climb in prices landing it closer to the top 20 over the past few months. Rent for a one-bed unit in these cities now sits at $1,886 and $1,269, respectively.
Lack of housing is a pressing issue as these cities continue to grow, which is why lost housing as a result of Airbnb is such a big deal.
To put things in perspective, research manager Graham Haines, at Ryerson City Building Institute, told the Globe that the number of frequently rented properties in Toronto, Vancouver, and Montreal is “almost enough housing to add a whole percentage point back onto our vacancy rates.”
In 2018, vacancy rates were below two per cent in these cities, CMHC reports. Toronto, specifically, had a vacancy rate of 1.1 per cent.
Urban economist Frank Clayton has previously warned that Toronto could be in for a housing crisis. Since Toronto is the fastest-growing city in Canada and the U.S. by a long shot, this could mean there soon won’t be enough housing to keep up with demand, he noted.
Toronto’s City Council has previously asked Airbnb to take down listings that did not meet its registration and licensing regulations in order to combat the city’s affordable housing crisis. However, the company responded saying it “feels it does not have the authority to comply.”
Unsurprisingly, the company would have lost a lot of money if they had agreed.