Canada’s Short-Term Rentals: A Missed Opportunity for Long-Term Housing?

Canada’s Short-Term Rental Surge

In 2023, Canada had an estimated 107,266 short-term rental properties that could potentially be converted into long-term housing, according to a recent study by Statistics Canada. The study, released on July 30, highlights a significant increase in short-term rental listings—up more than 60% from 2017 to 2023. During the same period, the number of properties suitable for long-term rentals rose by over 80%.

Impact of the COVID-19 Pandemic

The growth of short-term rentals was not uniform. The COVID-19 pandemic led to a 19.2% decrease in total listings from 2019 to 2021, with potential long-term dwellings (PLTDs) declining by 28.1%. Although the short-term rental market began to recover in 2022, the share of PLTDs was still lower than in 2019.

Provincial Variations

Nationally, PLTDs accounted for 0.69% of all housing units in Canada in 2023, marking a record high compared to 0.60% in 2019. Provincially, Ontario saw a notable increase, with PLTDs doubling from 0.35% in 2022 to 0.69% in 2023. Quebec also saw a rise, reaching 0.51% in 2023, though this was still below its pre-pandemic high of 0.61%.

Regional Insights

British Columbia and Prince Edward Island reported the highest shares of PLTDs, exceeding 1% of housing units. This trend reflects the prominence of short-term rental markets in these provinces. For instance, Whistler, B.C., had 35% of its housing units listed as short-term rentals, while Mont-Tremblant, Que., had 16.4%.

Airbnb’s Concerns

Airbnb Canada has questioned the study's methodology, noting that the data used is outdated and does not reflect recent regulatory changes in cities like Toronto. Airbnb argues that the proportion of short-term rentals available for long-term use is significantly lower than reported and stresses that strict regulations have not notably alleviated housing affordability issues in major cities like Toronto and Vancouver.

Recent Regulatory Changes

In British Columbia, new regulations effective May 1, 2024, require property owners to prove their listing is their primary residence. A provincial registry will be implemented by early 2025 to ensure compliance and remove unregistered listings. Vancouver has also introduced stringent regulations, including an increase in annual short-term rental licence fees from $109 to $1,000 starting January 1, 2024.

Conclusion

The role of short-term rentals in Canada’s housing market continues to be debated. While some argue that these rentals could help address the housing shortage, others believe that they represent a small fraction of the overall housing market and may not be a significant solution to affordability issues. As regulations evolve, the impact of short-term rentals on long-term housing availability remains a key area of focus for policymakers and researchers.

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