Number of 'ghost hotels' in Toronto contributing to housing crisis, surging prices, critics say

Advocates say short-term rentals listed on Airbnb are showing up in some Toronto condo buildings in concerning numbers, contributingto the deterioration of local neighbourhoods and the surge in rental prices.

A new analysis of City of Toronto data by non-profit advocacy group FairbnbCanada found that600 short-term rentals, also known as STRs, are located within three condo buildings alone.

The group's executive director,Thorben Wieditz, says it raisesconcerns over whether these units are operating as "ghost hotels" without being zoned or taxed that way.

"We see homes that have been planned, approved and builtasresidential units being converted into hotel use, you know, at a time when it's very difficult for people to find a place that is accessible and affordable," said Wieditz.

"Once people start buying up, leasing up housing stock to turn it into hotel units, that's when we see these issues and that's what impacts ...neighborhood cohesion, neighborhood feel, but also obviously the housing market."

WATCH | Airbnb landlords, renters on how short-term rentals impact thehousing market:

Airbnb hosts vs. renters: a tough conversation about the housing crisis

1 year ago

Duration 17:45

Many Canadians are struggling to find housing, but are short-term rentals part of the problem? The National brings together landlords who have turned to Airbnb and long-term renters who feel like they're being crushed by soaring rent prices and the shrinking availability of rental properties.

While the numbers may seem like a drop in the bucket compared to the overall housing stock, Wieditz says every unit counts during a housing crisis when the city's vacancy rate is high. And withrentals becoming increasingly prevalent in local housing markets, creating new opportunities for tourists and an additional revenue stream for some homeownersthe growth has also renewed concerns about the financialization of housing.

That's why the advocacy group is pushing for the city to look into whether property management companies or hosts in the listed buildings are inaccurately declaring their units to be primary residences in order to qualify for the city's short-term rental permit only to convert the units into dedicated commercial rentals.

"Losing housing stock to platforms like Airbnb is a big problem, [it] contributes to housing cost increases, rent increases. It makes life more unaffordable for people who need to live and work in certain areas,"Wieditzsaid.

The City of Toronto's opendataportal, which now includes addresses and unit numbers of all registered STRs,shows the top three condos with the highest number of unitsare the Harbourfront ICE condos at 12 and 14 York Street with 236 units, 300 Front Street W., with 195 units and the Parade Towers at 15 and 21 Ice Boat Terr with 166 units.

Another neighbourhood Fairbnb highlights that is densely populated with STRs is Spadina-Fort York with 2,058 units taking up about one-third of Airbnb's total inventory in Toronto.

Stricter regulations won't solve housing crisis: Airbnb

In a statement to CBC Toronto, Airbnb spokesperson says at a time when many are facing an affordability crisis, short-term rentals provide hosts the chance to earn additional income

"Short-term rentals also bring an influx of visitors, often to areas outside the downtown core, that help bring tourism spending to businesses in every corner of the city," said Airbnb Canada policy manager Alex Howell.

"The reality is, stricter short-term rental regulations will not solve the housing crisis in the city, but what they will do is take income away from those that need it, and visitor spending away from communities."

Howell added that it is ultimately up to the city to verify listings and enforce bylaws.

"The City has the tools they need to ensure hosts are in compliance."

Serena Purdy, chair of community group Friends of Kensington Market, says theneighbourhood has lost a sense of community as a result of the increasing amount of STRs.

"We just started hearing construction noises and seeing units become smaller and smaller and seeing our long-term neighbours not be replaced by long-term people," she said.

Purdy says overtime, she has noticed fewer and fewer permanent neighbours instead,morecombination lock boxes, digital locks andmore visitors staying in the area.

In 2020, the city brought in new regulations that allowed owners to only rent out their primary residence on short-term rental sites a move that was meant to ensure homes, condos and apartments aren't funnelled off into the short-term rental market as investment properties, instead of being available for Torontonians to rent long-term.

While those rules were meant to help crack down on the market, Purdy says they did not have the desired outcome.

City to hold public consultations, re-evaluate bylaw

Gord Perks, Parkdale-High Park councillor andthe chair of the planning and housing committee, says regulating operators has been a challenge for the city.

"The operators and a lot of the people who are renting their places out are using every trick in the book to evade our regulatory framework," Perks told CBC Toronto.

Currently, the city has assigned nine bylaw officers to monitor short-term rental operations. In an email to CBC Toronto, the city said atotal of 22charges have been laid since Septemberthis year, and more than 1,100 complaints have been made to the city.

"Even if we had 1,000 bylaw officers, the way the company has been behaving and the really awkward tools we're allowed to use under provincial law means getting convictions is really hard," Perks said.

"We've gotta first, I think, tighten up some of those bylaws, tighten up the reporting requirements, get the company to do a better job of being a good actor here, and then I think we'll see more success."

The city will hold public consultations on Oct. 17 and 24 to evaluate the implementation of thebylaw, examine its progress and identify areas for improvement.