Vacancy rate for apartments getting even lower
By Geremy Bordonaro
If you’re coming to the Annex for a quick visit, you’re in luck. From hotels to condos to student residences, there’s lots of places that will give you a taste of what’s it like to live in Toronto’s most livable neighbourhood. If you actually want to live here, however, you’re out of luck. Long-term housing, especially affordable housing, is at a premium.
“We’ve got units being used in, essentially, a hotel function in residential communities” —Mike Layton, Ward 19, Trinity-Spadina
And some say that’s because of the very perk available to visitors: short-term rental units, offered online through services like Airbnb, Flipkey, and Homeaway. Potential renters are being forced out in favour of hosts who rent out exclusively on online services to make a steady profit off short-term renters.
“The data is pretty clear. There are thousands of units that are being pulled off the rental market currently,” said Geordie Dent, executive director of the Federation of Metro Tenants’ Association. “What that means is that the city, which is under a housing crisis, continues to suffer and this exacerbates that.”
Neil Wright of Wright Real Estate said the situation has become so bad that he’s wary of those who want to purchase rental properties.
“I’ve had a number of people call me and ask me if we had any rentals that they could look into,” Wright said. “And these were people accumulating rentals that they had no intention of renting themselves. They wanted to rent them for Airbnb. It’s a huge business.”
“We’re in a situation where we’ve got units being used in, essentially, a hotel function in residential communities,” said Mike Layton (Ward 19, Trinity-Spadina). “The platform allows for us to really modernize some things that were legal in the past, like sublets. But it also has a dual purpose of allowing things that would otherwise not be permitted by our by-laws. For instance, some of the hotel-like arrangements.”
Such hotel-like arrangements have a big impact in areas of the city that are especially desirable.
“You can look at places like Kensington Market, Liberty Village, and the Annex where there is a really sought after place for people to live and visit,” Layton said. “People come here and they can’t afford to live there because of the lack of availability of units.”
The City of Toronto has responded by proposing new regulations that would require short-term rental companies and operators to register with the city. Short-term rentals would only be permitted in the principal residence of the owner or tenant, and would be limited to the entire dwelling unit, a secondary suite or up to three rooms rented for up to 28 days. The proposed regulations are now undergoing public consultations.
The city is particularly concerned with losing future rental units — such as those from Westbank Corp.’s Mirvish Village development — to a service like Airbnb.
“The fear is the loss of residential units. And thereby increasing the cost of renting,” Layton said. “When you see that sheer number of units up on Airbnb you know that that is taking away units from dozens, maybe hundreds or thousands, across the city. When you have a vacancy rate as low as ours, those units count.”
It’s a case of finding balance. Some Airbnb hosts provide a great service renting out the units they live in, and aren’t taking a potential rental unit out of the market.
“I know a number of people doing this and they’re very excited about it. They have beautiful accommodations in the interior,” Wright said. “It’s quite like a junior B?&?B. People get a taste of how to deal with management and proper etiquette of having guests coming into their home.”
Some of those people fear the impact the proposed regulations could have on a much-needed source of income. “I rent out a small unit and the regulations would definitely hurt me,” said an Airbnb host in the Annex who wished to remain anonymous for fear of backlash. “I use that income to help support myself, pay for rent and all that stuff. I need this money to survive in the city.”
Layton is sympathetic. He hopes the public consultation process will help make sure the regulations won’t hurt people who rely on Airbnb to help meet their cost of living.
“Not all of it is something that would have been on the housing market otherwise and that’s the careful piece that we have to determine. What is the level of intervention that our government needs to do to protect our communities from these party hotels that are popping up but at the same time protect affordable housing? It’s a very difficult line for a regulatory perspective, but we’re working on it.”