The landscape for short term rentals in Toronto is changing dramatically. Two factors are going on at the same time but they are totally unrelated.

First, short-term rentals were temporarily banned in Ontario during the COVID lockdown. Although that ban has been released, a lot of Airbnb owners saw the writing on the wall and decided that, with a huge drop in tourism in the city due to COVID, they should either sell their unit or convert it into a long-term rental unit. Thus, we saw rents in Toronto go down and we saw an influx of condo units hit the market this summer.

Second, about three years ago the city of Toronto voted in huge restrictions for short term rentals. After a few years of fighting with Airbnb, they are finally going to start enforcing these rules. The rules are:

A.You can only rent out your primary residence on a short-term basis.

B.You can rent out up to three bedrooms in your principal residence for an unlimited number of days a year. You can only rent our your whole primary residence for 180 nights per year.

C.You must register with the city of Toronto and show your registration number on your listing.

D.Only primary owners can get a registration number.

E. you must pay a 4% Municipal Accommodation Tax quarterly to the city.

Both of these changes are going to alter short term rentals in Toronto. This is both a market demand issue and a significant regulatory change. We wholeheartedly support anything that makes the long-term rental market in Toronto more attainable because it helps to keep our downtown vibrant and diverse. It is too early to tell if an inevitable influx of condo units to the market is going to cause condo prices to dip. Likely they won’t because we still have so much demand, but if prices do drop it will likely be temporary until we clear the initial rush of inventory. There are a few buildings downtown that are notorious for hosting Airbnb guests. I have done showings in some of them and felt the whole time like I was in a poorly managed hotel. Those buildings will likely see a more long-term hit in value. Overall though, we are optimistic about the impact these changes will have both in the rental and resale markets.

• Robyn VanderVennen
  The Kim Kehoe Team