When Airbnb launched in Canada, it grew rapidly within a regulatory vacuum, impacting housing security, supply and affordability as well as community safety.
Times have changed; we understand a great deal about how to effectively regulate the short-term rental industry so as to preserve core benefits (allowing residents to supplement their income by renting space within their own homes, increasing tourism offerings) while addressing harms (reducing current/future housing supply, accelerating community-wide housing cost increases, nuisance/danger).
Backed by peer-reviewed academic research, we now understand that effective short-term rental regulations in municipalities experiencing housing distress have three key components:
- Principal residence restriction. Allow residents to rent out space to guests within their own homes but prevent the conversion of residential homes to tourist accommodations (also known as “ghost hotels,” “ghost hostels,” or dedicated/commercial short-term rental units)
- Short-term rental registration system. To support a principal residence restriction, hosts should be required to register or license their units with local governments, providing robust proof of identity and principal residence status. We recommend these registration systems be created by Provincial governments to support the participation of smaller municipalities.
- Platform accountability. To ease the regulatory burden on local governments, platforms like Airbnb, VRBO, Booking.com and Expedia should likewise be required to register and license their businesses in jurisdictions where they offer listings, and to proactively ensure only legal, registered listings are sold through their sites, working with local governments to remove uncompliant hosts/listings.
