Toronto’s recent move to ban homeowners from offering self-contained “secondary suites” on Airbnb, came with the intention of increasing rental supply across the city. With the growing housing demands, increasing rental costs, and short supply of rental availability, council claims instigating said ban will improve rental accessibility by incentivizing individuals to instead offer their unit as a long-term rental option. But is this what will likely happen?
Coming into effect July 1, homeowners will only be able to rent out their primary residence. While this gives individuals nearly a year to put an alternative plan into action for their secondary home, the outcome at that time may not be the increase in property rental options as council is hoping. Given that many with a secondary residence have an investment on their hands, which they are looking to make affordable, the option will be to sell or rent long term. For those same people though, long-term tenants will not yield near the income as that of short-term guests, potentially making it an unaffordable solution. And in addition, as some owners argue, the advantage of short-term renting is to still have the ability to use the residence yourself for family and friends, making the idea of long-term rental unattractive.
The change in regulation, while potentially opening up more rentals on the market, won’t necessarily increase the number which are rented long term. In many cases, the short-term rental apartments are rented by Torontonians themselves, who cannot lock into a long-term lease or who pay short-term rental due to travel or job instability. Without these short-term options, warns the city’s director of affordable housing, many of these people may end up in homeless shelters instead, contributing to another already overburdened issue within the city.
While the intent is clear and the idea ideal, in the end, as some express, it may backfire and turn into a black market rental scene, similar to that of New York – despite having its own bans and regulations. While there is a bit of time for the news to settle and owners to make decisions, ultimately, it is also only time that will decide if it was a good decision.