Short-Term Rentals Skyrocket in Canada, Fueling Housing Market Controversy

• Canada's short-term rental units jumped 60% from 2017 to 2023, with potential long-term dwellings rising by 80%.
• COVID-19 caused a sharp drop in short-term rental listings, with many units switching to long-term leases.
• The debate continues on whether restricting short-term rentals could help solve Canada's housing crisis.

A history of growth: Canada has seen a significant uptick in short-term rentals over the past few years, with a notable rise in units that could potentially be converted into long-term housing. According to a fresh Statistics Canada report, the total number of short-term rental units skyrocketed by 60 percent between 2017 and 2023. Even more eye-popping, the number of these units considered potential long-term dwellings (PLTDs) surged by 80 percent during the same period. The trend suggests that a substantial chunk of these short-term rentals could be repurposed to tackle Canada's housing needs.

Digging deeper: The report also shone a light on the impact of the COVID-19 pandemic on short-term rental listings. From 2019 to 2021, total short-term listings took a nosedive, falling by 19.2 percent due to a slump in tourism activity. Potential long-term dwellings listed for short-term use experienced an even steeper drop of 28.1 percent. The report hints that many property owners might have switched their short-term rentals to long-term leases during this period. This shift could explain why 2022 marked a low point in the proportion of PLTDs, as many units were still tied up in those year-long leases during the early stages of recovery.

Zooming in: Despite the fluctuations caused by the pandemic, the share of potential long-term dwellings in Canada's total housing stock reached a record high by the end of 2023. This uptick was seen across several provinces, with Ontario's share more than doubling. Quebec saw a leap too, while British Columbia and Prince Edward Island surpassed one percent. In tourist hotspots like Whistler, B.C., potential long-term dwellings made up a hefty 35 percent of the total housing stock.

The big questions: The debate over whether short-term rentals should be restricted to ease Canada's housing crisis rages on. Nathan Rotman, policy lead in Canada for Airbnb, argued that these units represent just a sliver of the overall housing stock and that restricting them wouldn't solve the crisis. “Despite some concerns with the methodology used, as the report concludes, the number of short-term rentals that could be used as a potential long-term home is less than one percent of the overall number of homes in Canada – a small fraction of the 22 million homes needed by 2030 to achieve affordability.”