Despite making up less than 1 per cent of potential long-term housing stock, short-term rentals continue to shoulder a disproportionate amount of blame for Canada’s housing crisis, and Ontario has become ground zero for this narrative.
The short-term rental (STR) industry has been under scrutiny for the better part of the last decade. Initially, criticism was rooted in concerns about neighbourhood disruptions: noisy guests, parking congestion, and communities losing their character. But this narrative has largely shifted. Today, STRs are being blamed for deepening Canada’s housing shortage.
With immigration at its highest levels in a century, Canada faces unprecedented demand for housing and infrastructure. Construction simply isn’t keeping pace. Under these conditions, STRs have become an easy scapegoat.
Yet the reality is very different: STRs account for just 0.69 per cent of Canada’s potential long-term housing stock. Even in Ontario, where the debate is most heated, this figure remains the same—a negligible fraction.
Less than 0.5% of dwellings are used for Airbnb
A recent study by the Conference Board of Canada backs this up, showing that in most neighbourhoods, less than 0.5 per cent of dwellings are used for Airbnb activity—far too few to affect meaningful housing supply. Still, they continue to attract outsized blame.
This mismatch between perception and data has driven reactionary policy. STRs are easier to regulate than tackling chronic underbuilding, planning delays, or labour shortages. But heavy-handed regulation doesn’t solve systemic problems—it only disrupts a vibrant, community-rooted sector.
Take Toronto, for example. The city imposes strict licensing requirements for Airbnb hosts; without a licence, listings are restricted to stays of 28 days or longer. This has created a split market: licensed operators handle shorter bookings, while unlicensed operators shift toward mid-term stays of 28+ days.
The result? Longer bookings with lower nightly revenue but higher demand. Many now earn 40 to 50 per cent less per booking, trading income for the security of avoiding Ontario’s flawed long-term rental system.
Frankly, that system is broken. Evicting a non-paying tenant through Ontario’s Landlord and Tenant Board (LTB)—which oversees landlord-tenant disputes—can drag on for three to 12 months. Landlords often face months—or even years—without income, while tenants remain and refuse to pay. This puts small landlords in a precarious position, especially amid high interest rates. Short- and mid-term rentals offer a flexible, lower-risk alternative.
STRs remain the target of strict rules
Yet despite their clear benefits, STRs remain the target of strict rules—especially in recreational areas such as cottage regions, where informal STRs have quietly operated for decades. Critics say Airbnb made STRs too accessible, prompting regulators to introduce new controls: licence caps as low as 50 per area, 100-day rental limits and harsh penalties like losing a licence for overstaying by one day. While oversight matters, these measures can unintentionally punish responsible homeowners and erode local traditions.
To be fair, concerns about community cohesion and affordability shouldn’t be dismissed outright. In some high-demand tourist zones, the concentration of STRs may indeed place pressure on rental availability. But that reality isn’t reflected provincewide. The data shows that in most Ontario communities, STRs remain a small part of the housing landscape.
STRs also serve a broader purpose. At Casa Co-Host, around 30 per cent of our bookings are 20+ days, often housing displaced families, infrastructure workers or relocating professionals. These mid-term stays fill critical gaps left by traditional rentals and hotels—especially for guests with accessibility needs, where features like roll-in showers and single-level layouts are often hard to find.
They also align with Canadians’ growing “Buy Canadian” mindset. Amid trade tensions and a shift toward supporting local brands, this ethos has influenced everything from groceries to fashion. But when it comes to travel, that thinking often stops short.
‘Overwhelmingly Canadian-owned’
Most major hotel chains operating in Canada are headquartered in the United States, sending profits south. STRs, on the other hand, are overwhelmingly Canadian-owned—keeping revenue in the community. In 2024 alone, Airbnb hosts in Canada generated $329-million USD in taxes for local governments, including $18 million in Ontario. These funds help finance local services and infrastructure. STRs also support networks of local cleaners, trades, managers, and small businesses, reinforcing local economies.
The vast majority of STR professionals are not fly-by-night operators. They’re property owners, small business owners, and community members doing things the right way. Criticism of property management companies, often dubbed “Shadow Airbnb,” also misses the mark. These aren’t faceless corporations; many are still family-run, managing properties on behalf of others in the community. They’re “mom-and-pop” in spirit, but with the structure and tools to run operations professionally. They bring consistency, accountability, and better guest service.
Technology is also helping raise the bar across the board. Software platforms enable hosts to automate guest communication, manage damage protection, enforce rental agreements, and streamline operations. These tools support the growing professionalism of the sector without removing its personal touch.
The STR industry is evolving, and it’s being shaped by people and platforms that prioritize responsibility and long-term sustainability.
Yet, outdated legislation continues to pose challenges for hosts. In Ontario, those who wish to accept direct bookings are required to register under the Ontario Travel Industry Council (TICO) — a regulation designed for traditional travel agents, not modern property operators. While TICO’s aim to protect consumers is commendable, its current framework can unintentionally stifle small, local businesses. What’s needed is a flexible approach that upholds protections while accommodating today’s digital economy.
Let’s focus on the real issue
Short-term rentals make up less than 1 per cent of Ontario’s long-term potential housing stock. The idea that they’re driving the housing crisis isn’t supported by data. The real problems lie in chronic underbuilding, planning delays, a shortage of skilled trades, and a failing LTB system—issues that need serious attention.
With the right regulation, STRs can boost local economies, fill housing gaps, and strengthen communities. What Ontario needs now is policy grounded in reality, not rhetoric.
Short-term rentals aren’t the villain. It’s time we stopped treating them like one and start working together to serve the needs of our communities.
David Hillar is the co-founder and co-owner of Casa Co-Host Inc., a leading short-term rental property management company operating across Southern Ontario and Alberta. David co-founded Casa in 2020 with a clear mission: to bring premium customer service and hospitality standards to the short-term rental space. Today, Casa Co-Host manages more than 100 properties and is supported by a dedicated team of 10 property, operations, and communications managers — all focused on delivering exceptional guest and owner experiences.
I totally agree. When one STR, or one property is the only income for the owner, it’s really sucks for the city to put those restrictions. Since the long-term tenants don’t pay their rents can we the owners not paying the property taxes?
Also, it’s the government which has created the housing crisis, we the smaller owners don’t want to be the ones to fix it.
This is a repeat – yes?
First time I have written this article.
Ahhh you missed the target. No one has ever said short term rentals are the issue. The issues are builders are not building the proper affordable homes consumers want. Are you not familiar with the term, “the missing middle.” Building faster is not realistic. Building in Ontario has been at record levels. Resources are exhausted, there is not enough labor and affordability is a big issue. It will take a decade or more for the housing issues to resolve themselves. All those airBnB’s are taking a hit now. Have you not read about the glut of unsold new condos, plus the number of condos listed for sale? This indicates that those investors are leaving the market place right now. So no shortage of these 450sqft Toronto condos. Listing inventories are increasing across the country and mortgage delinquencies are on the rise. The country was crying for new leadership, then went an elected the same party! Whats up with that? Same old, same old. What governments should be focused on is building a robust economy based on capitalism not socialism. Government jobs and unsustainable immigration to boost spending are not solutions to the housing issues in Canada. Canadians need high paying jobs to afford to buy a home in Canada. Lowering interest rates will help but as values remain high interest rates is not the fix. Facts are real estate values have to come way down, the economy needs to improve and immigration has to be based on need and sustainability. The country needs to have infrastructure in place before population can increase.
There are many citations about Airbnb being a major contributing factor to the housing crisis. An article in Macleans last year included that in their journalism. It was heard a few times on the campaign trail in the latest federal election as well.
Very interesting article with a lot of good points. Perhaps the real problem is nested in the article, over-regulating by governments.
First, it is preposterous to ask an asset owner to use its asset for less than its highest and best use. If there is a shortage of housing, the answer is never as simple as rounding up the usual suspects.
Back to regulation, who can blame an owner from switching to short term rentals when the political leaders have made landlording so onerous? The scent of vote pandering is wafting through the entire anti-STR argument. Not only vote pandering but an attempt to deflect the housing shortage blame from where it rightly belongs, government.
I agree. I do think there are some standards and requirements that are needed (think the Ontario Building Code) but the regulation and licensing process seems onerous in many cases, rife with technical suspensions and high fees. In many ways a tax grab.
Fix the Landlord and Tenant Board backlogs, make it super efficient, and you’ll see more STR’s come back to long term rentals.
Exactly.
I totally agree with this article. As a former STR owner/operator and traveller Airbnbs are a great alternative for travellers and others alike. I used to house insurance claimants, contract workers, families visiting family, homeowners between closing dates. I was not “stealing” from the long term landlords. There may be a shortage of long term rentals, but there is also a shortage of short term rentals. I feel like cities are making it harder and harder for STR owners to operate. Hotels are not the answer for STRs. I worked my butt off at my STR and without exception the families that I hosted appreciated being able to stay together in an entire house rather than a hotel room somewhere. And on the other side of the coin as a traveller myself I much prefer to stay in my own space rather than cramped in a hotel room.
Good article.
The current Landlord/Tenant rules are so lopsided in favour of tenants, costs of taxes, financing, maintenance, and insurance rising so rapidly in relation to the ability to increase rents – it just makes short term rentals look so much more attractive.
From the viewpoint of the short-term user, so many hotels in larger centre’s have “crazies” in the downtown neighborhoods and even renting the rooms with government assistance. Not safe for families or seniors.
The problems all around are caused by all levels of government buying votes.
The owners we speak to do not have profit as the primary motivation – they are fatigued by the stress of long-term rentals, or have flexibility as a key motivator – they can use their owned property from time to time as they see fit and can sell much more unencumbered than having to navigate exit with a tenant in place. Income is a motivator to be sure, but I rarely find it to be the primary one.
So check out the dandy running around the mono-pile-o-money game board!. Profiteering – land, materials, labor, lenders [building interest rates], big and ornamental housing/condos and developer $$$ profits. But what about consumer attitudes. Back in the day a family of 6 would. have a 1000sqcft bungalow with one bath close to a place of worship – now 3000sqft with 4 or 5 bathrooms close to shopping centers and high end dealerships. Yes, Values
Yes, David, all those reasons are a part of the deck being stacked against property owners.
Agreed. Regulatory oversight in municipal and federal tax laws fail to fairly allow for revenue generating opportunities. In Ontario the Residential Tenancies Act (“RTA”), the law, regulations, and enforcement falls very short of fairness. And that was a leading cause for some rental property owners to seek relief via STR. Yet the STR is also not a panacea of goodness: managing the STR, adjusting to constant algorithm changes by the STR application, is itself challenging to the point of moving some back to ordinary lease arrangements – the risks of which are high notwithstanding. I like the observation that most formal short term hotel corporations are US owned, and that is something to consider as important. Still, homeowners who are in the STR space are in competition with already recognized business who are subject to regulation; seems a bit more than unfair to allow an STR to operate unregulated. Still, it is the form and content of the recent regulations that seem unwarranted. The restriction on 28 days is a reflection of the days set out in the RTA to define a rental arrangement, seems convenient. And about the fatigue of long term rentals, it is actually an easier gig to manage, yet the risk is higher and less easy to adjust to insuring success financially. A good article. Wish the various governments would stick to their lanes, cities involved in residential rental matters sucks.