After years of hoarding housing supply, Airbnb hosts in Toronto panic

21 Iceboat Terrace is not a hotel, but it could just as well be. Located just steps from the CN Tower, the postcard aesthetic that the building conveys has seen many of its 920 condos co-opted into Airbnb units. But what was once a bustling mega-hostel for young partying tourists has become in recent days a monument to coronavirus-induced isolation. The few long-time residents who remain are stuck in a ghost skyscraper, and the Airbnb barons who have taken over many condos across its 43 floors have found themselves without resources.

James O’Dowda has lived in Iceboat Terrace for almost three years. He says the weeks there worked in two phases: quiet Mondays and Wednesdays, when short-term rentals like Airbnbs were dormant, and stormy Thursdays and Sundays, when they filled with revelers.

“This is something that is talked about constantly on our building’s Facebook group,” said resident Erin Orr. “It’s getting frustrating. There will be a lot of drunk people, broken bottles outside, garbage all over the building.

The Iceboat Terrace building is not unique. This is just a plague in the wave of “ghost hotels” across the world. But due to its size and location, the heart of the most prolific Airbnb neighborhood in Toronto — it’s a good case study.

O’Dowda said the room across from him, which was once reserved for weekend renters, is “super quiet now,” which is bittersweet.

“I think it shows that things are far from normal right now, not only in the world but in the city with the way they are renting the units,” he said. “So many people need a place to live, but these places that run Airbnbs are stealing units from the people who need them.”

Until two weeks ago, Airbnb was a gentrification juggernaut, devouring homes and watching profits snowball. A McGill study published last year revealed that Airbnb had likely removed 31,000 homes from the Canadian rental market and that hosts here earned $ 1.8 billion in 2018, a 40% jump from the previous year. Many of those same hosts cannot fill a single unit now; the coronavirus has flushed them out.

According to Inside Airbnb, a project that pulls data from the Airbnb website, 64% of the more than 23,500 Airbnb listings in Toronto were for entire homes or apartments on March 16. This means they probably work in violation of local regulations—Short term rentals here are only permitted in the host’s primary residence. In the Toronto Waterfront area, where O’Dowda and Orr live, that number climbs to almost 90 percent. Worse yet, 42 percent of Toronto hosts and 52 percent of Waterfront hosts have multiple listings.

“When we talk about the impact on housing, the hosts we are concerned about are those who rent multiple homes or apartments,” said Murray Cox, the activist and programmer behind Inside Airbnb. “They are the ones who take housing off the market, displace residents in search of long-term housing, and increase the cost of housing.”

Airbnb says having multiple listings doesn’t necessarily imply wrongdoing and has questioned the reliability of third-party data scraping.

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A map of the Toronto Airbnbs. Each point is an Airbnb, the red dots are an entire house or apartment. Source: Inside Airbnb

Cox, who started watching Airbnb while studying gentrification in Brooklyn, where he lives, knows the publicly available information he has access to is limited. There are situations where having multiple listings could be done legally, such as having different rooms to rent in the same house, but Inside Airbnb still maintains that hosts with multiple listings are “more likely to run a business” and less likely to run a business. live in their listed properties.

Whether they do it by the book or not, these multi-list hosts were making a killing. According to the McGill study, they generated almost half of all Airbnb revenue in 2017.

A trip through Facebook groups for Airbnb hosts, such as Airbnb Cashflow Secrets — Financial Freedom Without Owning Real Estate, reveals growing insecurity among members since the onset of the coronavirus pandemic. What once seemed to be a low-risk, low-manpower money generator has just disappeared, leaving many hosts struggling with rents and mortgages they can no longer afford. Hosts don’t get any short-term reservations and no long-term inquiries, they tell me. And they are mad at Airbnb.

“It’s my main source of income,” said Jay, a host from the Waterfront area, who declined to give his last name. “I rely on it quite a bit. But all of my reservations were canceled with full refunds without a word from me.

Jay said he has since had to cut his rates to “lower than motel prices” to stay competitive. He has also started requiring a minimum 10-night commitment from guests and considers his unit “perfect for self-quarantine.”

Cashflow Secret users say the smart thing to do right now is to pivot to what one member has called “the dark side” – long-term rentals to residents, a problem for the market as users from that particular Facebook group are renting out the apartments they are. bet on Airbnb to make a profit.

“I notice that a lot of Airbnb hosts around me are starting to set up their apartments for long term accommodations,” said Amy, a Waterfront area host, who also did not provide her last name. “But because everyone is doing it at the same time, it’s almost impossible to do it. “

You can see waves of new rental listings coming in real time. Like the town planner Robert Ruggiero highlighted on Twitter 140 new furnished units were listed in Toronto on REALTOR last week alone on Saturday, a jump of about 110% from the previous week.

Cox says this change could have a lasting impact.

“If people convert their short-term rentals to long-term rentals, they’re probably going to find one-year leases,” he said. “Even if the coronavirus only lasts two or three months longer, with these new commitments they won’t be able to quickly switch back to short-term rentals – and I don’t think they should.”

Cox says governments are ultimately responsible for allowing this to happen.

“My opinion is that it is immoral. But you could argue that if the law allows you to do it, then in this capitalist system it is just a business opportunity. It is really up to the government to establish rules so that it is no longer a question of ethics.

Unfortunately, this is easier said than done. Airbnb is extremely difficult to regulate. The app protects hosts by scrambling their locations and hiding their full names. Airbnb is also not afraid to sue local governments, having previously sued San Francisco, Santa Monica and New York over legislation that would disrupt its business.

Even if more information were available, the entries themselves do not necessarily constitute rule violations. The City of Toronto’s solution is to put in place a registration system, which aims to force all short-term tenants to apply for licenses by the end of spring, a move that comes after years of appeals. regulations from experts.

“Airbnb has a significant impact on vacancy rates in several areas of Toronto, which has contributed to higher rental prices, which has negatively impacted housing affordability.” concluded a 2016 article by Tyler Horton, now Senior Policy Measurement and Analysis Specialist for Canada Mortgage and Housing Corporation.

Four years and a global pandemic later, that impact may finally begin to be mitigated. On regulation, Airbnb said in a statement to VICE that it meets regularly with the city of Toronto to discuss its “cooperation on the new rules” as their implementation looms. is filed about them. contact 311 to register a complaint.

For all of us caught in the sea of ​​coronavirus anxiety, the only thing we can afford to savor right now may be the capsize of Airbnb. On a distant shore, there might be a healthier housing market for residents and fewer apartments for affluent tourists.

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