MORE LANDLORDS CONVERTING UNITS INTO SHORT-TERM RENTALS
Some Ontario landlords are looking to change their long-term rental units into short-term leases where they stand to make more profit and face fewer challenges with the province’s backlogged tribunal, according to two landlords with groups representing rental operators.
The trend comes as Canada grapples with a shortage of housing that’s driving rents and mortgage costs higher.
Amid these sky-high rental costs and lengthy delays at the Ontario Landlord Tenant Board, landlords fear they could get stuck paying for their own mortgages without the help of reliable rental income from tenants, Davelle Morrison, broker at Bosley Real Estate Ltd., told BNNBloomberg.ca in a phone interview.
“It takes landlords eight months just to book an appointment with the tribunal if their tenants are giving them problems and (they) often feel the board’s rules are not on their side,” said Morrison, who is also president and chair of the Licensed Short-Term Accommodators of Prince Edward County.
The tribunal delays leave many landlords stuck paying higher mortgage costs amid the heightened interest rate environment, Morrison said – and that’s prompting some Ontario landlords to take their properties off the long-term rental market and list them as short-term rentals.
“These landlords know that if they have a short-term rental property, they get the rights back in their favour, they have more control over their own properties, and quite frankly they can make more money,” she said.
Morrison said there is a rise in landlords with long-term rental properties looking to switch to short-term leases that can be found on websites such as Airbnb Inc. and Vrbo, depending on the licenses and jurisdictions they are operating their property in.
Rose Marie, vice chair of the Small Ownership Landlords of Ontario (SOLO), has also observed the trend of landlords looking to switch long-term rentals into short-term offerings.
More tenants are unable to keep up with rent as costs rise, Marie said, telling BNNBloomberg.ca that delays at the tribunal meant to mediate such issues are putting landlords in a financial pinch while they wait for their cases to be heard.
She said the wait time can lead to bankruptcies or prompt some landlords to sell off their properties, “as they are unable to evict a non-paying tenant in time.”
Many of the landlords she works with are looking to move into the short-term rental space as a result of those pressures, Marie added.
“The people who are providing housing are not being supported or incentivized to continue to operate long-term rental properties in these conditions,” Marie said in an interview.
In an emailed statement to BNNBloomberg.ca, Tribunals Ontario said it recognizes processing times at the Landlord and Tenant Board (LTB) “are longer than we wish them to be.”
“We understand the impact that delays have on those who access our services,” the statement said.
A spokesperson said the tribunal is working with the government to increase the number of adjudicators to address the backlog of cases.
HOUSING SHORTAGE AND RISING COSTS
As Canada contends with a shortage of housing and skyrocketing rental costs, some have blamed short-term rentals for worsening the problem.
The rise of short-term rentals within a neighbourhood has been linked to an overall increase in rent, according to research led by David Wachsmuth, Canada research chair in urban governance at McGill University.
“The evidence is clear, that commercial short-term rentals increase housing costs,” Wachsmuth told BNN Bloomberg in a television interview.
In the last year, the number of short-term rentals has grown incredibly quickly in British Columbia – almost 20 per cent year-over-year – and the result is a lot less housing available for long-term residents in B.C., he explained, along with a boost to the rent they can expect to pay.
“For every additional commercial short-term rental that a neighbourhood has per 100 rental units, we should expect to see the average monthly rent to go up by $49,” Wachsmuth stated.
He recommended that cities in Canada experiencing severe housing shortages should consider banning short-term rentals and just focus on home sharing, where a landlord can rent out a room from their primary property.
AIRBNB SAYS THEY’RE NOT TO BLAME
Airbnb said its platform and similar services should not be blamed for higher rents in Canada.
“The reality is, Airbnb listings in Canada represent less than one per cent of our country’s overall housing supply and the majority of Canadian Airbnb hosts list their home as a way to support their own housing affordability,” Nathan Rotman, policy lead for Canada at Airbnb, told BNNBloomberg.ca in an email on Wednesday.
He argued cities such as Toronto have regulations around short-term rentals, but that hasn’t stopped rent from rising 25 per cent in Toronto this year.
“While we’re always willing to work with government to address community concerns, we know that strict home-sharing regulations have not alleviated the housing crisis in some of Canada’s largest cities,” he said.
Story by: BNN Bloomberg