Housing Minister Sean Fraser revealed on Monday that the Canadian government is exploring potential measures to address the surge in short-term rentals, including those on Airbnb, as part of a comprehensive strategy to alleviate the critical shortage of affordable housing. Fraser emphasized the need to make existing properties, currently tied up in short-term rentals, accessible to prospective long-term renters and buyers.
The upcoming fall economic statement is anticipated to introduce billions of dollars in new measures, such as low-cost loans for home construction, to combat the housing crunch. However, Fraser argues that redirecting properties from short-term rental platforms could significantly contribute to expanding the housing supply.
Fraser suggested using taxation powers to reduce the financial allure of owning an Airbnb, aiming to incentivize property owners to sell or offer longer-term rentals to locals. The government’s goal is to make it less financially advantageous for property owners to engage in short-term rentals, potentially prompting them to contribute to the long-term housing market.
One reported tax measure set to take effect on January 1 involves preventing individuals from deducting expenses on short-term rentals in areas already restricted by local regulations. This move aims to address non-compliance with local rules by property owners.
Fraser acknowledged that there might be additional avenues beyond tax measures to regulate short-term rental units, although specific details were not provided. He pointed to British Columbia’s recent overhaul of the short-term rental market as a potential model, where non-principal residence short-term rentals will soon be banned.
The recent McGill University report indicates the significant impact of short-term rentals on housing availability, with approximately 28,510 active listings in B.C. alone in June 2023. Finance Minister Chrystia Freeland signaled the federal government’s commitment to curbing short-term rentals, citing B.C.’s legislation as a positive step.
Airbnb, responding to the proposed changes, asserted that it is not the cause of Canada’s housing crisis. The company referred to a report from the Conference Board of Canada, indicating that the number of Airbnbs is insufficient to significantly impact the country’s housing stock.
The Canada Mortgage and Housing Corporation estimates a need for 3.5 million more housing units by 2030 to accommodate the growing population. As the government explores various strategies, the housing crisis remains a complex challenge requiring comprehensive solutions.
