Airbnb is a platform of the online sharing economy. It exists as a short-term rental service, comparable to a hotel. Airbnb serves as an intermediary between hosts and guests, collecting a fee for their service. It exists on the principle that hosts are able to rent out unused space in their residences to guests, presenting guests with a low-cost and unique place to stay.
As an online intermediary Airbnb is difficult to regulate, and the rental economy that has emerged out of Airbnb has far exceeded the scope of residents sharing spare rooms with travellers. Issues have emerged such as the creation of “ghost hotels”, which are “buildings where apartments have been converted into short-term rentals, effectively turning a residential building into a hotel” . Another issue is caused by hosts who exploit the platform, while 16% of hosts have one or more listing on the website, they generate a disproportionate amount of revenue, accounting for 48% of Airbnb’s revenue in Toronto .
The growth of Airbnb is also occurring as the city’s available housing stock has decreased and the vacancy rate has decreased to less than one percent. Airbnb is viewed as contributing to this decrease in available housing stock, especially the rental market. People can charge higher prices for short-term rentals on Airbnb compared to long-term renting, making it more attractive to rent out their property short-term. However, as many cities around the world have discovered, Airbnb is difficult to regulate. There are more than ten thousand Airbnb listings exist in Toronto alone and are spatially fragmented, located across Toronto in unsuspecting residential areas.
This December, Toronto City Council has voted to pass regulations for Airbnb, going into effect on July 1st. This regulation will ban people from listing an apartment or a house for a short-term rental – fewer than 28 days – unless it is their principal residence. Secondary suites – which have their own entrance, kitchen and bathroom – will not be allowed to be listed on Airbnb, unless it is the tenant listing the unit and it is the tenant's primary residence. All hosts will have to register themselves with the city and pay an annual fee of $50 . This is expected to eliminate the issue of “ghost hotels” that decrease available housing stock, and increase the available rental housing stock. The new regulation also introduces a regulation for intermediaries like Airbnb requiring a “$5,000 fee for a licence and a $1-a-night tax for each booking”, as well as requiring all listings to have a valid registration number and to “develop procedures to ‘mitigate neighbourhood nuisances’ such as noise” .
Opponents to these regulations such as City Councillor Gary Crawford argue that short term rentals of secondary units can help homeowners pay for their mortgages . However, this raises the question of who Airbnb benefits; homeowners renting out secondary units benefit from Airbnb while renters are left with a smaller housing stock to rent from.
Advocates for regulating Airbnb include the coalition group Fairbnb, which consists of unions, tenant associations, and tourism businesses. They argue that if left unregulated, difficult to control intermediaries like Airbnb increase the issue of precarity in urban areas across the spectrum. These factors contribute to a decrease in available housing, an increase in precarious employment, and a growing income polarization in the city. Fairbnb advocates for even tighter regulations around Airbnb rentals.
Catherine is a 4th year student at the Victoria College at the University of Toronto studying Human Geography and Geographic Information Systems. She is interested in urban issues, feminist geographies, and health and the built environment. She can be reached at firstname.lastname@example.org or @catherinejiao on Instagram.