Impact of Short-Term Rentals on the Housing Market in Canadian Major Cities

The rise of short-term rental (STR) platforms, such as Airbnb, has profoundly affected the housing markets in major Canadian cities, particularly Toronto and Vancouver. This paper explores the multifaceted impacts of STRs, including the reduction of long-term housing availability, increased rental prices, and disruptions to neighborhood stability. Through a mixed-methods approach, the study combines quantitative analyses of STR densities and housing trends (2019–2023) with qualitative evaluations of municipal regulatory frameworks. Findings reveal a direct correlation between the proliferation of STRs and housing affordability challenges, as properties are diverted from long-term leases to more lucrative short-term uses. This trend intensifies pressures on already constrained housing markets and disproportionately affects lower-income residents. The paper examines case studies of regulatory responses, highlighting Toronto’s Municipal Code Chapter 547 and Vancouver’s STR by-law, which attempt to mitigate these impacts through licensing and compliance measures. Despite these efforts, enforcement challenges persist due to resource limitations and regulatory loopholes. Comparatively, smaller municipalities like Victoria and Gibsons have achieved greater success by implementing stricter enforcement and zoning policies, effectively preserving affordable housing while accommodating tourism. This research underscores the need for enhanced enforcement, robust data collection, and more targeted policy designs to address the socio-economic tensions STRs create in urban housing markets. By drawing on successful practices from smaller jurisdictions, Canadian cities can better balance the dual objectives of fostering tourism and maintaining housing affordability.