Canada could crack down on Airbnb

A new crop of rental units complete with “Live, Laugh, Love” signs, hotel lobby artwork, and a baffling array of cutlery could soon be making their way to a city near you.

Driving the news: The federal government is considering measures to encourage cities to limit the supply of Airbnbs as part of its effort to increase the availability of long-term rentals across the country, per The Globe and Mail.

  • The plan—which would likely apply to all short-term rentals, not just Airbnbs—would have municipalities change their cities' bylaws to reduce the number of short-term rentals operating in the city.

  • The federal government is also reportedly considering levying higher taxes on income generated from short-term rentals.

Zoom out: Cities around the world have tightened regulations on short-term rentals in recent years to discourage landlords from taking long-term rental units off the market.

  • New York recently passed a law that essentially banned all short-term rentals in the city, with very limited exceptions.

  • Santa Monica got rid of 80% of its Airbnb listings by implementing rules that require anyone offering rentals for less than 30 days to live on the property during the renter's stay. (Apparently, not everyone wants to share their beach vacation house with a stranger.)

  • European cities like Paris, Barcelona, and Amsterdam created stricter regulations, including banning the purchase of housing specifically to use as a short-term rental and charging higher “tourist taxes” for short-term renters. 

Why it matters: Reducing the number of short-term rentals in cities and towns could free up some much-needed units for locals.

  • Last year, demand for rental units increased at its sharpest rate since 2013, bringing the vacancy rate across the country to a near-historic low. 

  • The average asking price for a rental in Canada reached a record high of $2,117 in August, up $103 since May. 

What’s next: The federal government doesn’t have the jurisdiction to make something like this happen on its own, but is increasingly using tools like its $4 billion Housing Accelerator Fund to push cities to change their housing policies.—LA