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The Impacts and Implications of Restricting Short-Term Rentals in the GTA

The housing market in the Greater Toronto Area (GTA) has long been under the spotlight, battling challenges such as affordability and scarce supply. Notably, the rise of short-term rentals through platforms like Airbnb has emerged as a significant player impacting housing dynamics. Recently, however, the province has placed restrictions on short-term rentals – a move widely commended by urban planning and real estate experts.

The New-Shake Up: Restricting Short-term Rentals

Reflecting on the latest changes introduced in the province, Mark Holland, a Planning and Real Estate professor at Vancouver Island University, argued for the imperative nature of these restrictions in tackling the GTA’s housing shortage. “I think in a housing crisis, this is a very legitimate policy move for the province to make,” Holland suggested.

Alleviating the Housing Crisis

The new legislation, coming into force on May 1, allows short-term rentals only in the host’s principal residence and one secondary suite or laneway home, provided they comply with municipal or strata bylaws. Implementing this change, the province hopes to pull thousands of the projected 16,000 short-term rental units in BC into the long-term rental market. In doing so, this might significantly ease the housing shortage plaguing the region.

In addition, the government has set up an enforcement unit and a provincial registry to monitor the sector, promising hefty fines of up to $3,000 per day for violations.

Trade-offs: Tourism, Construction, and Competition

While this legislative step might bode well for long-term housing, it’s set to have some collateral consequences too. According to Holland, this measure could strain tourist-accommodation capacity and lead hotels to hike rates, at least in the short term. “We can expect to see a surge in the construction of hotels and motels across B.C., probably particularly in urban areas, to respond to this,” he indicated.

In effect, re-routing the tourism demand back to hotel accommodation could spur construction development in the sector, thereby balancing out the supply-demand dynamic in the mid-term.

Housing Before Hospitality

However, sympathy for homeowners who relied on short-term rental income must not overshadow the pressing need for long-term housing. Holland rightly pointed out that housing prices are still high, and the units can still be lucratively rented out or sold in the long-term market.

In terms of urban planning, diverting short-term rentals into very specific areas have known benefits, particularly for residential neighbourhoods. It can limit disruptive noise and party-like atmospheres generated by short-term visitors and temper the inflation in housing prices driven by the property’s potential for generating short-term rental revenue.

A Sensible Approach

Housing needs and affordability have been significant concerns in the GTA for years. In the face of such a crisis, the tightening of short-term rental restrictions can provide a pragmatic solution. It may not only create room for more long-term rentals and affordable housing, but it also signals a need for the right balance between tourism, housing, and neighborhood harmony. The timing and execution of these changes will play a central role in shaping the outcome of this policy move, providing a fruitful case study for other regions grappling with similar housing dilemmas.

FAQs About Short-Term Rentals

In Ontario, a short-term rental generally refers to all or part of a home used to provide sleeping accommodations for any rental period that is less than 28 consecutive days. Examples of short-term rentals include stays arranged through platforms such as Airbnb, VRBO, and

Yes, you can rent month-to-month in Toronto. After the initial term of a lease (usually 12 months), residential tenancies in Ontario automatically become month-to-month leases under the Residential Tenancies Act, unless the tenant and landlord agree to renew the lease for a fixed term. A tenant can also negotiate a month-to-month lease from the start of the agreement, although this might be less common.

Yes, a landlord can increase the rent on a month-to-month lease in Ontario, but regulations apply. Landlords can only increase the rent after 12 months have passed since the last rent increase or since a new tenant has moved in. They must provide a written notice to the tenant at least 90 days before the rent increase takes effect. As of 2023, the Ontario government caps rent increases at a set annual guideline, which is 1.2% for 2023.

Airbnb guests are not usually considered tenants under Ontario law if their stay is less than 28 consecutive days. They are generally classified as licensees, not tenants, which means they do not have the same rights and protections under the Residential Tenancies Act, which applies to traditional landlord-tenant relationships. This distinction may vary based on specific circumstances, and legal advice may be required for complex situations.


In conclusion, the recent restrictions imposed on short-term rentals within the Greater Toronto Area present an innovative approach in addressing the deep-seated issue of housing availability and affordability. While this move may cause temporary disruption in the tourism and hospitality sector, it is a strategic recalibration aimed at restoring balance in the housing market. The long-term benefits are likely to outweigh the potential short-term inconveniences. This situation will serve as an instrumental case study for future urban planning and housing policy adaptations, not just in Canada but potentially worldwide.