JohnAmardeil.com

Airbnb is blamed for the low affordability and availability of GTA rental units, but the real issue lies with Ontario’s Landlord and Tenant Board and the Residential Tenancies Act – and of course the fact that we just aren’t building enough.

Now that I’ve retired and am often home during the daytime, I’m seeing things I never noticed before. One of them is how many of my neighbours in Little Italy, Toronto are renting out their lower units on Airbnb instead of as apartments, even though 750 sq. ft. lower level units like ours can fetch as much as $2,500/month.

I’m wondering if Airbnb isn’t entirely to blame, but instead, if our Landlord and Tenant Board’s Residential Tenancies Act is also at fault.

The Landlord and Tenant Board (LTB) has been around since 2006, and the Residential Tenancies Act came into effect on January 31, 2007. It was created to help establish and enforce the rights and responsibilities of both tenants and landlords. Its aim is to resolve landlord-tenant disputes and eviction cases.

As any renter or landlord in Ontario can tell you, it hasn’t gone very well.

The LTB’s budget received cutbacks (2012 to 2014 budget vs. 2017 to 2019 budget) which resulted in a shortage of adjudicators, and the result was delays – a lot of delays. The LTB is unable to effectively and efficiently address issues. For example, bad tenants can notoriously go for 6 to 12 months without paying rent, leaving landlords in a bad spot. The system is broken.

This is why I’m hearing from my neighbours (and wife) that they don’t want to rent out their lower level units. They don’t want the risk of a bad tenant.

The LTB is now acknowledging the extreme service delays that have plagued it and is working to address this issue and to improve its services. But the damage has been done. Landlords can’t count on this system to protect them, and so they’re pulling out of the rental market and turning to avenues such as Airbnb, which offer protections that the LTB doesn’t.

Airbnb offers liability insurance, property damage protection and guaranteed payment collection. Airbnb 1, LTB 0.

Having potential landlords turn away from the local rental market and to Airbnb instead hurts everyone. Rentals in Toronto are scarce, and highly-priced. If we want to increase the supply of rental housing, one way to do so is to better utilize what already exists, and that’s not happening because many landlords find the risks of renting too high.

The main issue is that we just aren’t building enough new rental units, but Airbnb has been getting a lot of blame in the media lately. It’s easy to blame Airbnb, but it’s also our own (broken) LTB and its Act that are pushing landlords to choose alternative, more secure options for renting out the existing available spaces.

If we want more housing options and especially more affordable options available, Ontario’s LTB needs to do things differently.

Here are some of my thoughts:

1. The LTB needs to enforce its own rules if it is to have legitimacy and efficacy. It was created to enforce (and protect) the rights and responsibilities of both tenants and landlords, but right now that’s not happening.
2. Bad tenants should have repercussions, and the LTB needs a way to enforce these repercussions. If a tenant damages a place, there should be a quick mechanism to address it. If they don’t pay and they skip on the rent, it should be easier to go after the tenant.
3. Good tenants should be rewarded. Landlords should be able to access tenants’ records (rental history), just like lenders and sellers on credit (cars on lease, etc.) can check credit ratings. Landlords need more security and stability – more protection. If the costs of being a landlord could be lowered (for example, by not having to budget for tenants who won’t pay rent), then that would lower rental costs for all. And if a good tenant were allowed to better differentiate themselves from a bad tenant, it could help them secure better places. I’m all for this.

As it stands, landlords are encouraged to lie to other potential landlords when their tenants want a reference… just to get them out of their place!

What we need instead is a more effective system, where good tenants are rewarded, bad tenants have repercussions that are actually enforced, and landlords are better protected.

Further, due to the tight rental supply we currently have in the GTA and many other parts of Ontario, we should be not only protecting landlords but also providing incentives for them. We need more people to put their available spaces on the market (like my neighbours with their 750 sq. ft. lower level units), and to build more rental units, like laneway suites or finishing a basement to turn it into a suite. We also need to encourage and provide incentives for more construction.

What are your thoughts on this topic? Comment below or find me on Facebook or LinkedIn to join the conversation!