In the article attached, the City of Toronto has decided that forcing investors to turn their purpose-developed short-term rental units is the right thing to do to help solve the City’s housing crisis.
Affordable housing, as important as it is, is not the reason investors choose a short-term rental model. They are seeking a respectable ROI. So now, those units are supposed to become single-family residences. Will they garner the same rents, and therefore a similar ROI? No.
The City needs to subsidize short-term rental turnovers if they want investors to continue putting hundreds of thousands of dollars into upgrading old, sometimes derelict properties. If the idea of ROI is not considered, then creating more housing out of short-term rentals will be shortlived. Why? Because those investors not getting the returns they sought will simply sell and move onto something more lucrative (like duplexing in Greater GTA areas such as Brantford, Welland and Niagara Falls).
Then we’ll have a housing shortage again. The solution isn’t to terminate or restrict short-term housing, it’s to make single-family, affordable housing more lucrative to an investor who’s money the City is seeking ultimately. Then more investors will be willing to put their money into that model. Subsidies would accomplish that but where would the funds come from? Perhaps they can divert some of the fees they will now be getting from those investors who try valiantly hang on to the short-term rental model.
For info on duplexing in the Greater GTA, click here and search the page for “Second Suites”
OR check out these videos on building a basement apartment (Second Suite)