Why Quebec's law designed to crack down on illegal Airbnbs isn't working

Montreal has a serious problem with illegal Airbnb listings.

And despite efforts from the province, the city and various boroughs to crack down, it's getting worse.

A recent map of Airbnb listings in Montreal from the independent watchdog group Inside Airbnb shows that more than 95 per cent of the roughly 12,500 Airbnb listings in Montreal in December were unlicensed.

That's second only to Washington, D.C. in North America for unlicensed listings in cities tracked by Inside Airbnb — but Washington's law requiring licensing started being enforced just last month.

"It's really too bad because I think Quebec has the best system in the whole country on paper," David Wachsmuth, the Canada Research Chair in Urban Governance at McGill, told CBC in an interview last week.

"The simple story is that the province put a very good set of rules in place but has not put in any effort to make sure that anybody follows those rules," Wachsmuth said.

Wachsmuth and other experts say there's an easy way to improve the system. But so far neither the city nor the province seems interested in following through.

Not for lack of trying

In most of North America, it's up to municipal governments to regulate short-term rentals.

In 2015, under the previous Liberal government, Quebec became the first province to implement provincewide rules. 

Airbnb hosts had to register with Revenu Quebec or they could face fines.

But the rules were barely enforced. In the first year they were implemented, the total number of fines assessed was zero.

Just before the pandemic, the CAQ government toughened the rules, requiring anyone listing a short-term rental to pay for a registration number and display it on their listing.

The city of Montreal introduced tougher rules as well, allowing some boroughs to restrict where certain Airbnbs (those that are not someone's primary residence) could operate.

Revenu Quebec says things are improving.

The number of fines assessed in the province has increased dramatically since 2019, going from 43 that year to 125 in 2020 to 911 last year.

But that doesn't seem to be acting as a deterrent. The number of illegal listings in Montreal and across the province keeps growing.

Wachsmuth said tracking down individual Airbnb hosts, establishing who they are and then fining them isn't easy.

"The government plays the role kind of like a private detective and tracks down people who are doing what they're not supposed to be doing," he said.

"Realistically there are tens of thousands of short-term rentals in Montreal alone and probably 100,000 across the whole province," Wachsmuth said.

"There's just no way Revenu Quebec can keep up with those kinds of numbers," he said.

Contributing to housing crisis

Affordable housing advocates say all those illegal short-term rentals leave very little space for people looking for a place to live as the traditional July 1 moving deadline approaches.

"What they are doing is draining the housing supply," Cédric Dussault, spokesperson for the Coalition of Housing Committees and Tenants Associations of Quebec, told CBC.

"In recent years, we have lost thousands of apartments in Montreal to short-term rentals," Dussault said.

Wachsmuth pegs that number at about 6,000. It may not seem like a lot, but he says it makes a big difference.

"Removing this chunk of short-term rental apartments off the market makes it substantially harder to find a rental apartment in Montreal," he said.

He said most short-term rentals are downtown, but the entire city feels the pain.

"The consequences kind of ripple out, because there are fewer rental units available," Wachmsuth said. "That increases the prices for everybody who's looking."

"It's a significant contribution to the housing affordability issues here in the city," he said.

So what's the solution?

Dussault says from a tenants' rights point of view,  the simplest way to solve the problem would be to ban Airbnb from operating in Montreal outright.

"Airbnb is a really powerful lobby," Dussault said.

"It does a lot to circumvent the rules and rules and regulations. So what we are proposing is ban it completely," he said

Wachsmuth said there's a much simpler solution that would allow Airbnb and other short-term rental sites to continue to operate, one that's been proven to work in other jurisdictions.

Instead of going after individual Airbnb hosts, Wachmsuth said the province needs to target Airbnb directly.

"Platforms need to be held responsible for enforcing these rules themselves,"  Wachsmuth said.

He's not the only one touting this idea.

Murray Cox is the man behind the map that so clearly illustrates Montreal's problem.

Cox started the Inside Airbnb project in 2014, when he was teaching some kids at a summer camp in Brooklyn about gentrification and how to use online mapping and open-source data to track it.

Cox and a bunch of other partners started using publicly available data from Airbnb to track unlicensed listings in various cities around the world.

"Cities that have a mandatory registration requirement, typically when they start out, you'll have compliance rates as low as five, 10 or 20 per cent," Cox said. "It's a very common problem."

But Cox said many cities are now making Airbnb responsible for unlicensed listings, instead of targeting individual hosts as Quebec does.

San Francisco, for example, adopted a law in 2015 prohibiting Airbnb from advertising or accepting transactions from listings that weren't properly registered.

Under the law, Airbnb is fined a $1,000 a day for every listing that isn't properly registered.

"They went from only 20 per cent compliance to almost 100 per cent compliance," Cox said.

He said the requirement also reduced San Francisco's total number of listings by half, from about 8,000 to about 4,000 in a matter of months, which helped ease the housing shortage there.

Some Canadian cities are also adopting that model.

While the results aren't perfect, they're certainly better than in Montreal.

According to Inside Airbnb, the number of unlicensed listings Toronto is 67 per cent. In Vancouver, which has some of the strictest Canadian rules, it's just over 29 per cent.  

In Montreal, remember, it's 96.5 per cent.

Wachsmuth said Airbnb often challenges such proposed laws in court, but there are now several precedents in North America that have upheld such laws.

He said in Vancouver, the city was able to negotiate a deal with Airbnb without the matter going to court.

And he doesn't see why Quebec couldn't do the same thing.

Airbnb hosts say they're unfairly targeted

Some Airbnb hosts in Quebec who've been fined by the province agree.

Dozens of them have posted to a community message board on Airbnb's site, complaining that Revenu Quebec is going after them in a heavy-handed way, while Airbnb itself faces no repercussions.

CBC spoke to one of the people who'd been fined. She didn't want her name used because she's still challenging the fine in court.

She and her partner had been renting out a family heritage home in a small village in the Beauce region and then using the proceeds to renovate.

She said it's true she and her husband operated the Airbnb for a few months in 2021 without a license, but she said it was because the local municipality had told them they didn't need one.

Once they clarified the rules, they obtained a license, but it was too late.  Each of them was fined more than $3,000.

"The problem is that Airbnb faces no consequences," the woman told CBC.

"Revenu Quebec's idea is to hit people who are vulnerable. They know that we don't have the power to fight them in court," she said.

"I think that Airbnb should be responsible for applying the law," she said.

Cox said most cities in the world are now moving in that direction, including New York, Paris, Barcelona and Amsterdam.

"Platform accountability is almost essential these days," he said.

"That would be the most easy step to kind of dramatically change the situation," David Wachsmuth said.

But it appears Quebec isn't interested.

'No plans to adopt such provisions'

The provincial tourism minister, Caroline Proulx, was unavailable for an interview, but a spokesperson for the ministry, Jean-Manuel Téotonio, responded to CBC's questions in an email.

"The ministry is unaware of the methodology used by Inside Airbnb and it is therefore difficult to assess the accuracy of the data found there," Téotonio said.

He noted the number of fines assessed by Revenu Quebec had increased, and that the province would continue to focus on using inspectors to ferret out individual Airbnb hosts who don't follow the rules.

As for the idea of making Airbnb and other platforms more accountable?

"There are currently no plans to adopt such provisions,"  Téotonio said.

The city of Montreal executive committee member responsible for housing, Benoit Dorais, was also unavailable for an interview.

The city responded in a statement.

"It has been known for a long time that short-term rental platforms are damaging the rental stock, which is why our local boroughs have put in place very restrictive bylaws to regulate these activities and protect tenants and housing,"  the statement said.

Wachsmuth said that the city can't do much on its own.

"Fundamentally, the city needs the province to do its part first," Wachsmuth said.  

He said the city can't apply its bylaws unless it knows which Airbnbs are licensed and which aren't, and that's the province's responsibility.

The city said it would be asking the province to increase the number of inspectors in Montreal.  

But the city statement made no mention of the idea of going after short-term rental platforms instead of individual hosts.

Airbnb also responded to CBC in a statement.

"We continue to work closely with both the provincial and municipal governments to support local tourism and economic development, as well as hosts' capacity to earn supplemental income as costs of living continue to increase," the statement said.