FRANÇAIS

How Airbnb's biggest players invaded Montreal's hottest neighbourhoods

By Naël Shiab
April 30, 2019
Despite a provincial law intended to limit and control online short-term housing rentals, Airbnb is thriving in Quebec. Of the 10 neighbourhoods with the highest concentration of Airbnb listings in Canada, five are in Montreal. And although the online accommodations platform fashions itself as a model of the sharing economy, in reality, big-time commercial operators are responsible for hundreds of listings, often passing themselves off as ordinary citizens.
The biggest Airbnb players respect the law, according to CBC/Radio-Canada’s findings. Our investigation shows, however, that hundreds of Airbnb’s most active listings are in zones prohibited to short-term rentals. According to the City of Montreal, the listings illegally on offer to tourists through the Airbnb platform could count in the thousands.
Revenu Québec has been responsible for monitoring Airbnb listings since June 2018. So far, the Revenue Ministry has not issued a single fine — only warnings. And there is no central registry for complaints about Airbnb rentals.
Tourism Minister Caroline Proulx acknowledges that the law lacks clarity. Anyone who leases a property on a regular basis for fewer than 31 days must obtain a permit from the Corporation de l’industrie touristique du Québec. However, Proulx’s own ministry was unable to explain what is meant, concretely, by “a regular basis.”
After every stay at an Airbnb listing, travellers are asked to post a review of their experience. For the purposes of CBC/Radio-Canada’s analysis, we’ve categorized listings for entire homes that have 50 or more reviews as “regular” short-term rental properties. That means a lodging with 50 reviews that’s been listed online for four years would have been rented out once a month, on average.
In June 2018, Montreal’s Ville-Marie borough ruled that regular listings on Airbnb would only be permitted along a three-kilometre stretch of Sainte-Catherine Street, bounded by Amherst Street to the east and Saint-Mathieu Street to the west.
The geographic co-ordinates on Airbnb are accurate to within 200 metres, to respect hosts’ privacy. We enlarged that zone by an additional 200 metres on all sides.
CBC/Radio-Canada was able to track down 26 permits for short-term rentals in the Ville-Marie borough. Those outside the permitted zone which had already been listed before the municipal rules changed have an acquired right to continue to be listed. One permit may also cover several lodgings in the same building.
We found 787 listings for entire homes, all with at least 50 reviews, in the Ville-Marie borough. Two-thirds were outside the permitted zone. Note that it is possible some are being rented for 31 days or longer, which would exclude them from the municipal regulation.
In January 2018, the Plateau-Mont-Royal borough also delineated the zones in which regular Airbnb listings are permitted — the length of St-Laurent and St-Denis streets.
We enlarged that zone by 200 metres on all sides, to take into account the approximate position of the Airbnb listings.
We found 108 permits for short-term rentals in the borough. That represents 44 per cent of all short-term rental permits granted on the Island of Montreal.
We found 511 listings for entire homes, with 50 reviews or more, in the Plateau-Mont-Royal borough. Of those, 57 per cent were outside the permitted zones.
CBC/Radio-Canada’s analysis is based on all listings for entire homes in 16 Canadian cities, taken from the Airbnb site one day in early April. Our investigation shows that in Montreal, a minority of users have a stranglehold on the online platform, thanks to a provincial law that’s too vague and municipal regulations that are hard to apply.
We found more than 9,700 listings for entire homes in Montreal on the platform. That works out to one Airbnb listing for every 100 residences on the island. In some neighbourhoods, the ratio of Airbnb listings to dwellings is as high as one in 15. Some of those lodgings are only available a few nights a year, but others are rented out repeatedly through Airbnb. It’s a critical issue for Montreal, given the limited supply of rental housing.
“We are not looking at more than five nights a month before you can make more money than renting to long-term tenants, particularly in hot spots,” said McGill Prof. David Wachsmuth, the Canadian Research Chair in urban planning. Wachsmuth has studied the impact of Airbnb on cities for the past three years, and his findings line up with CBC/Radio-Canada’s conclusions. Given the strict analytical criteria CBC/Radio-Canada used, we are likely underestimating the Airbnb phenomenon, he said.
In Montreal,10 per cent of Airbnb hosts received 63 per cent of the reviews on the listings we found. In other words, this group of 568 host most of the travellers to Montreal who use Airbnb and earn most of the revenue generated through the online platform. Of all the cities CBC/Radio-Canada looked at, including Toronto, Vancouver and Ottawa, Montreal has the highest concentration of Airbnb hosts who are such dominant players. There is a reason that the city is so attractive to corporate interests, according to Wachsmuth: Montreal is a popular tourist attraction where accommodation is relatively cheap.
CBC/Radio-Canada found three Airbnb accounts with most of the listings in Montreal for entire homes in April. They also happen to be three of the four biggest players on Airbnb in Canada.
Sonder manages nearly 180 Montreal listings in its main account — and close to 1,000, around the world. Sonder, which was founded in Montreal but is now based in San Francisco, declined an interview request. The company doesn’t hide the fact it’s running a business on Airbnb, and it has government permits for its short-term rentals, notably in Griffintown.
“Alejandro” had 160 listings in Montreal and close to 70 in other Canadian cities. In his listings, he described himself as an ordinary Montrealer with a passion for travel. In fact, he was actually a paid employee for Corporate Stays, a company with offices in Montreal and Panama that mostly rents longer-term executive suites to businesses relocating staff. The company, which has been reprimanded by Quebec’s Tourism Ministry in the past for its business practices, mostly rents for stays of 31 days or more — stays which don’t require a permit.
“AJ” is a self-described former software engineer-turned-event planner who was managing 90 Montreal listings in early April. He uses a stock photo — a male model whose face can be found on dozens of other websites. In real life, he’s Alexander J. Zakowski, who rents furnished suites to university students and puts them on Airbnb as nightly rentals during the summer. He doesn’t have short-term rental permits for his lodgings, but he told CBC/Radio-Canada that the law is open to interpretation.
Three out of four of their listings are in Montreal’s Ville-Marie borough and a quarter are on the Plateau-Mont-Royal. A small fraction are also in Montreal’s Sud-Ouest borough.
Airbnb doesn’t limit the number of a host’s listings. And when the government grants a permit for a short-term rental, it is valid for an unlimited number of lodgings, as long as they are in “contiguous buildings” or grouped together. And for lodgings normally rented out for 31 days or longer, no permit is required.
To find out the true identity of “Alejandro,” we searched the internet to find similar profile images and tracked him to the Corporate Stays website. A few days before the publication of CBC/Radio-Canada’s findings, Alejandro’s face disappeared from all his listings, replaced by a Corporate Stays logo, and the number of listings on that account fell dramatically. Alejandro lost his job.
Reached by phone, the head of sales at Corporate Stays, Frédéric Aouad, explained that the company made Alejandro the face of their Airbnb account because “it’s much more personable to be talking to a human being.” But he said Alejandro would make it clear to prospective renters before they booked that he represented a corporate housing company.
Airbnb has been a double-edged sword for the company, Aouad said. He said the online booking platform has provided formidable visibility, however, his company’s image has been tarnished by the noise complaints and neighbours’ gripes that come with many Airbnb rentals. As a result, Corporate Stays was cutting back on its Airbnb offerings, which in any case only generated five to 10 per cent of its business, he said.
CBC/Radio-Canada tracked down A.J. after recognizing a church in the background of one of his listings. That enabled us to find the building and the owner listed on the municipal property assessment roll. The owner, in turn, put us in touch with A.J.
A.J., whose full name is Alexander J. Zakowski, confirmed that he was using a phony photo, found in an online stock image bank. He said some of his lodgings have been visited by inspectors. Since then, he’s focused on longer-term rentals, which don’t fall under the provincial law. As for the others that are listed on Airbnb, he responded that the law is open to interpretation.
Montreal’s housing crisis and unfair competition
The highest percentage of Montreal lodgings listed on Airbnb are in Old Montreal (7.2 per cent), downtown Montreal, along René-Lévesque Boulevard East (7.1 per cent) and in Saint-Louis (6.9 per cent) in the Plateau-Mont-Royal borough. Social housing groups want Airbnb-type short-term rentals to be banned in these neighbourhoods.
“During high points in the tourist season, such as Osheaga and the F1, prices go up,” said Gabrielle Renaud, a community organizer with the Comité logement du Plateau Mont-Royal. “But if the lodging is returned to the local rental market afterwards, how do you establish the rent? It deregulates everything.” She notes that people living in the borough are particularly vulnerable to the loss of long-term rental stock to Airbnb, because seven out of 10 borough residents are tenants.
Gaétan Roberge, a community organizer with the Comité logement Ville-Marie, points out that cities are organized into residential and commercial zones, but Airbnb listings pay no heed to the regulations, to the detriment of his borough’s residents. “If, over the course of last year, Revenu Québec had issued fines, people would realize the consequences of breaking the rules. You can have rules, but if you don’t apply them, the result is nil.”
“We can tally up thousands of lodgings being illegally rented out commercially for the tourist trade, and those are lost to the residential housing market,” underscores Montreal Coun. Richard Ryan, the head of the city’s housing committee. The councillor hopes that Revenu Québec will use its powers to impose fines which, under the law, can run as high as $50,000 a day.
Commercial enterprises listing lodgings illegally on Airbnb are evading taxes, as far as the president of the Greater Montreal Hotels Association is concerned. “They’re offering accommodation, without paying taxes, including commercial property taxes,” says Ève Paré. “Hotels pay three to four times more in property taxes than residential property owners.” She wants the rules to be made clearer, to end unfair competition.
But for McGill Prof. David Wachsmuth, laws and regulations are only part of the equation. “I've been studying short-term regulation all around the world, for a number of years now. I don't think there's a single place that really solved this problem. And there's a simple answer for that. It almost doesn't matter what kind of regulation you put in place if you can't get the data necessary to enforce to enforce it.”
Even Airbnb itself has asked the government to clarify its law. The company has paid lobbyists to line up meetings with elected officials and senior bureaucrats. “Airbnb would like a better definition of what constitutes rental on a ‘regular basis’ in order to give our hosts clear guidelines,” it says in its notice on the provincial registry of lobbyists.
Airbnb declined CBC/Radio-Canada’s request for an interview. By email, the company stated that listings on its platform represent a tiny fraction of the residential lodging available in cities. It also said it’s ready to work with governments to adapt to regulations.
The company said it has signed more than 500 agreements with municipalities and governments worldwide, including with Quebec. Since Oct. 1, 2017, Airbnb has automatically collected a 3.5 per cent accommodation tax for all stays of fewer than 31 days, on behalf of the province. Last year, that amounted to $7.4 million, about half of which was turned over to Tourism Montreal.

Methodology

CBC/Radio-Canada monitored and collected the price, number of reviews, star rating and geolocation of all listings advertising an entire home or suite that appeared on Airbnb's website on April 9 and 10, 2019, for 16 Canadian cities.
We found addresses for short-term housing permits from the website of the Corporation de l’industrie touristique du Québec.
For Airbnb listings outside permitted zones in Ville-Marie and Plateau-Mont-Royal boroughs, we asked the boroughs for the geographic co-ordinates of these zones.
For the administrative boundaries of the boroughs and various neighbourhoods, we used open data from various cities or we got the information directly from the municipalities.
Despite our best efforts, there are some gaps in our analysis:
  • We may not have had access to all of Airbnb’s data through the platform’s public web pages.
  • Geographic co-ordinates are approximate, to within 200 metres.
  • Some Airbnb users may have more than one account.
  • Some Airbnb users may list duplicates of the same property.
Naël Shiab data journalist, Philippe Tardif and Francis Lamontagne designer, Melanie Julien bureau chief, Loreen Pindera translation. With the help of Vincent Maisonneuve, Valérie Ouellet, Zach Dubinsky, William Wolfe-Wylie and Romain Schué.
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