Study: Short-Term Rental Rules Kept Canadian Rents About $55 Lower a Month

By Tahani Elghazaly
Published September 7, 2026

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Restrictions on short-term rentals helped keep residential rents in regulated Canadian communities below the levels they would otherwise have reached, with the difference averaging about $55 a month by 2023, according to research from McGill University and the University of Waterloo.

The study focused on principal-residence rules, which generally prevent property owners from operating additional homes as full-time tourist rentals on platforms such as Airbnb. Under these rules, the property offered as a short-term rental must be the host’s primary residence, with affected municipalities using permits or licensing systems to help enforce the restrictions. The aim is to limit the removal of housing from the long-term rental market.

Researchers David Wachsmuth of McGill and Cloé St-Hilaire of Waterloo examined rental and short-term rental data across Canadian urban regions. Their analysis included 309 neighbourhoods in 38 cities that had adopted principal-residence restrictions by the beginning of 2023. Rents in those neighbourhoods were estimated to be about $24 a month lower one year after the rules took effect, with the gap widening to $55, or 3.3%, by 2023.

The researchers linked much of the effect to a reduction in commercial short-term rentals that would otherwise compete with the long-term housing supply. The impact also spread beyond regulated communities: neighbouring areas were estimated to have rents about $40 a month lower by 2023 than they would have been without the restrictions.

Overall, the study estimated that principal-residence restrictions saved Canadian renters about $192.4 million in rent payments per month in 2023. The figure does not mean rents actually fell by that amount from the previous year; it represents the estimated difference between actual rents and what rents would likely have been without the regulations.

The study was published in Regional Studies in June 2026 and highlighted by McGill University in August. The researchers noted that housing costs are shaped by many factors, but their analysis found an independent effect from short-term rental regulation on rents.