McGill Study: STR Restrictions Drove Rents Down in Canadian Cities 

Meta Description: A McGill University study found cities that restricted short-term rentals saw monthly rents fall by as much as $55 in regulated neighborhoods, with benefits extending to surrounding areas.

Cities that restricted short-term rentals saw rents decline in the years that followed, according to a new study from McGill University's School of Urban Planning. The research examined Canadian cities and found a causal relationship between the growth of commercial short-term rentals and rising rents, as well as the reverse: restrictions that returned units to the long-term market helped rents fall or rise more slowly.

‍

Regulated cities saw measurable rent reductions within years of enacting rules

Lead researcher David Wachsmuth, an associate professor at McGill's School of Urban Planning, said the study compared cities with and without commercial STR restrictions over time. Cities that enacted bans on commercial short-term rentals saw rents begin declining in the year following implementation, with effects strengthening over subsequent years. In regulated neighborhoods, monthly rents were on average $24 lower in the first year after rules took effect, rising to $55 per month by the second and third years. Neighboring areas outside those restrictions also saw rents fall by $40 per month on average.

Across Canada, STR restrictions saved renters an estimated $192 million per month in 2023

The study covered 309 neighborhoods subject to STR restrictions and calculated total rent savings of approximately $192.4 million per month across Canadian renters in 2023. Wachsmuth noted that housing markets are regional, meaning restrictions in one municipality tend to reduce pressure in surrounding areas as well. Montreal, where restrictions were already in place, served as one of the study's key reference points. Wachsmuth described those rules as well-designed but flagged enforcement as an ongoing gap.

Housing advocates say enforcement gaps undercut otherwise strong policy frameworks

Catherine Lussier, spokesperson for Quebec housing advocacy group FRAPRU, said the findings confirm what advocates have long argued: proper enforcement is what determines whether regulations actually protect rental stock. She noted that units returning to the long-term market often do so at significantly higher rents given the absence of rent control in many Canadian provinces, which limits how much affordability is recovered even when supply increases. FRAPRU has called for a complete ban on the use of short-term rental platforms, going further than current municipal frameworks in most Canadian cities.

Montreal plans to ease existing restrictions despite the study's findings

The City of Montreal has signaled plans to loosen STR restrictions put in place by the previous administration. Lussier called that a mistake, particularly given the timing of the McGill findings. Wachsmuth did not directly oppose the city's direction in his comments but characterized existing Montreal rules as among the stronger frameworks in the country. The study did not specify a publication date for when the Montreal easing would take effect or what form it would take.

U.S. jurisdictions face similar debates as STR growth continues

The McGill study adds to a growing body of research examining STRs and housing affordability, a debate that is equally active in U.S. markets. Cities including New York, San Francisco, and Denver have enacted increasingly strict STR regulations in recent years, with enforcement becoming a central question in each case. The findings from the Canadian study are likely to be referenced in U.S. policy discussions, particularly in high-cost housing markets where STR density is high and long-term rental vacancy rates remain low.

Lodge Compliance tracks short-term rental regulations, licensing, permitting, zoning, and tax requirements across thousands of jurisdictions, helping hosts stay informed as local rules evolve.

Not sure what this means for your property? Get your free compliance report at lodgecompliance.com