Montreal’s extreme regulations risk over $400 million in economic activity

Tourism is a vital component of Montreal’s economy all year-round – generating visitor spending to every corner of the community, creating jobs, and fueling small businesses that rely on foot traffic that comes from travellers. 

That’s why the City of Montreal’s decision to limit short-term rentals to the summer months (June 10 to September 10), is extreme, unreasonable, and threatens to undermine the city’s economy. 

A new report highlights the detrimental impact of the City’s decision. According to a new economic analysis, once enacted, this restriction could put at risk over $400 million¹ in economic activity and over 4,400 jobs – affecting not only short-term rental residents that host, but also the countless small businesses that depend on tourism year-round.

“Instead of enacting extreme and shortsighted restrictions, the City of Montreal should pursue sensible regulations that balance the needs of residents, hosts, and the broader tourism economy. We strongly urge policymakers to reverse this economically damaging law and work collaboratively to support responsible short-term rentals that benefit the city, its economy, and its people.”

– Alex Howell (she/her), Policy Lead, Airbnb, Canada 

A devastating economic impact

According to an internal analysis using the IMPLAN economic model, the restriction could result in significant financial losses for Montreal:²

According to Airbnb internal data, from September 11, 2023, to June 9, 2024, Montreal Airbnb hosts welcomed over 400,000 guest arrivals including over 83,000 Quebecers, demonstrating the demand for year-round short-term rental options.

A threat to major events and tourism growth

One of the most damaging aspects of the restriction is its impact on major events that drive Montreal’s tourism economy, including the 2026 Montreal Grand Prix, taking place outside the operating period for short-term rentals. Last year, over 16,000 guests stayed in Montreal during Grand Prix weekend³, and these new restrictions could leave thousands of visitors scrambling for limited, and expensive, hotel options.⁴

Short-term rentals help disperse tourism spending across all of Montreal, allowing visitors to stay in diverse neighbourhoods and support local businesses. In fact, 40 percent of guest spending happens in the area where they book their stay, and two thirds of Airbnb guests say they feel more connected to local culture when staying in a home rather than a hotel.

Strict regulations are ineffective at solving the housing crisis

Quebec, including Montreal, has some of the strictest short-term rental regulations in the world, including a primary residence restriction in many parts of the city and a mandatory registration system in place. In fact, the Quebec Minister of Tourism has acknowledged that compliance across the province is high.

Despite strict regulations, Montreal’s rental affordability continues to erode, especially given the province’s lack of rent control. Data from Statistics Canada shows that the number of short-term rental units that could be converted into long-term housing is minimal– just 0.39 percent of the housing supply. In fact, the Conference Board of Canada found that restrictive short-term rental policies have not led to lower rent.

The minimal impact on housing in Montreal and across Canada has also been seen around the world. New York City, which reduced short-term rentals by over 90 percent in September 2023, is seeing record rental prices, without any improvement on vacancy rates, all while hotel rates are at record levels – a fate Montreal risks with its recent changes.

Airbnb hosts: Everyday residents who rely on extra income

Montreal’s new restrictions will disproportionately impact everyday Montrealers who rely on short-term rentals to make ends meet. A 2024 survey of Airbnb hosts found:

• 77% of hosts use their earnings to cover the rising cost of living.
• 51% say their Airbnb income has helped them stay in their homes.
• 11% say it has helped them avoid foreclosure or eviction.
• 61% of hosts hire professional cleaners, supporting other local businesses.

Excessive regulation has worsened housing affordability

Montreal’s excessive regulation has already contributed to declining housing affordability. A study by the Montreal Economic Institute found that the city regulates housing more heavily than 73 percent of Canadian cities and provinces, which has contributed to rising housing costs. In the Greater Montreal area, residential real estate prices have soared 30.6 percent between the fourth quarters of 2019 and 2023, despite already strict short-term rental laws.