This story was originally published on Oct. 6, 2023, by Ricochet Media.

This reporting is part of the Investigating Airbnb project, a crowdfunded, multi-outlet effort to track the impact of short-term rentals on the housing crisis in Canada. You can donate now to fund more journalism like this, read this story in French over at Pivot or watch our video report on The Real News Network in the United States.

It’s a sunny Friday afternoon on a nondescript Plateau street, and up a curving staircase an apartment door is left open to the Fall air. A half dozen blue recycling bags are piled on the porch, and the faint hum of a vacuum cleaner carries on the breeze. 

Downstairs, just a few paces down the sidewalk, Yves Essono is being fitted with a mic as he briefs the camera on what’s about to happen. With his new boss and the mayor’s press secretary looking on, he’s preparing to show the world what his job is all about.

It’s just the second week in the field for Canada’s first dedicated squad of short-term rental inspectors — also known as Montreal’s new Airbnb police. And today, they’ll be hunting down illegal rentals with our camera crew in tow.

Yves goes up the stairs alone, followed by the camera operator, who takes up a position against the wall next to the door. The rest of us look on from below.

Performing unannounced compliance inspections on gray market ghost hotels is an inherently unpredictable endeavor, and no one really knows what to expect. Some of the largest networks bring in seven figures a year. That’s the kind of money that makes people do stupid things.

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Yves knocks on the door frame and calls out into the apartment. Inside, the sound of movement stops.

‘We are coming,’ says city to illegal operators

With the support of new provincial fines that can reach $100,000 for repeat offenders, the highest yet in North America, Montreal is cracking down on illegal ghost hotels. The flurry of enforcement comes in the wake of a tragic March fire that killed seven, including six Airbnb guests in a building with inadequate windows, fire escapes and smoke alarms.

The building’s owner, Emile Benamor, is the subject of multiple lawsuits by families of victims, accusing him of negligence and involvement in the illegal ghost hotel operation. But in a different legal action launched against the city, Benamor claims city heritage rules blocked needed repairs, the city failed to respond fast enough on the night of the fire leading to needless loss of life and officials approved permits allowing him to create new, smaller rooms that weren’t up to code.

Whether these serious but unproven allegations hold up in court or not, they’ve certainly stung the city administration.

The ride-along was arranged directly by Montreal mayor Valerie Plante’s office. And although this pilot project was conceived as a collaboration between three downtown boroughs, it became a central city initiative by the time it was announced. Everyone wants to be seen to be doing something.

“Our message to everybody who is doing illegal (short-term rentals),” Plateau-Mont-Royal mayor Luc Rabouin says when we meet him in a local park, “we are coming.”

“[Our goal is] to return thousands of homes to the long-term rental market for Montrealers,” Rabouin continues in French. “We’re in the midst of a housing crisis, we’re not going to put people on the street, we’re going to return these units to the market. The vast majority of which are illegal.”

Ricochet spoke to politicians, bureaucrats, political staff and of course street-level inspectors for this story. They acknowledged the city has not been doing enough to curb illegal ghost hotels, but they want the public to know that they understand the problem — and they are working on it.

In the process, they may make the city a test case for a tough new model of enforcement targeting illegal short-term rentals that flout provincial and municipal rules with impunity. If it works, it could be a model for jurisdictions across North America.

Prior to the fire in March, there were anywhere from 15,000 to 20,000 active listings on Airbnb in Montreal, with many more apartments being hurriedly renovated to join in on the gold rush.

Those are rental units being removed from the market, and exacerbating a housing crisis that doesn’t need any help.

Now, following the passage of tough new provincial rules last month, there are less than 8,000 active listings in the city, according to public-interest tracking site InsideAirbnb, of which only 4,000 have been booked frequently and recently. Of that number, a few hundred may be legal.

What we’re launching is a pilot project,” says city planning official Jean-François Morin, sitting across from us in a windowless and slightly claustrophobic conference room at borough hall.

“This hasn’t been done elsewhere in Quebec nor, to our knowledge, in Canada,” he says. “The ‘end game’ here is really to return these homes to the long-term rental market for everyone. That’s our goal.”

Out on patrol

The second floor walk-up with the blue bags and the open door is registered with the province as a short-term rental. City bylaws prohibit such rentals in many residential areas, but a prior revision to provincial rules by Premier François Legault gives anyone the right to rent out all or part of their ‘principal residence.’ Even if local rules say otherwise.

This well-maintained vacation rental doesn’t look like anyone’s home, and the cleaning woman who answers the door tells Yves she thinks the owners, who she has never met, live in Toronto.

“But how many days do they live in Toronto?” asks Yves. “How many days do they live in Montreal? These are technicalities, but they are still quite difficult to demonstrate and prove.”

Today, Yves is gathering evidence. But he’s also doing something even more important: a fire safety check.

The apartment passes, but Yves has questions about the legality of the operation. He doesn’t want to get specific about next steps, noting with a sly smile that the operators he’s investigating will read this article, but it’s enough to open an investigation.

None of this happens as fast as anyone would like. But for the first time, a city official is collecting evidence and preparing to take Airbnb operators to court.

That may be enough to drive casual operators out of the game. The big operators, the ones running dozens of buildings through vast networks of owners and real estate agents, won’t scare so easy.

But Yves and his team say they’ll make them a priority, tracking networks and levying fines per unit. They also say they’ll work with provincial inspectors to make sure the new mega-fines are considered for the worst offenders.

The limits of state power

It’s an unseasonably hot day, and in true Plateau fashion, this ride-along is happening on foot.

Yves is walking ahead, flanked by journalists from Ricochet and Pivot, when he arrives at an important question.

Why does he want to do this job?

He sees how people are hurting from the housing crisis, he says, people who have no place to go on moving day, and he thinks illegal short-term rentals play a part in that. He says he’s proud to enforce rules that put units back on the long-term market, for people who live here, and so he jumped at the chance to join this team.

We arrive at the second building we’ll visit, and Yves explains he’s there “because of a number of complaints from neighbours.” They claim this is a ghost hotel, with all six units being rented out on Airbnb.

One month ago, the city would have refused to take that complaint, directing residents to file complaints with provincial tax authorities instead. Follow up was, to put it generously, spotty.

Now complaints go directly to this squad, triggering unannounced inspections and further investigation. At least, in the three boroughs where this pilot project will operate and within the capacity of only four inspectors.

Baby steps.

It isn’t hard to find the door we’re looking for, it’s decorated with a sticker advertising a vacation rentals website. Yves hits different buzzers until he connects with a woman who says she’s a cleaning lady, and is here to do all the apartments. She comes when the owners call, to do the cleaning and the laundry.

Yves asks her to let him in to perform a safety inspection. She refuses, and Yves asks her to call the owner. He says he can explain it directly to them if they’d like.

She promises to do so, but then goes silent.

About 10 minutes later a scared-looking young woman exits the building, and rushes away into the crowd on a nearby major street.

If the first unit we visited raised Yves’ suspicions, this one has him locked on. He’s going to pull the property records and call the owner, and keep coming back for unannounced visits until someone lets him into the building to perform a safety inspection.

He has the legal right to enter, but he can’t break down a locked door to do so. So he’ll often have to play the long game.

We reached out to Airbnb for comment on this story, and requested an on-camera interview with regional policy director Nathan Rotman. They declined the interview but sent a statement attributed to Rotman that reads, in part, as follows.

“We continue to express concerns over critical issues with the system. The new rules are a complicated and ineffective framework that will make it harder for hosts to welcome guests, and nearly impossible for platforms to properly meet new requirements.

With communities recovering from the pandemic, and limited hotel accommodations outside traditional tourism hubs, the new rules will also make it harder for visitors to find places to stay, particularly in communities where Airbnb hosts are often the primary — if not the only — providers of local accommodation and drivers of local tourism.”

Welcome to Montreal Labs

What’s happening in Montreal is a bit of an experiment. It’s also a preview of what’s coming to other cities in North America. We’re ahead of the curve, because the fire motivated the city’s politicians to move faster than their counterparts in other jurisdictions.

It elevated Airbnb’s place in the public imagination from a nuisance, to a threat.

There’s still much to criticize. There is currently a rent strike underway in Montreal, with tenants withholding rent until the provincial government reverses course on plans to gut a major component of rent control in the province. The minister in charge is a former real estate agent who has had inappropriate and undisclosed lobbying contacts with former colleagues, and has had to apologize for public comments denigrating renters.

That a supposedly populist provincial government would so transparently take the side of landlords over tenants in the midst of a housing crisis is worth highlighting.

As for the Plante administration, it is certainly true that they should have acted much sooner. Sadly, that is true of most municipalities. A Ricochet and Pivot investigation this summer found that 75 per cent of Montreal elected officials are property owners, and many of those on the housing committee have also been landlords. 

We’ve also reported on multiple large networks of property owners and entrepreneurs getting rich at the expense of long-term tenants under the noses of municipal authorities. 

A ship this big takes time to turn, the city wants us to know, but they are committed to closing the loopholes and gaps in enforcement that have allowed an entire industry of unregulated hotels to thrive.

We asked for and received commitments from Plateau borough mayor Luc Rabouin and other city officials to share all data on this pilot project not protected by privacy rules with the public, and we’ll follow-up to see just how effective this squad has been.

For now, we know that a handful of inspectors isn’t a solution. But we also know the combination of bad press, new inspectors, and bigger fines are having a real impact on the short-term rental market.

How big that impact turns out to be, remains to be seen. 

Investigating Airbnb is a bilingual, multi-outlet investigative journalism project focused on short-term rentals and their impact on the housing market. Make a donation right now, to fund more journalism like this.