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The Economics

One of the main, if not the only argument consistently put forward in defense of the existence of Short-
Term Rentals, is the economic boost they provide to local economies through increased tourism. STR operators

and groups claim that their renters spend money in local businesses and restaurants, that they create new
employment opportunities and have an overall positive effect on promoting local tourism. While on the surface
that sounds like a reasonable claim to make, we have yet to see a single study from ANY jurisdiction in North
America that actually details and supports such assertions.

The municipality has a 95% residential tax base. With a possible few very rare exceptions, shopping and eating establishments are not within easy walking distance of the majority of the Township’s dwellings.

Picking up another couple cases of beer is not supporting the local economy. Same goes for grabbing a bag of buns at Food Basics. We believe the boost to local business argument simply does not hold water.


As far as creating new employment opportunities, one can only assume that operators must be referring
property maintenance and house cleaning services are hardly large local employers.

STR’s do have a dramatic influence on local economies, just not the positive ones that STR owners – and
local politicians – like to tout. In fact, even the Ontario Municipal Board (LPAT) has spoken to the issue:

“[147] Whatever the number, one fact is indisputable: each dedicated STR unit displaces one permanent
household. That household must find another place to live. This phenomenon is occurring in increasing numbers in
Toronto’s residential areas, the very places that are planned, designed and built to provide housing for residents....

Hodgart et al v City of Toronto PL180082 (2019)

This one “indisputable” fact is the source of a much greater, far reaching economic calamity for the
Township of Tiny and the County of Simcoe.

It’s a domino effect. Each displaced permanent household will not purchase their groceries locally every
week, will not have their car serviced at the local auto shop, get their hair cut at the local hair salon, buy pet food or attend the vet, buy school supplies or clothing locally, order pizza from a favourite spot, buy furniture, visit the hardware store, etc., etc. Everyday tasks or chores conducted on a daily basis by “locals” that temporary renters rarely – if ever – do.

As the tribunal noted, that “displaced” household must also find another place to live and in this region,
that is now a tall order:

“The impacts of STR’s come at the expense of both housing availability and affordability. Conversions of
long-term housing units to STRs reduce overall housing stock available to residents. STRs can increase the overall
economic value in two ways – first, by creating scarcity-induced increases, and by creating inflated prices through
bidding wars as potential STR owners are often willing to pay more” Simcoe County AHAC (Affordable Housing Advisory Committee) report AHA-2021-148 May, 2021.

Note:  This report AHA-2021-148 was tabled on May 21,2021, was Chaired at that time by our then Deputy Mayor, Steffen Walma. This report was suppressed for 14 months and only officially received by Council on August 11th, 2022.

The latest Census data list the annual average median HOUSEHOLD income in Tiny of $69,915.00 gross.
The twelve-month average home sale price in Tiny as of February 2023 was approximately $700,000.00.

Which means that based on the County’s figures applied to the least expensive available
rental property, a household would have to dedicate more than 52% of its disposable annual income simply on
rent, before utilities. And that is if you earn $70,000.00 a year. Many in this area do not.

So, what happens to these displaced households in North Simcoe? One assumes that they leave for an
area where they can afford to live. That segment of the labour pool who work in retail and hospitality, local
manufacturing, food services... people who we all rely upon everyday, many of whom cannot afford to live here
any longer. When they leave the local labour force, it perpetuates the chronic unskilled labour shortage in the
region, negatively effecting service providers whether it be long line ups at the grocery store, excessive waits at
restaurants or empty shelves at local retailers. Local manufacturers, unable to even fill existing positions do not
even entertain the thought of expansion / growth unless perhaps it involves possibly relocating to an area with a
larger labour pool. Seeing North Simcoe’s labour shortage, new industry completely bypasses the area, denying the
community of new employment and development opportunities, wage growth as well as improving the tax base
which enhances economic stability and improved services for all.... It’s a vicious cycle.

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