Toronto city council takes first step towards regulating Airbnb-style rentals
Accountability for short-rental platforms is key to developing regulations, says union-led group Fairbnb.

TheStar.com
Oct. 19, 2016
Tess Kalinowski

A Toronto group pushing for the regulation of short-term, Airbnb-style rentals is welcoming a city staff proposal to evaluate the impacts of the rentals and consider what kind of restrictions should be imposed on the booming business.

Fairbnb, which is led by the hotel workers union, says the report is an important step in ensuring there are rules governing short-term rentals. But it doesn’t go far enough in looking at how online rental platforms such as Airbnb can be held to account when that doesn’t happen.

“Platform accountability is really where it’s at if we want to develop regulations that work,” said Fairbnb spokesman Thorben Wieditz.

The city report, before executive committee Wednesday, recommends public and stakeholder consultations be held early next year to look at how to protect the interests of neighbourhoods and property owners and the city’s stock of housing.

It’s a good first step according to Ward 27 Councillor Kristyn Wong-Tam, who wishes it had come sooner as it will be at least another year before staff put specific regulation proposals before council.

Toronto has received more than 45 complaints to Municipal Licensing and Standards since 2014 related to short-term rentals, and there are 25 active investigations, says the city report. Two operators have been charged with zoning bylaw violations.

As well as the property damage, neighbourhood disruptions and criminal activity that some short-term rentals attract, the business is undercutting Toronto’s stock of licensed hotels by putting 10,000 additional accommodations into the city, said Wong-Tam.

The city is losing 2,000 hotel rooms. Some are being converted to condos. But Wong-Tam said, “We would be dishonest if we did not say that short-term accommodation is not having an impact on our hotel services and the business operations side of hotels.”

While it needs to mitigate the negative effects of short-term rentals, the staff report says it must also ensure residents can be allowed to occasionally rent their homes and that Toronto can promote tourism.

Although Toronto is behind some cities in considering licensing and restrictions for Airbnb-style rentals, it gives the city an opportunity to learn from other jurisdictions, said Fairbnb’s Wieditz.

“We can already assess what has been done elsewhere, what has worked and what has not worked,” he said.

The city report looks at six North American centres that have regulated short-term rentals, including Vancouver, Seattle, Philadelphia, New York City, San Francisco and Portland. All of them restrict the number of days a property can rent and four require licenses or permits.

Fairbnb plans to fly in the mayor of Santa Monica and one of their councillors, plus a New York assemblywoman, to speak directly to the executive committee chaired by Mayor John Tory.

The mayor, who was out of town Wednesday, has not said what kind of regulation, if any, he supports. But a spokeswoman said Tory understands the importance of the issue.

"The sharing economy and companies like Airbnb have great economic potential for our city, and great benefits for its residents. But the potential impacts of these new technologies, particularly on neighbourhoods, must be carefully considered," said an email from Keerthana Kamalavasan.

Fairbnb's Wieditz says, “We can learn a lot from Santa Monica."

Since June, the Pacific coast town of 90,000 residents (it grows to 500,000 visitors on weekends and holidays) has banned the rental of an entire home for less than 30 days. Hosts that share their homes with renters for short periods are required to apply for a city license. They must also pay a 14-per-cent “transient occupancy tax,” to be collected by the online rental platform, to help Santa Monica enforce the rules.

But Airbnb is suing the city, saying its ordinance places an undue burden on property owners wishing to rent their places, according to a Los Angeles Times report.

In New York City, short-term rentals must pay an occupancy tax of 5.9 per cent, plus a room fee of 50 cents to $2 (U.S.)

In Toronto, hotels and motels pay commercial property taxes, but that doesn't apply to bed-and-breakfasts or short-term rentals.

Airbnb had 12,260 Toronto listings on Sept. 1, says the city report. Another 2,000 were listed on Flipkey, VRBO, HomeAway and Roomorama.

Airbnb officials have repeatedly stated that it welcomes regulation.

“Airbnb is pleased to see the city of Toronto is moving toward an inclusive consultation process on home sharing. We are reviewing the city’s report in detail. We look forward to participating in the process and to continuing to share data and information about our community with city staff, Mayor John Tory and all of Toronto city council,” said an emailed statement from Airbnb’s Alex Dagg on Wednesday.

At a Toronto Star editorial board meeting last week, another Airbnb spokesperson noted that different cities have different rules and regulations, including some that are very restrictive or require homeowners to register in person at city hall. Some cities have permitted rentals for a primary home, but created more scrutiny when it comes to multiple rentals.