Are short-term rental firms like Airbnb turning Toronto’s condos into hotels?
Rental company specializing in short-term rentals received $5,000 grant from the city and owners say there are no problems. But condo critics say otherwise and city is to begin consultations to sort out what happens next.

TheStar.com
March 17, 2017
Betsy Powell

Depending on who you ask, Lisa Marion represents either the bane of condo owners or the future of short-term rentals in Toronto.

Marion, a self-described short-term rental expert, is co-owner of a small property rental company “specializing in Airbnb-style rentals.”

“It’s been going on for so long, what the condo boards don’t realize is for the most part there are no problems,” says Marion, co-owner of a small property rental company “specializing in Airbnb-style rentals.”

“This is the way accommodations are going now, and I feel like it’s a much better idea to work together to see how this can benefit all parties involved rather than us getting into nasty fights about things.”

This spring, expect to hear a lot more about Airbnb, the biggest player in the burgeoning short-term rental market that has become particularly bedeviling to condominium boards, owners and property managers across Toronto.

After tackling Uber and renegade pot dispensaries, the city will soon begin public consultations as it studies how to regulate transient rentals, which critics say are reducing the supply of badly needed units for long-term tenants and driving up rents in Toronto.

With hundreds of thousand of Toronto residents living in a condo, there’s lot at stake and depending on your perspective it’s either a great opportunity, or a giant problem.

“There’s been a very large disruption in the world of living in condos caused by short-term rentals,” Ryerson University Hospitality and Tourism Researcher Chris Gibbs said during a recent panel discussion called “Who’s Been Sleeping in Your Neighbour’s Bed: Airbnb & Toronto Condominium Disruption.”

“I think the new normal is going to be different,” Gibbs said citing research that one in three Toronto residents is a condo dweller.

On one side are no-Airbnb-in-my-condo critics who say these rentals are nothing more than illegal hotels that compromise building safety and could drive up maintenance costs, never mind bypassing rules, bylaws and taxes.

“Why on Earth are condominiums allowed to be hotels when they’re supposed to be multi-family residential properties,” says Linda Pinizzotto, president of the Condo Owners Association.

On the other side are supporters of Airbnb, a San Francisco-based company that casts itself as a benevolent force, offering “home-sharing” to thrifty travelers while earning cash-strapped “hosts” extra money for rent or mortgage payments. Airbnb collects fees for every reservation.

Marion plans to fly the Airbnb flag during the city’s upcoming consultations. She co-founded the fledgling Canadian Host Association, representing, according to the web site, “Canadian short-term rental hosts from coast to coast.”

“Until we have a formal registration/membership process in place, we speak for all short-term rental hosts (the home sharers and the "commercial" hosts alike,)” Marion wrote in an email to the Star.

Marion and her partner received a $5,000 grant from the city to start up their “full-service” property management company, H & P Properties, which featured eight listings on Airbnb this week, some offering “spring special” rates.

As is typical on the website, the listings do not provide a specific address, only the general area in Toronto.

In January, while appearing as a panelist on TVO’s The Agenda, Marion described the company as being “on the up and up” and the owners of the condos they manage have “permission from condo boards to do this.”

“We don’t believe in circumventing the rules,” she said on the program.

This week, Marion offered a qualified answer when asked if she’s certain all the rental properties comply with building rules.

“As far as I’m aware, yes.”

Marion confirmed H&P rents out two units, on a short-term basis, in the downtown Pantages hotel and residential complex. The rentals are permitted in the condo declarations, the document explaining a building’s conditions or restrictions, she said.

Deepak Ruparell, CEO of the Silver Group, which owns the 92-room Pantages Hotel and Spa, said that may be the language but “the issue is what is short term.

“Short-term rentals are for residential purposes, not to run an active defacto hotel,” he wrote in email. “Majority of owners living there are quite upset.”

Fairbnb, a coalition of rental association and hotel industry groups pushing the city to restrict the short-term rental market, says companies such as H&P are pretending to be “home-sharing.”

At the same time they are turning “residential housing stock into ghost hotels,” skirting rules and regulations and not contributing to the city’s property tax base as other businesses do, said spokesman Thorben Wieditz.

Marion’s response? “We never pretended to home-share we have been up-front about what we do,” she wrote in email. “We’re property managers blended with hospitality.” Nor do they “‘skirt rules and regulations,’ the fact is that we don’t have any from the city yet. When we do, we will follow them.”

She added her units are used by owners from time to time so would never be in a rental pool.

Condo Association president Pinizzotto, a veteran realtor, and former government relations chair for the Toronto Real Estate Board, is familiar with Marion and her company — they appeared on The Agenda together. Pinizzotto said H&P is taking advantage of the current situation, which is confusing and “a huge mess.”

She blames the province for dropping the ball after years of industry warnings.

For instance, the government, in its review of the Condominium Act, ignored a request to introduce standard or generic declarations, for all condo boards, which has left them in a fog of ambiguity and differing interpretations of what is and what is not allowed.

“It’s insane. There are 3,500 different condo buildings and everyone has a different declaration and it’s written up in such mumbo jumble nobody understands anything,” she said this week.