Toronto should require Airbnb permits, says report

A report Friday by Fairbnb also proposes Toronto follow Chicago’s lead by keeping a registry of condo buildings where Airbnbs are not allowed.

Thestar.com
March 3, 2017
By Tess Kalinowski

Airbnb landlords should have to register for a renewable city permit, be subject to inspections and be restricted to a single rental unit that can be let for a maximum of 30 days per year, says a group pushing for limits on Toronto’s short-term rental industry.

A report Friday by Fairbnb also proposes Toronto follow Chicago’s lead by keeping a registry of condo buildings where Airbnbs are not allowed and that the city develop a zoning bylaw specific to short-term rentals.

Although it doesn’t suggest a specific licensing fee, the report recommends that Airbnb landlords be required to provide proof of sufficient insurance coverage and that the space they are renting is a habitable room in their principle residence. They would also need to prove they aren’t violating any condominium rules.

Fairbnb - a coalition formed by the hotel workers union - says it isn’t against home sharing. But Airbnb is increasingly dominated by businesses renting out multiple accommodations and putting the squeeze on the city’s short supply of rental housing.

Airbnb said the report’s data is unreliable and funded by the hotel industry that wants to undermine its competition.

“The report falls short of recognizing our position that we believe in regulation,” said a company statement. “We have always advocated for fair, sensible regulations that balance the concerns of housing affordability with the right of everyday people to share their homes.

“The majority of Toronto hosts, more than 80 per cent, only share their primary residences and do so a few nights each month to earn modest, supplemental income.”

But Fairbnb, which used data from Tom Slee, a Waterloo expert and author on the sharing economy, says Airbnb isn’t about private home sharing.

The company is effectively creating “ghost” hotels by filling condos with short-term tenants, who have no stake in the building and leave units vacant in the middle of the week, says the Fairbnb report.

It goes on to say that regulation won’t work unless Airbnb, which lists 85 per cent of short-term rentals in Toronto, is also accountable. Fairbnb wants rental platforms to require their hosts to provide a permit number before the accommodation can be listed and to automatically remove rentals from their sites once they pass the 30-day limit.

Rule breakers - both the platform and the landlords - should face severe, escalating fines, says the Friday report, called “Squeezed out: Airbnb’s Commercialization of Home-Sharing in Toronto.”

It says that the proposed regulations would make Airbnb a true “home-sharing” company rather than a springboard for de facto hotels that don’t abide by the same health and safety rules as their more traditional competitors.

Fairbnb is also recommending that Airbnb be forced to share monthly data with the city, including the number of nights a listing has been rented, the amount of revenue it generates and the particulars of the property. This can be done via permit number to protect the landlord’s privacy, says the report.

In an earlier interview, not related to the Fairbnb report, an Airbnb spokesperson told the Star that the company is committed to data sharing with cities. Christopher Nulty cited arrangements with both Chicago and New Orleans, where it has banned most listings in that city’s French Quarter.

Airbnb doesn’t want to impact local housing affordability, said Nulty.

“Working with municipalities to collect taxes has been a priority,” he said.

Fairbnb’s policy proposals come as the city prepares to look at regulating the short-term rental industry, which more than doubled in Toronto last year, according to a recent Airbnb report.

On Friday, the company, estimated to be worth about $30 billion (U.S.), launched its expansion into more varied travel services with a new Trips function on its app that connects people with hosts offering a less touristy, more local travel experience.

The expansion comes as Airbnb is said to be eyeing an IPO and as it has become more co-operative on the regulatory front with cities in Europe and the U.S.

Fairbnb is critical of Airbnb’s tax contributions, citing reports that short-term rental companies and other “sharing economy” upstarts aren’t paying their fair share of corporate, income and property taxes.

Fairbnb says 38 per cent of Airbnb’s 12,000 Toronto listings and 52 per cent of its revenue are controlled by only 16 per cent of hosts.

Those landlords “have removed housing - planned, zoned and approved for residential use - from Toronto’s housing market, and have offered it to tourists, visitors and guests on a short-term basis.”

A disproportionate number of Airbnb rentals are in the downtown and waterfront areas, essentially on the doorstep of the traditional hotel industry, says Fairbnb.

“Airbnb’s success is predicated on what some call ‘regulatory entrepreneurship,’ that is, a strategy to enter a market aggressively in order to grow quickly until too big to be banned when regulators are finally in a position to respond,” says the report.