Toronto eyes plan to crack down on Airbnb-style rentals
Proposed licensing system would restrict short-term rentals to a host’s primary residence and require them to register with the city — measures designed to lessen the impact on neighbourhoods and housing affordability.

TheStar.com
June 12, 2017
Betsy Powell

City staff will release a proposed licensing and registration system on Monday that would restrict Airbnb-style short-term rentals to a person’s primary residence, the Star has learned.

Short-term rentals not in a person’s primary home would be banned — a restriction designed to prevent long-term housing from being converted into tourist accommodations, sources say.

Residents would be allowed to rent out part or all of their home if they are registered with the city, pay a fee and provide emergency and safety information to guests, say sources familiar with the proposal.

The staff recommendations are in response to rapid growth in the number of websites, including Airbnb, that allow people to rent accommodations on a nightly basis, often at rates lower than hotels.

Budget travellers have embraced the burgeoning short-term rental market in Toronto and in cities around the world. But the phenomenon has also raised concerns about the potential impact on condominium living, neighbourhoods, housing affordability, tourism and taxation.

Various cities have adopted different regulations, some more restrictive than others.

Sources say Toronto’s proposed approach is designed to permit people to rent out their homes for short periods while minimizing nuisances and negative impacts on housing affordability and availability.

Online rental platforms including Airbnb would only be allowed to list properties that have a city-issued registration number, which must appear in any online listing.

The short-term rental companies would also be required to remove problem listings and pay a licensing fee.

The proposals were based on months of research and consultations with the public and stakeholders. City staff would continue to consult with the public on the recommendations.

Airbnb calls itself a home-sharing service and has maintained that the majority of its Toronto hosts — more than 80 per cent — only share their primary residences a few nights a month to earn a modest, supplemental income.

But Fairbnb — a coalition formed by the hotel workers union — says Airbnb is dominated by absentee landlords renting out multiple accommodations and putting the squeeze on the city’s short supply of rental housing.

The company, and others offering similar rental services, has effectively created “ghost” hotels by filling condos with short-term tenants who have no stake in the building, says a Fairbnb report called “Squeezed out: Airbnb’s Commercialization of Home-Sharing in Toronto.”

The city’s proposed regulations would permit approximately 7,600 properties rented on Airbnb in 2016 to continue to operate, as they appear to be in principal residences, sources said, citing company data.

Approximately 3,200 properties rented on Airbnb last year would not be allowed if the proposal is adopted.

Under the proposed regulations, people could rent up to three rooms within a unit or the entire dwelling as long as it is their principal residence. Short-term rentals would also be permitted in legal secondary suites.

The proposed rules would not prevent condo boards from banning short-term rentals altogether.

In its spring budget, the province gave the city the authority to begin collecting a hotel and short-term rental tax. Recommendations on the rate will come forward later this year, sources say.

Staff have been asked to look at the impact of taxing short-term rentals at up to 10 per cent, compared to a suggested 4 per cent for hotels. Airbnb argues it should pay the same tax as hotels.

The proposed regulations will be released Monday on Mayor John Tory’s executive committee agenda in advance of next week’s monthly meeting.

Staff are expected to report back to council with final recommendations later this year.