City mulls restrictions on Airbnb-style rentals
Proposed regulations include limiting short-term rentals to principal residence.

TheStar.com
Nov. 10, 2017
Betsy Powell

Su Alexanian is Airbnb’s prototypical home-sharing host who knows the good and bad side of the booming short-term rental market.

She rents a couple of bedrooms in her Kensington Market home on the Airbnb site, using the extra income to help cover the cost of her son and daughter’s university tuition.

“I didn’t want a long-term renter because I wanted my kids to be able to come home for summer, for holidays,” the artist and educator said this week.

But Alexanian has also watched Airbnb and other short-term rental websites contribute to the city’s affordable housing crisis, particularly in her eclectic downtown neighbourhood where investors have turned homes and apartments into ghost hotels, displacing the long-term tenants who used to live there.

It’s the reason she strongly supports the city’s proposed regulations limiting short-term rentals to a person’s principal residence, and wants city hall to require mandatory proof at the registration stage — a position that’s at odds with Airbnb.

“We have to prove our residence just to get a parking permit for the street, so shouldn’t we have to do that to get a permit to use Airbnb?” asks Alexanian, chair of the Kensington Market Action Committee, a residents and business association.

Next week, two city hall committees will discuss and likely tweak city staff proposals to create a registration and licensing program for short-term rental activity in Toronto, one of many cities throughout the world trying to enact restrictions. They were developed after public consultations and research.

City council will settle on the final regulatory package at its Dec. 6 meeting after the executive committee reviews a staff-proposed taxation scheme.

The proposals would require an owner or tenant to rent up to three rooms in their home, or in a secondary suite, such as a basement flat, or the entire home, the latter for no more than 180 nights a calendar year — which is different from what was originally proposed in June.

There is no limit on the number of days a home can be shared with visitors. Investment properties cannot be used as a short-term rental.

People who want to advertise short-term rentals in their home — which means any rental less than 28 days — must be registered with the city and pay a $50 fee and comply with building and fire codes.

The recommended regulations would require short-term rental companies be licensed and pay a $5,000 annual feel, plus remit $1 per night booked to the city. A violation in the proposed short-term rental bylaw, which would come into effect June 1, could result in a fine of up to $100,000.

City staff attempted to strike a balance of permitting short-term rentals “but at the same time maintain integrity of our residential neighbourhoods and the availability of housing,” municipal licensing executive director Tracey Cook explained this week.

Added Gregg Lintern, acting chief planner and executive director of city planning: “Setting up a zoning and licensing system creates a baseline so people understand what the rules of engagement are. To date we have not had that.”

Airbnb welcomes the proposed new regime with some caution.

There are concerns that the definition of principal residence may be too restrictive and the proposed 180 cap on nights was “a surprising and unnecessary restriction,” said Alex Dagg, Airbnb’s Canadian policy lead.

The San Francisco-based company is pleased, however, that staff are proposing a registration system that requires someone only to “make a declaration” that the address is their principal residence.

“If you keep a registration system simple and easy to follow it means generally getting better compliance,” Dagg said. “Our host community are not professionals, these are people sharing their homes on a casual basis, (and) probably don’t have accountants or lawyers.”

Fairbnb, a hotel workers’ union-formed coalition pushing regulation, counters that commercial operators are the dominant players on the Airbnb site, generating about half the revenue.

For that reason, if council wants to protect scarce long-term rental stock, it should require proof of principal residency to weed out multi-listing hosts, investors and ghost-hotel operators at the beginning of the regulatory process, Fairbnb says.

The coalition also hopes council will reconsider allowing Airbnb access to secondary suites, which it says could potentially impact tens of thousands of low- and moderate-income earners.