City wrestles with Airbnb rules

Critics say there's a loophole in proposed short-term rental rules: operators don't need to prove they live there.

Thestar.com
Nov. 7, 2017
By Betsy Powell

Sometime in September, residents on leafy Spruce St. grew alarmed after noticing a parade of suitcase-toting Airbnb guests coming and going from a recently sold elegant three-storey Victorian-era home.

They're not against the home-sharing concept.

"But when you're turning a residential home into a commercial hotel, that's crossing the line," said one neighbour who asked not to be identified to avoid a "war" with owner Jie Ding.

Ding bought the Cabbagetown property in August, carved up the former single family dwelling and installed a keypad on the front door. A sign inside instructs visitors to "please keep the doors locked."

Ding doesn't live there, which means the three Airbnb listings ($117 to $138 a night) and thousands of other such properties in Toronto will soon be illegal if council adopts city staff recommendations limiting short-term rentals to a person's primary residence.

Starting next week, the regulations will be the subject of intense focus at city hall where two committees will discuss zoning and licensing proposals.

But residents on Spruce St. and Fairbnb, the hospitality workers' union-backed coalition, aren't convinced the city's proposals go far enough to do what they're designed to do: prevent Airbnb from reducing Toronto's already scarce long-term housing rental supply.

They point to a glaring loophole. Short-term rental operators must register with the city, provide basic information and "declare" the address is the principal residence — they don't have to prove it. The proposals say only that the city "can audit any registered operator and request proof of principal residence."

"This non-requirement only gestures at regulation," says Thorben Wieditz, of Fairbnb.

"To stop the spread of ghost hotels, absentee landlords and investors need to be weeded out at the very beginning. For us, actual proof of principal residence is non-negotiable."

A Canadian Centre for Policy Alternatives' report on Airbnb regulation concurred. Depending on Airbnb hosts to self-certify is too lenient, and will allow "commercial activity to slip through the cracks," reads the June 2017 report.

"Multiple hosts can simply obtain licences for several residences under different people 'self-certifying' without providing necessary proof."

The Spruce St. neighbour shares the pessimism.

"If there's no mechanism to prove it, how is this regulation going to have any effect?" he asked. "Why not falsely declare and just keep on with the business," and avoid the additional red tape and tax measures that are coming.

Fairbnb's Wieditz says Toronto should avoid the mistake of other jurisdictions of passing inadequate regulations.

Only San Francisco, Airbnb's hometown, provides a model for regulators around the world. Wieditz wrote a report calling on Canadian cities to ensure Airbnb is held accountable and liable for illegal properties advertised on its website.

In San Francisco, Airbnb hosts are required to provide proof they are the principal resident by submitting a current driver's licence or state-issued ID card and one other document, such as a voter registration card or proof of car insurance.

Also, neighbours within about 100 metres of a proposed short-term rental in San Francisco must be notified.

"This not only gives them a heads up in the spirit of community, but also provides them with a chance to approach the city to say that a person who applied for a short-term rental permit actually doesn't live in that home," Wieditz explained.

"It allows neighbours to know what is going on in their neighbourhood or condo tower and presents a mechanism to ensure that only principal residences will be used for short-term rental purposes."

Once the city's regulations are enacted, Cabbagetown residents hope Ding, or a family member move into 48 Spruce, register with the city and comply with the new rules and pay whatever taxes and fees are imposed.

Ding said he is aware a short-term rental regime is coming and plans to move in. He told the Star he bought the house for his daughter Jessica, who is attending York University and is currently pictured as the Airbnb host.

He is also a director of a numbered Ontario company that recently bought a standalone building at 600 Parliament St. that has a laundrymat storefront and an Airbnb rental upstairs.

Having the owner live on site "would make all the difference," said his Cabbagetown neighbour.

If that had been the case, there would have been someone accountable for a recent noisy weeknight party that raged until 2 a.m., although the Airbnb listings for the address state "no parties."

Ding said since then, he has put up signs in the house asking guests to keep the noise level down.

"Respect the neighbours," he told the Star.

Quick Facts:

Airbnb hosts in San Francisco have to prove they are the principal resident by submitting a current driver's licence or state-issued ID card to the city's Office of Short-term Rental.

In addition, they must provide: Proof of a homeowner's tax exemption, Original utility bill issued by a public utility, vehicle registration, proof of car insurance, voter registration card or certificate.

Neighbours within about 100 metres of a proposed short-term rental property must be notified.