Hearings to begin in landlords’ appeal over Toronto rules for Airbnb, other short-term rentals

Thestar.com
August 26, 2019
Tess Kalinowski

The teal front door of Serena Purdy’s white house leads the eye straight down one of Kensington Market’s quirky little laneways where pots of lavender and herbs adorn her stoop.

It’s more of a graffiti-covered alley than residential street. But PhD student Purdy, who has lived there for 16 years, remembers it was alive with neighbours only a year ago, a close community that rallied in crisis and celebration.

Last Tuesday afternoon, the only passerby is pulling a wheeled suitcase. Familiar friends and local artists who once occupied the buildings surrounding her house have been displaced by tourists and strangers occupying what are now short-term rentals. It’s the same story around the corner at Kensington Place, once the community’s artistic nerve centre.

“To imagine how much of the community is lost is staggering,” she said.

“As long as landlords can make more money off short-term rentals, we’ll keep losing artists and residents,” said Purdy, a director of Friends of Kensington Market, a group dedicated to preserving the area’s artistic, funky atmosphere that makes it such a draw for tourists.

The fear is that authenticity will fade to oblivion as long-term tenants get pushed out by landlords wanting to make more money off short-stay visitors.

Most of the changes have occurred in the last year even though the city’s regulations for short-term rentals advertised on platforms such as Airbnb, Kijiji, FlipKey, HomeAway and VRBO were supposed to take effect in June 2018.

They have been sidelined by an appeal by short-term landlords that is set to begin Monday at the Local Planning Appeal Tribunal (LPAT). It has scheduled seven days of hearings.

Toronto’s rules were meant to address concerns that short-term accommodation is replacing what would otherwise be permanent homes in the city’s tight housing market. Estimates of how many permanent homes have been absorbed by short-term rentals range from about 3,200 to 6,700.

In Kensington Market, residents have put signs in their windows to remind passersby that people live in the market.

They were also designed to reduce the nuisance complaints that often accompany absentee landlords -- the partying, parking, garbage and noise that is invading normally quiet residential streets and condos that, in some cases, operate as “ghost hotels.”

Gigi Suhanic, a west-end resident who said her neighbourhood is being hollowed out by short-term rentals, spent $250 to print 100 “Airbnb hurts neighbourhoods” lawn signs.

When Suhanic bought her semi-detached home in 2000 the other side was already split into three units, but the tenants made great neighbours. That home sold and was remodelled and used intermittently for short-term rentals. Then it sold again.

“We ended up living beside a hotel with a stream of strangers coming and going who look at us like we were local oddities,” she said, although the noise and partying haven’t been as bad as they’ve been on at least one nearby street.

The home that adjoins Suhanic’s was recently sold again and she is waiting to see what happens this time.

“It has been a few years of a lot of stress and anxiety literally in our backyard because this greed-motivated owner had no concern or consideration for his neighbours,” she said.

“We want to maintain some stability in the community, including in condos, where people who do have their primary residence in those buildings have some stability in their community,” said Brad Ross, the city’s chief communications officer.

Under the regulations, landlords would be licensed for $50 a year. The rental companies would pay a one-time $5,000 fee, plus a $1-per-night booking charge.

Short-term rentals would be restricted to the landlord’s principal residence -- up to three rooms for an unlimited number of nights or up to 180 nights a year for the entire home. Secondary suites could not be used as short-term rentals unless the long-term tenant wanted to sublet.

Councillor Josh Matlow (Toronto--St. Paul’s) doesn’t believe the regulations are anti-Airbnb. He also doesn’t think elected council decisions should be subject to appeal by an unelected, provincially appointed body like the LPAT. The short-term rental rules are based on protecting the city’s stock of long-term rental housing and protecting the quality of life of residents, he said.

“It is important to ensure that as many rental units as possible within our city are available to people who need to live in them and to be able to afford them, we need that stock and they need to go back on the rental market,” he said.

You can’t treat communities, whether they are condos or houses, as quasi-hotels, Matlow added. “That’s not what the people who live there signed up for and certainly they don’t expect that should be allowed. The city agreed.”

Alexis Leino, photographed at his home, is an Airbnb host who wants to continue renting his basement on the platform. His legal fees are being covered by the company.

Landlord Alexis Leino, whose LPAT legal costs are being paid by Airbnb, is challenging Toronto’s stance even though he supports licensing.

When he and his partner bought their East York bungalow about 10 minutes from the subway five years ago, it was a dump, Leino said.

Renting their basement has helped pay for renovations and the removal of junk and rubble in the backyard. They don’t want a permanent tenant because they want to use the basement suite for visiting friends and family.

He rents the self-contained basement for about half the year for $80 a night, income Leino says he declares.

But he’s uncomfortable with the city telling him how he can use his house.

“I use my basement apartment for our own purposes,” he said. “It’s an important source of income for us, but it’s also something I enjoy doing. It’s providing a service I think is required and therefore I don’t want to stop doing it.

“We meet wonderful people. It serves a purpose and fulfils a need in the area,” he said, adding that there are no hotels in East York.

Guests range from new Canadians who stay a month while they get their feet under them, to tourists, business travellers and people receiving treatment at Toronto hospitals.

Airbnb, which has no direct standing before the LPAT, has long supported regulation, said public policy director Alex Dagg. The company is supporting Leino because “this is about people being able to use extra space in their homes in a flexible way and a very big way to help families make ends meet in a difficult time in a very expensive city,” she said.

“It’s a housing constrained market. I understand how difficult it is for people to live here,” Dagg said.

Leino’s legal costs are the only ones being covered by Airbnb. The company is not contributing to the representation at the LPAT of seven short-term landlords who operate a combined 90 units, who have also received standing. Some of them are providing the same furnished rental service offered by companies predating Airbnb, Dagg said.

“The city of Toronto needs all kinds of housing and sometimes it’s short-term. It’s not just tourists. It’s people coming on short-term contracts, or people visiting hospitals or executives coming here,” she said.

Lawyer Jason Cherniak is representing Westhaver Boutique Residences. It advertises five properties, four near Trinity Bellwoods, another in Cabbagetown, that let for between $138 and $498 a night.

Cherniak said he can’t see how his client could continue to operate the same business if the city’s principal residence rule is applied.

He said there are two main issues before the LPAT. The first is the status of short-term rentals as “a legal, nonconforming use” of the property. That means their use is established but does not meet current zoning rules.

The legality of short-term rentals remains “a grey zone” until the appeal is decided, according to Ross at the city.

If the LPAT agrees with the landlords that the rentals are currently legal, Cherniak says his client should be allowed to continue in his current locations but wouldn’t be able to establish short-term rentals in other locations.

The other main issue is whether a short-term rental is a residential or commercial use of a property.

“We say it’s a residential use because it’s a person living in a house or condo, using the kitchen, using the laundry, using the same facilities as any other resident. The only difference is how long they’re staying there. But that doesn’t stop them from being a resident while they’re there,” he said.

In Kensington Market, Purdy says she loves to travel and when she goes away she rents out her own home. She also rents rooms in her home to several long-term tenants.

She says Kensington Market is the kind of place Toronto’s tourists should see. But that doesn’t mean her neighbours should be evicted by landlords who renovate to turn a bigger profit or that her neighbourhood should become a “hostel environment.”

“A lot of people being displaced are going to be the most marginalized,” Purdy said.