New Brampton bylaw prohibits using investment properties as short-term rentals

Thestar.com
Nov. 17, 2021

The City of Brampton has updated its short-term rental bylaw in hopes of addressing ongoing housing shortages in Canada’s ninth-largest city.

City council voted to update the bylaw in the summer with the changes coming into effect on Sept. 30.

According to the city’s website, those looking to rent out spaces in their homes on a short-term basis now require a special licence issued by the city do so and investment properties for short-term rentals are no longer permitted.

The city defines short-term rentals (STRs) as: “When all or part of a dwelling unit is used to provide sleeping accommodations for any rental period that is less than 30 consecutive days in exchange for payment.”

The bylaw applies to those renting out rooms, condos or homes through online sharing platforms like Airbnb, VRB and FlipKey.

The city has also restricted the length of rentals in primary residences to a maximum of 180 days, and no more than three rooms can be rented individually. Property owners must also have proof of commercial general liability insurance which must be renewed annually along with their city issued licence.

Council said it undertook a review of its bylaw in hopes of mitigating that problem and identified several issues stemming from STRs, including investors purchasing multiple properties as short-term rental spaces. As a result, investment properties being rented as STRs are now prohibited.

“Many rental units are being advertised for short-term rentals as there is greater potential for the investor/operator to profit from higher monetary gains than long-term rentals,” said the city on its website.

“You are no longer permitted to operate an investment property for the purpose of a short-term rental accommodation as it will be in violation of the business licensing by-law,” it adds.

A lack of rental housing has been a problem in Brampton for several years, with the Canada Mortgage and Housing Corporation (CMHC) showing a rental vacancy rate of just 1.2 per cent in 2019.

“STR's present challenges to existing regulations like local municipal by-laws (i.e. property taxes, zoning and licensing by-laws) and homeowners may not be aware they are violating provincial legislation in addition to municipal rules and/or condominium corporate rules,” reads the city’s website.

“Similar to other GTA municipalities, the city identified the need to develop provisions to regulate short-term rentals and prohibit investment properties being scooped up in the city for STR and driving the cost of housing up for both rental and home ownership,” it adds.

The average price for a home or condo has skyrocketed in Brampton recently, more than doubling over the past five years.

According to stats from the Toronto Regional Real Estate Board (TRREB), the average price for a detached home has increased by 115 per cent from $606,364 in January of 2016 to $1,302,553 in October 2021.

Likewise, the average price for a condo apartment has increased 118 per cent over that time from $242,806 to $529,862.