Toronto vows crackdown coming on Airbnb scofflaws

Theglobeandmail.com
March 17, 2022
Shane Dingman

It’s been five years since Toronto passed a bylaw regulating the short-term rental market, now after many false starts the city says it is finally preparing to unleash an enforcement blitz.

With a budget plan that seeks to boost its enforcement team from five staff to 12, “we have transitioned from an education phase to more direct enforcement,” said Carleton Grant, executive director of Municipal Licensing and Standards, that oversees bylaw enforcement in the city. What’s clear is there’s still a lot of work to do: there are 4,541 registered short-term residences in the city, a number that’s still roughly half of the Airbnb’s Toronto listings on any given day.

“Approximately 42 per cent [of short-term listings] have transitioned back to traditional rental market. ... That demonstrates that it’s working,” said Mr. Grant, citing data from third-party researchers. However, he agrees it can be difficult to tease out the exact cause of that transition given the world has struggled through a two-year pandemic that flattened the hospitality and tourism businesses during the same period.

“That’s a significant number of homes that were built for housing, however 58 per cent have not, and that’s not cause for celebration,” said Joe Cressy, councillor for Spadina Fort York, whose downtown ward has the highest number of registered short-term accommodations, according to city data, with 1,221.

“There are still some hosts who have dozens of properties, and also some who have one in a basement. You want everyone to comply, but [Municipal Licensing and Standards] are prioritizing the response to focus on the egregious actors. The fundamental goal is to return these units to the housing market.”

Toronto was the first municipality in Ontario to create a bylaw to handle short-term residences but since then almost 30 others have followed suit, though what is allowed and prohibited varies across jurisdictions.

However, it is still easy for even an amateur sleuth to find examples that seem worthy of investigation, not just in Toronto but in cities across the province. Take Airbnb user “Ali” who also posts to Facebook forums as “Ali Cheema.” Ali has 24 listings spread across Southern Ontario, including several operating inside cities that have rules against Airbnb listings from anyone who isn’t a home’s principal resident. He boasts online of having had between 400 and 500 guests stay at his Airbnb rentals, potentially representing tens of thousands of dollars in revenue. Ali did not respond to requests for comment.

Property records show some of the homes Ali is advertising belong to other individuals, including one in North Toronto that is not currently accepting rentals but is nevertheless a registered short-term residence location with the city. When reached by e-mail, the home’s owner confirmed they have been living in Pakistan for almost two years and said they were unaware their home still appeared in Airbnb searches.

In online forums dedicated to Airbnb hosts in the Greater Toronto Area there are frequent conversations where users describe a desire to convert long-term housing units to short-term uses in markets that restrict that activity. Sometimes these hosting hopefuls use terms of art such as “co-hosting” or “rental arbitrage” or “property management” to describe activities that are plainly banned under most of the bylaws.

Some Toronto Airbnb hosts have noted an uptick in inspections on basement apartments. Those type of apartments are not allowed to appear on short-term sites unless the tenant is the one doing the renting. Mr. Grant said that the city’s third-party data collection has allowed it to zero in on such listings worthy of a second look.

Mr. Grant said he can’t quantify how well the city does at discovering bad actors flouting the rules, saying there’s still work to do on collecting that data. On complaints related to short-term rentals, his data is better: “We received 1,027 complaints, from Jan. 1 [2021] to March 1 [2022]. We investigate all of these, and in 2021 we filed 117 charges with the courts.”

The city’s bylaw allows for fines of up to $25,000 for the first offence and $50,000 for the second.

The work that was done over 2021 was also frequently interrupted by the need to retask almost all of MLS’s bylaw officers away to public-health-related enforcement. Such things as complaints about noise, dog parks and Airbnb took a back seat for much of the year. Now, Mr. Grant said things have almost returned to pre-pandemic levels of service and the hunt for short-term rental rule breakers can soon begin in earnest.

“It’s going to take us time to catch all of those who are gaming the system,” Mr. Grant said.

The city has faced criticism from some residents who say it isn’t doing enough to crack down on scofflaws. Housing activist Thorben Weiditz has warned there are too many listings on Airbnb that are not registered and are therefore only allowed to rent for a minimum of 28 days. The rules are intended to allow landlords to use Airbnb to find long-term tenants, but Mr. Weiditz believes at least some of those 28-day listings are shams that allow users to book and then cancel at an agreed time to shorten their stays below the 28 day minimum.

“We’re going to continue to see people try to skirt some of the rules,” Mr. Cressy said. “My message would be: don’t break the rules. And if you do, through enforcement we’ll come and find you. Also, give your head a shake: We need housing.”