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Could new Airbnb rules discourage legal secondary suites?
August 29, 2019
Tess Kalinowski

Desiree Narciso bought her late-1800s house in 1992. She and her family live on the second and third storeys. The first floor is rented to a long-term tenant for $2,700 a month and the basement operates as an Airbnb that can be used as one apartment or separated into two units that rent for between $90 and $160 a night each.

The rental income has helped Narciso recover from devastating flooding and structural problems that have forced her to practically rebuild the place in recent years, she told a provincial tribunal that is hearing an appeal of the city’s approved short-term rental accommodations.

Narcisco said she planned to also use the main floor of her house as an Airbnb-style rental when the long-term tenant decides to move. She has obtained all the variances and building permits required by the city to build her rentals.

“I am a poster child for building compliance,” the Little Portugal resident told the Local Planning Appeal Tribunal (LPAT) on Wednesday.

Short-term rentals are something Narciso said she has long understood to be legal and none of the designers and architects who have helped her repair and renovate her house have suggested otherwise, although she told the tribunal she has never explicitly asked if short-term rentals are legal.

But if Toronto’s new short-term accommodation rules go ahead, Narciso would no longer be able to rent the basement and main floor of her house on a short-term basis. The regulations would permit her to rent up to three separate rooms in her house. But legal secondary suites would have to be rented on a long-term basis only and it would be up to the tenant, the principal resident of that unit, to decide if they want to let out their home.

The city’s regulations about short-term rentals -- considered a term of less than 28 days -- were supposed to take effect in June. But they haven’t been enforced because of the appeal from landlords like Narciso who say the new rules would restrict how they use their property to generate income.

Earlier on Wednesday, lawyer Sarah Corman -- who is representing Alexis Leino, a landlord who uses his basement suite for short-term rentals and doesn’t want a long-term tenant -- asked senior city planner Caroline Samuel if the new rules might discourage some homeowners from installing legal secondary units or even ripping them out.

Samuel, who wrote the city’s policy that was approved in late 2017, has testified that Toronto is encouraging homeowners to install secondary suites to boost the supply of long-term rentals.

In cross-examination, Corman asked Samuel if homeowners might be more likely to build those second units if they could use them as they wish -- even if they didn’t rent them on a long-term basis, the next owner of the home might, the lawyer suggested.

“We don’t know that,” Samuel said. “I don’t know (that) more people are going to build them because they can use them however they want. We have no evidence to support that.”

Corman went on to ask, “If somebody has a basement unit that’s not a lawful secondary suite, (can that) be rented out as part of the principal residence as a short-term rental?”

Samuel replied, “If someone has rooms in their basement and it’s not a lawful secondary suite and did not obtain the appropriate approvals to create a secondary suite, did not obtain a building permit, does not meet fire code, for example, it’s not considered a secondary suite. It would be another room in the house.”

“As soon as they invest in it and bring up to fire code and building code standards, they no longer can rent out that same room as a short-term rental,” said Corman.

“That’s correct, because now it’s a separate, self-contained living accommodation,” replied Samuel.

Responding to a question about what happens if the homeowner removes the features that comprise a secondary suite such a fire door, Samuel said it “is a tricky question.

“I can’t answer what you can do to undo legal secondary suites,” she said. “That’s something for a zoning examiner, someone in the buildings department to determine. I can’t determine that.”

On Thursday, the fourth day of the seven-day LPAT hearings, city housing expert Narmadha Rajakumar and McGill University researcher David Wachsmuth are expected to testify.