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Allowing property owners to use secondary suites as short-term rentals bad for Toronto’s rental market, expert says
August 30, 2019
Tess Kalinowski

Allowing property owners to use secondary suites as short-term rentals would encourage more landlords to convert their units to Airbnb-style rentals, rather than providing homes to long-term tenants. And that would exacerbate an already tight rental market and high rents, a policy expert with the city has testified at a planning tribunal.

But lawyers for short-term landlords argued on Thursday that Toronto’s pending new short-term rental regulations would foist the city’s responsibility for the provision of rental housing onto private property owners.

The landlords are appealing regulations set by city council that would restrict Airbnb-type rentals to the landlord’s principal residence. Property owners would not be permitted to let their legal basement apartments and second suites on a short-term basis, a term the city has defined as less than 28 days. Only the long-term tenants occupying those units would be allowed to use them as short-term rentals.

Short-term rental operators -- those who rent multiple units and some single-unit landlords that rent on platforms such as Airbnb -- are asking the province’s Local Planning Appeal Tribunal (LPAT) to reject the rules that were approved in late 2017 and were supposed to take effect in June 2018.

Toronto senior planner Narmadha Rajakumar told the tribunal that, under provincial policy, the city is responsible for maintaining and improving the residential housing stock, including secondary suites.

She said the short-term rental by-laws are one way of ensuring “a range and mix of housing options, including second units and affordable housing to meet the projected needs of current and future residents.”

“The bylaws also help to achieve the city’s Official Plan objectives of ensuring the adequate provision of residential rental housing … by ensuring that potential residential rental units are not lost to commercial short-term rental accommodation,” Rajakumar testified.

Could new Airbnb rules discourage legal secondary suites?

Short-term rental rules won’t solve housing crisis but they will help, city planner tells tribunal

Here are some of the players appearing at the hearing into Toronto’s short-term rental rules

Allowing short-stay accommodation in secondary suites and outside the landlords’ principal residence would contribute to rising rents and tight vacancy rates, she said.

“Was it my client’s responsibility to build purpose-built rental housing in the City of Toronto? Was it anybody’s responsibility to actually build purpose-built rental housing,” asked lawyer Jason Cherniak, who is representing Clarence Westhaver, owner of Westhaver Boutique Residences, and a number of other multi-unit short-term rental operators.

Rajakumar told the tribunal that, “the city has policies in its Official Plan that essentially suggest that the city needs to maintain and preserve its housing stock. In terms of the production of new housing stock, there’s nothing I know of in policies that states who needs to build it, just that it has to be provided.”

“Does that mean that private property owners should be forced to use their property as rental housing essentially to make up for that inability of the city to encourage purpose-built rental housing?” asked Cherniak.

Under questioning by Sarah Corman, the lawyer representing Alexis Leino, an Airbnb host, whose legal costs are being covered by that company, Rajakumar said the city has not studied the impact that short-term rentals are having on housing availability and affordability in Toronto. Nor has the city done a study of the likely impact of the short-term rental bylaws on the housing market, she said.

“So you can’t give us an opinion on their likely impact,” said Corman.

Rajakumar’s testimony concluded the city’s case before the tribunal, which is expected to hear from McGill University professor David Wachsmuth on Friday. He has published several studies on Airbnb. The LPAT hearings are scheduled to continue through Wednesday.