Last week, Toronto City Council's Executive Committee voted to advance new measures aimed at regulating Toronto's rising short term rental market—impacting services like Airbnb. The meeting included speakers with various perspectives, including Terry Mundell of the Greater Toronto Hotel Association, Chris Lehane—Global Head of Public Policy at Airbnb, Steven Tufts of the Fairbnb Coalition (a coalition of city wide groups advocating for the regulation and control of short term rental companies), and local hosts who depend on the service as their primary source of income.
While all agreed that regulation was necessary in one form or another, the extent and conditions of regulation were up for debate—with voices of concern coming from all sides. Hosts were concerned over losing the reliability of their primary source of income, hotels wanted to keep short term operators at just that—short term accommodations with a cap on listing periods, while community groups insisted the regulations did not go far enough to help protect housing supply.
For City Planning, the last point is of particular concern. Chief Planner Jennifer Keesmaat has previously described Airbnb as "an unregulated commercial enterprise that takes much-needed rental housing off the market," arguing that many of the units rented via the site are effectively removed from the city's long-term housing stock. Acknowledging some of these issues, Airbnb representatives were—perhaps surprisingly—supportive of introducing some form of taxation and regulation.
The result of the consultation and meeting are four proposed regulations:
- The introduction of a new land use called "short-term rental," permitted to primary residences only. This would allow for short-term rental units across the city to be created in the primary residences of the landlords. The new land use designation would only occur within existing or future mixed-use and residential areas (in all residential housing types). In the primary residence themselves, up to three rooms, the entire dwelling, or a 'lawful' secondary suite can be rented in the short-term.
- The restriction of short term rental units to primary residences only. By restricting short term rentals to primary residences, potential long-term housing is kept on the market and the acquisition of a unit solely for investment is prevented. This prevents the conversion of housing units into short-term rental suites.
- Require the licensing of companies that facilitate short term rentals, most notably Airbnb. The licensing and and registration system would require operators to register with the City and consistently display registration numbers on advertisements to ensure legitimacy. Licensing and registration would also require companies to only list registered short term rental units within set limitations (including listing lengths and taxes, to be determined later). As part of this process, companies would be required to comply with City requests such as providing details on certain listings (if problems arise), removing problem listings, and paying licensing fees.
- The creation of registry for those who operate a short term rental in their home. Operators (more commonly known as hosts) would also be required to acquire a license and register with the City, pay a licensing fee, and receive a registry that applies to their entire primary residence only. This ensures that multiple rooms can still be rented out, but within only the single primary residence. Operators would also be required to comply with safety regulations, such as providing appropriate emergency and safety information to guests.
According to Airbnb as many as 3,200 units—which were not the primary residence of the owners—in Toronto were rented with the sole purpose of investment, meaning they were essentially homes converted into hotels. While the majority of the city's Airbnb stock, numbering some 7,600 properties which are occupied by their owners, could continue to operate, the 3,200 units would have to be re-introduced as long term housing stock.
As the Provincial government recently implemented the Fair Housing Plan in an effort to regulate the GTHA's housing market, the City of Toronto has begun to use its own powers to do so as well. These short term rental regulations are an effort to ensure that housing in Toronto supply meets the ever increasing demand.
Adopted by the Executive Committee, the proposed regulations still require public consultation and final City Council approval. By-law amendments and the new licensing and registration systems will require public consultation, and City staff hope to get that and final recommendations to Council in the fourth quarter of 2017. Along with these recommendations, the city is also considering implementing a hotel and short-term rental tax for guests/tenants, with more details coming later in the year.
There are sure to be more developments in the coming months surrounding this hotly contested topic, and we will be sure to keep you updated on any details that emerge. Want to share your thoughts? Leave a comment on this page.