Ontario tribunal upholds Torontos new rules to limit Airbnb, other short term rentals – The Globe and Mail

Ontario tribunal upholds Torontos new rules to limit Airbnb, other short term rentals - The Globe and Mail
Toronto to enforce new Airbnb regulations after tribunal rules in favour of stricter bylaws
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An Ontario tribunal has upheld Toronto regulations on short-term rentals that will restrict the most prolific hosts on Airbnb and other home-sharing services.

It means people who have invested money in homes for the sole purpose of renting them on Airbnb or other marketing platforms, and have no intention of living in the units, will be out of luck if council approves the rules next week. The community and protective services committee heard from several opponents, including property managers and investors.

Almost two years after Toronto council voted for zoning bylaw amendments meant to crack down on what are known as “ghost hotel operators, the city can move forward with the restrictions. The new rules apply to homeowners and tenants who want to offer rooms and homes for short-term rental on such services as Airbnb or VRBO. The regulations restrict short-term rentals to a homeowners principal residence, and then only to a maximum of 180 days a year.

City of Ottawa staff weren’t sure when a decision on the LPAT matter in Toronto would be released, so they recommended that any regulations approved by council not be finalized until the appeal case was finished. There was a chance the appeal decision could have affected Ottawa’s draft regulations.

Ontario tribunal upholds Toronto rules on short-term rentals like Airbnb

Mondays ruling by the Local Planning Appeal Tribunal (LPAT) found that these restrictions represent good planning in the public interest.

“These opportunities represent a reasonable balancing of several policy objectives. They assist in ensuring that housing is provided for residents, that a full range of housing is available including (short-term rentals), and that the business and tourism economies are supported, the decision says.

Mayor John Tory said the decision is good news for Toronto residents and affirms the citys balanced approach on short-term rentals.

Toronto’s regulations for the short-term rental market include a restriction that people can only host short-term rentals in their principal homes. Landlords appealed Toronto’s regulations and LPAT on Monday released a decision dismissing the appeals.

Commercial operators – some of whom manage or own networks of dozens of apartments and rooms in the city – stand to lose the most under the new regime. A group of Airbnb hosts launched the appeal to the city regulations, with the first hearings taking place in June and August.

The City of Toronto’s win at the Local Planning Appeal Tribunal (LPAT) in defence of its new regulations for the short-term rental market could pave the way for the City of Ottawa to implement its own rules over the next year.

My corporate clients who operate short-term rentals are disappointed that the zoning bylaws were allowed to go into force. They are planning to appeal and argue that the LPAT decision included legal errors, said Jason R. Cherniak, who represented several of the commercial operators in the appeal. He also contends that the ruling may allow his clients grandfathered status to continue letting them operate their businesses.

The tribunal did leave open the possibility that because the previous bylaw did not define a length of time for a tenancy, any short-term rental units created before the new bylaw passed might qualify for legal non-conforming status under Ontarios Planning Act.

Ottawa city council still has to approve the proposed regulations on Nov. 27, but the community and protective services committee last Friday voted 5-3 in favour of the staff recommendations.

There are about 21,000 short-term listings in the city, but local activists and researchers have argued that as many as 5,000 homes in Toronto have been permanently converted to short-stay accommodations. In a city facing acute rental shortages, with the vacancy rate falling as low 1.1 per cent, returning those units to long-term renters could ease what many see as a crisis.

The adjudicator’s decision cited Toronto’s attempt to return housing to the long-term rental market.

The ruling states that about 30 per cent of all listings are not in the primary residence of an operator, and those units account for more than half of the 1.8 million nights sold in the city on short-term platforms.

LPAT adjudicator Scott Tousaw, who wrote the ruling, cautioned that the new rules would not necessarily return any of those units currently used for short-term rentals (STR) to the long-term housing market.

But he stressed that the rules could help in future. One fact is indisputable: each dedicated STR unit displaces one permanent household. That household must find another place to live. This phenomenon is occurring in increasing numbers in Torontos residential areas, the very places that are planned, designed and built to provide housing for residents, he wrote.

This is a major victory for tenants across Ontario, said Thorben Wieditz, in a statement released by Fairbnb Canada, which has lobbied for stronger rules on short-term rentals. Much of the chairs reasoning reflects our position and confirms that we have been reasonable advocates for fair rules from the very beginning.

In June, McGill University professor David Wachsmuth released research that suggested more than 31,000 homes across Canada are rented out on Airbnb often enough to remove them from the housing supply. The report estimated that hosts who rent out these units in cities collected as much as $374-million in revenue in 2018. Toronto was the platforms largest metropolitan market. McGill estimated 5,200 units have been removed from long-term housing uses in the city.

Airbnb has challenged Prof. Wachsmuths numbers, but has not provided access to its own data for researchers to verify its assertions.

While this ruling provides regulatory certainty for home sharing in Toronto, we continue to share our hosts concerns that these rules unfairly punish some responsible short-term rental hosts who are contributing to the local economy, said Alex Dagg, director of public policy for Airbnb Canada.

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A provincial tribunal has ruled in favour of Toronto's plan to put stricter regulations on the city's short-term rental market.

The Local Planning and Appeal Tribunal (LPAT) made its decision Monday, nearly two years after the city first approved the bylaws.

Under the rules, Toronto will require short-term rental operators to live at the home they list on sites such as Airbnb.

Operators will also be allowed to rent a maximum of three bedrooms in their home or their entire property. They will be required to register with the city to rent out space in their homes.

In his ruling, adjudicator Scott Tousaw described the regulations as "good planning in the public interest."

"This is good news for Toronto residents and a step in the right direction when it comes to regulating short-term rentals and keeping our neighbourhoods liveable," said Toronto Mayor John Tory Monday in a written statement.

The regulations are essentially designed to increase the availability of long-term rentals by decreasing the number of homes eligible to be listed on sites like Airbnb and VRBO.

However, the rules were not implemented due to multiple appeals made to the LPAT, formerly known as the Ontario Municipal Board. The appeals were launched by several short-term rental operators seeking to challenge the city's bylaws.

Ana Bailão, Toronto's deputy mayor and housing advocate, said the ruling strikes a fair balance that will benefit both tenants and homeowners looking to leverage their properties.

LPAT rules in favour of City's short-term rental by-law: regulation is a "reasonable balancing…has a solid basis and planning rationale." After a long appeal, we can now move forward protecting long-term rental suites while still allowing short-term rentals where reasonable.

Airbnb and other companies operating in the short-term rental market will now be required to pay a one-time license fee of $5,000, plus $1 for each night booked through their platform.

Rental operators will also be charged with a four-per-cent municipal accommodation tax on all rentals that last less than 28 consecutive days.

Thorben Wieditz of Fairbnb, a coalition that represents the hotel industry, along with property owners and tenants, called the decision a "major victory for tenants across Ontario."

The LPAT decision notes that some 5,000 units could return to the long-term rental market with the new regulations, though that number may also be somewhat lower, depending on how operators respond to the changes.

"Whatever the number, one fact is indisputable: each dedicated [short-term rental] unit displaces one permanent household. That household must find another place to live," Tousaw wrote. 

"This phenomenon is occurring in increasing numbers in Toronto's residential areas, the very places that are planned, designed and built to provide housing for residents."

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