The city of Toronto has the green light to go ahead with new rules limiting Airbnb and short-term rentals. On Monday, a provincial tribunal finally ruled on the matter after two years in limbo, siding with Toronto and rejecting an appeal by a group of landlords.
Torontos rules were initially approved by city council in December 2017. Under the plan, short-term rentals are only allowed in a landlords principal residence for no more than 180 nights a year. Homeowners can rent a maximum of three bedrooms all year long for no more than 28 days at a time. Landlords arent allowed to list secondary suites or basement apartments as short-term rentals at all—only the tenants who live there can rent them for 28 days or less. A spokesperson with the city said that details on implementing these rules will be available in December.
This decision dragged on for so long that in January of this year, Toronto took the unprecedented step of asking Airbnb to abide by the rules voluntarily. Airbnb declined. The San Francisco-based company—worth an estimated US$38 billion—is the biggest short-term rental operator in the city. Last month, a VICE investigation uncovered a U.S.-wide scam on Airbnb and raised questions about its verification and refund process. The multinational corporation said it would verify all seven million listings and make changes to the way it operates as a result.
“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, in a written statement.
The Local Planning Appeal Tribunal (LPAT), which is the provincial body that approved Torontos regulations, stated that this move could return 5,000 of the estimated 21,000 Airbnb units to the market. That number represents about 25 percent of Airbnb units in Toronto, but doesnt include listings on other platforms such as Kijiji and VRBO. The rental vacancy rate in Toronto is around one percent, which is historically low—meaning that for every 1,000 rental units in the city, only ten are available.
In a written statement to VICE, Alex Dagg, Airbnb Canadas public policy manager, said 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.
The Local Planning Appeal Tribunal said that it dismissed an appeal by residents who opposed new rules that placed limits on how people can rent out their properties.
Toronto mayor John Tory issued a statement that the citys plan aims to strike a balance between letting people earn some extra income through Airbnb and [other rental sites], but we also wanted to ensure that this did not have the effect of withdrawing potential units from the rental market. People who occasionally rent out their home, or parts of it, wont notice much of a difference.
The new rules require landlords to register their rentals with the city and pay $50. Rental platforms such as Airbnb and VRBO have to pay a one-time licence application fee of $5,000 as well as $1 for every night booked. Landlords will have to pay an accommodation tax of four percent on short-term rentals (less than 28 consecutive days).
Toronto placed the rules to address concerns about how short-term rentals are reducing the rental stock in the middle of a housing crisis.
Thorben Wieditz runs Fairbnb—which represents tenant advocates, academics and the hotel industry—and describes the ruling as Airbnb suffering an immense defeat. Torontos regulations are similar to rules already in place that limit short-term rentals in Vancouver.
Although Wieditz says there are ways around the rules, they take aim at people who use Airbnb to run what is essentially a hotel business, with multiple properties available year-round—places that could be homes for people who live and work in Toronto, one of the most expensive places to own a home or rent in the country.
Commercial hosts are real estate investors who commodify our residential housing stock. They operate anywhere from two to many dozens of so-called entire homes, be these houses, apartments or condo units. They use residential housing stock as hotel inventory in buildings that were not planned, zoned, approved and built as hotels, but as residential buildings, Wieditz said.
The group of landlords who opposed the rules have 30 days to file an appeal or request a review of the decision. Its not yet clear if they will.
Stricter rules governing Airbnbs and other short-term rentals in Toronto are coming following a decision handed down by the Local Planning and Appeal Tribunal (LPAT) — here's what you need to know.
Back in December 2017, Toronto city council approved zoning bylaw amendments that were supposed to take effect in June 2018. However, those rules were put on hold as they were challenged at the LPAT, which made its final ruling on Monday.
Adjudicator Scott Tousaw described the regulations as "good planning in the public interest."
Mayor John Tory called the decision to back the city's rules "a step in the right direction," while other councillors have said it will lead to thousands of potential rental units being put back onto the market as the city grapples with major affordable housing issues.
The city says it will have more information in December about implementation, timelines, and how the licensing, registration, and four per cent Municipal Accommodation Tax (MAT) will work.
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.
Under the new rules, short-term rentals will only be allowed in landlords' principal residences for up to 180 nights a year for an entire house or apartment. Homeowners could also rent up to three bedrooms year-round on a short-term — defined as less than 28 days — basis.
The city has not said how it intends to enforce the new rules. But all short-term rental operators will be required to register with the city and attain a licence.
The tribunal was not requested to consider whether the return of units to the rental market would have a measurable effect on the availability and affordability of housing. But it notes that, throughout the hearings, no one disputes that there is a housing crisis in Toronto and that availability and affordability of housing are interconnected issues influenced by a host of contributing factors.
Narmadha Rajakumar, a senior planner with the city, who was called as a witness during the hearings, notes that the potential return of dwelling units and secondary suites to the long-term rental or ownership market, may assist, even in a small way, the availability of housing in the city.
Expert witnesses for the appellants claimed there would be an insignificant return of dwelling units to the long-term rental market.
The tribunal says the zoning bylaw amendments serve to protect the housing supply as permanent domiciles for residents, and second, by responding to the availability and affordability issues, if not by returning units to the rental market, at least by preventing further conversions of dwelling units into dedicated short-term-rentals.
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