TORONTO – Politicians in Toronto will be scrutinizing proposed rules for short-term rentals this week that could spell major changes for those who offer secondary residences for rent on platforms like Airbnb.
Among the raft of regulations going before city councillors is a rule that would ban short-term rentals of homes that aren’t the landlord’s primary dwelling.
Some tenants are heralding the proposed regulations as much needed in a city grappling with high rents and low vacancy rates, while those who offer secondary residences on home-sharing platforms like Airbnb argue the rules would be punitive.
Under rules put forward by city staff, short-term rentals of 28 days or less would be allowed in up to three rooms of any home in Toronto as long as they are in the landlord’s “principal residence.”
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The original proposal allowed landlords to use separate units in a principal residence – like a basement apartment – for short-term rentals but the city’s planning committee rejected that aspect of the plan last month.
If the rules are approved, the city would create a registry of short-term rental landlords who would have to declare that their rental property was their principle residence and pay an annual fee of $50.
The proposed regulations are being hailed as a necessary step by Torontonians who say they’re struggling to find affordable or available rental properties in the city.
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“If they do in fact restrict them to principal residences I think it would free up a good number of the properties currently listed on Airbnb,” said Jackie Porter, a lawyer whose family rents a multi-bedroom house in Toronto’s east end.
Porter said she and her husband, a professor at the University of Toronto, found that multi-bedroom houses in the city centre, close to the university’s downtown campus, can cost around $4,000 per month and are in short supply.
“The state of the rental market now is, if you don’t contact someone about a place for rent within 24 or 48 hours, you’re out of the running, you might as well not even bother,” Porter said.
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“It’s no great mystery why,” she added. “If you can rent (short term) to a tourist for $300 or $400 a night, you’ll never get that from a long-term rental.”
Around 10,800 Airbnbs were rented out in Toronto in 2016, the company said. Airbnb estimates that over three quarters of their Toronto landlords are renting out space in their principle residence.
More than half of all Airbnb listings are in the city’s downtown, and the vast majority – over 80 per cent – accept only short-term bookings, the company said.
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Fairbnb, a coalition founded by a Toronto-area hospitality workers’ union to advocate for Airbnb legislation, says city hall must ensure that rental units are preserved for long-term renters, not vacation rentals.
“We have no problem with the typical Airbnb host,” spokesman Thorben Wieditz said. “We have a problem with those people that lease or buy properties as investments and turn them into ‘ghost hotels … Those are the properties that not only eliminate rental properties (but) drive up rental costs.”
Some Airbnb hosts, however, take issue with Toronto’s proposed rules.
READ MORE: Canadian cities mulling over different approaches to regulating Airbnb, home-rental platforms
Ajay Joshi, who hosts five Toronto condo units on Airbnb, said the proposed regulations would create more business for hotels because fewer Airbnbs would be available, while causing financial hardship for short-term rental landlords like him.
“Many people have made legal investments in buildings (that allow) short term rentals,” said Joshi. “Their livelihood is at stake, along with heavy investments in down-payments, paid land transfer taxes and furnishings.”
Kevin Makra, an Airbnb landlord for the past three years, said he hosts visitors in a condo he owns that’s down the street from his home in downtown Toronto.
He used to rent to long-term tenants but a bad experience – tenants’ cheques started bouncing and he had to navigate a complex bureaucratic system to get his money – steered him toward Airbnb, he said.
Airbnb landlords are often unfairly portrayed as selfish business people only out to make a buck, but they should be recognized as part of the local community, he said.
READ MORE: Airbnb in Canada: 10% of hosts account for most of revenue, McGill study finds
“I was born and raised in Toronto,” Makra said. “All the issues that people care about, I care about as well, whether it’s employment, education or affordable housing. I’m a very strong proponent of making positive rules that will help this city.”
Makra declined to say how much he earns through Airbnb, but said it is, on average, about $1,000-$1,500 more per month than he was earning by renting the condo out long term.
He is not opposed to the city regulating Airbnb, but is wary of the proposed restrictions.
“To be regulated is to be recognized, and I think that’s a large thing,” Makra said. “(But) I see it as two steps forward, one step back … There are some very strict rules and it’s going to affect a lot of people who are worse off than I am in terms of needing income.”
Alex Dagg, Canadian spokeswoman for Airbnb, wouldn’t comment on the proposal to restrict short-term rentals to the landlord’s principal residence, noting that Toronto hadn’t finalized anything yet.
She said, however, that the company was pleased with the amount of research and public consultation the city had done before issuing its recommended regulations.
The debate in Toronto comes after Vancouver city councillors approved rules last month that prohibit Airbnb and other short-term rental hosts from listing homes that are not their principal residence, including any secondary suites on their property.
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