Regulatory framework for short-term rentals in Ottawa passed by divided committee

Ottawa's community and protective services committee held a marathon hearing on Friday, Nov. 15, 2019 about proposed new rules for short-term rentals, like Airbnb listings, and long-term rentals.
Ottawa's community and protective services committee held a marathon hearing on Friday, Nov. 15, 2019 about proposed new rules for short-term rentals, like Airbnb listings, and long-term rentals. Beatrice Britneff / Global News

The City of Ottawa took a big step in its mission to regulate short-term rentals in the national capital on Friday after a 10-hour hearing on a regulatory framework that, if implemented, would ban people from renting their property for limited periods if they don’t live there and force hosts to register with the city.

Councillors on the community and protective services committee voted 5-3 in favour of the proposed new rules, which would apply to short-term rental hosts, agents and platforms like Airbnb.

Ottawa city council still needs to approve the regulatory regime. If greenlit, the new bylaws and regulations would be drafted in 2020 and go back to council for approval before they go into effect, a process that could take up to a year.

Prince Edward County opens up licence applications for short term rental properties
Prince Edward County opens up licence applications for short term rental properties

In a report this month, city staff proposed a new bylaw that would restrict short-term rentals (less than 28 consecutive days) in Ottawa to properties where the hosts live — rentals in investment properties would be prohibited — and require hosts to register and get a two-year permit from the municipality.

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To get that permit, hosts would have to provide identification, proof that their property is their primary residence — such as a deed or lease — and pay $100.

That permit could be revoked for “egregious or repeated violations of city bylaws,” staff’s report said.

The proposed bylaw would include fines for different violations and also require short-term rental platforms to provide data about their hosts and listings on a regular basis to the City of Ottawa.

The plan also suggests creating a special unit within the bylaw department to enforce the new rules, which would not apply to cottages, hotels, motels or bed and breakfasts.

READ MORE: Ottawa police investigate shooting at Airbnb on Meadowlands Drive

Staff, however, are also proposing a separate “temporary use bylaw” to give more flexibility to people who want to rent their primary residence when they’re not around for a maximum period of three years — referred to as a “snowbird option.”

The city is moving forward with the new regulations in part to deal with nuisance properties that are sites for large parties or crime. However, municipal officials also believe short-term rentals are eating into Ottawa’s dwindling long-term rental housing stock, driving up prices for the units that remain.

Airbnb contributing to Toronto housing crisis: report
Airbnb contributing to Toronto housing crisis: report

During Friday’s marathon meeting, Coun. Catherine McKenney, council’s liaison on housing and homelessness, read out emails from constituents who reported being evicted from their rental units and claimed those homes were then converted into short-term rentals.

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Downtown councillors have also received complaints about people buying up entire properties specifically to rent them out for short periods, something commonly referred to as “ghost hotels.”

Airbnb supports permit system, rejects ‘narrow’ definition of primary residence

But Alex Dagg, Airbnb’s policy director in Canada, argued on Friday that restricting short-term rentals to primary residences won’t return many units to the long-term rental market.

Many hosts own secondary properties that they do stay in occasionally, and then rent them out when they’re not using them, Dagg said. “Strict” short-term rental regulations passed in Vancouver last year haven’t budged the vacancy rate, she claimed.

Alex Dagg is Airbnb’s policy director in Canada.
Alex Dagg is Airbnb’s policy director in Canada. Beatrice Britneff / Global News

Dagg said Airbnb supports Ottawa’s proposed online permit system but argued that staff’s “narrow” definition of a primary residence is “too restrictive for this community” and would be “harmful” to residents and visitors.

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“We really routinely see very responsible hosting [and] very responsible guests on our platform,” she told reporters.

“Restricting people’s ability, for example, to share space in a basement suite in their own home, which they use from time to time, that doesn’t make any sense. Neither does someone who stays in an apartment from time to time in Ottawa.

“Allow those people to short-term rent. It makes sense.”

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Dagg also argued before committee that the revenue hosts earn from Airbnb is an important “economic driver” for Ottawa. There are 4,600 Ottawa listings on Airbnb today, she said, and within the last 12 months, hosts in the national capital earned a combined $36 million.

READ MORE: Should Canadian cities ban Airbnb and other home-sharing platforms?

When asked by councillors, Dagg said she didn’t have data on hand — specific to Ottawa — that shows how many Airbnb listings are secondary dwellings; how many Airbnb hosts have multiple listings; how many local listings Airbnb has pulled from its platform; or how many complaints Airbnb has received from Ottawa.

Councillors went back and forth with Dagg for about an hour during Friday’s meeting, an exchange that got heated at some points as some pressed her to say whether Airbnb would comply with the regulations — specifically, sharing its data — if they go into effect.

“In Vancouver, we have voluntarily agreed to share data. We may consider to voluntarily provide data here in Ottawa as well,” Dagg replied.

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“But we’d like to obviously see what the bylaw looks like.”

Asked a similar question by reporters, Dagg said the question is rather “how to get the rules right” and Airbnb will keeping communicating with the city about the proposed regime.

Airbnb owners, property managers say rules too restrictive; neighbours support them

Dozens of people signed up to address the committee on Friday, including multiple owners of properties listed on Airbnb, who decried the suggested short-term regulations. Many said the prohibition of secondary dwellings is too restrictive.

Owners of companies that manage large numbers of Airbnb properties, including Genevieve Walton of Short & Suite BnB, argued that the rules would kill jobs, that rented-out primary residences won’t fill demand and that solving Ottawa’s affordable housing problem is not their responsibility.

Some neighbours of local Airbnb properties, meanwhile, celebrated the proposed regime and shared horror stories as they urged councillors to vote in favour of the rules.

READ MORE: Wild student party at rented home causes $80K damage

Rob Hanlon lives next door to a home on Benson Street in Nepean that he said is an Airbnb property rented out consistently to large groups and whose owner lives out of town. A shooting that occurred on the property in October, sending two men to hospital, “irreversibly changed” his family’s life,” he told councillors.

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“We have lost the enjoyment of our property,” Hanlon said.

“There is not a homeowner in Ottawa who would want to put up with what we and others have living next to a ghost hotel.”

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Dagg said on Friday that particular property has been banned from Airbnb, adding that the company takes “immediate action” to try to remedy “an unfortunate or tragic or horrible incident.”

As debate continued at city hall, word came in from Ottawa police that their guns and gangs unit was investigating a shooting Thursday night at a Nepean home that Airbnb confirmed was listed on its site.

Airbnb bans party houses after mass shooting in Orinda, Calif.
Airbnb bans party houses after mass shooting in Orinda, Calif.

The committee hearing in Ottawa came a week after Airbnb pledged to crack down on so-called “party houses” listed on its platform around the world and to verify all seven million of its listings by mid-December, 2020.

Airbnb also said it will launch a 24-hour hotline next month — and roll it out globally over the next year — that will be staffed by a “rapid response team” in the United States so that guests or neighbours can more easily report problems.

Decision in Toronto LPAT fight could change Ottawa’s approach

The short-term rental regulatory framework for Ottawa will go to council for approval on Nov. 27. The national capital is just one of many Canadian cities and towns to explore or implement similar rules in their jurisdictions.

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Regulations passed in Toronto are currently being challenged at the Local Planning Appeal Tribunal (LPAT). Anthony Di Monte, the city’s general manager of emergency and protective services, recommended that city council wait until that case has been decided to pass its own short-term rental bylaw because the result might impact Ottawa’s approach.

READ MORE: Alleged Airbnb fraud in Fredericton leaves international student stranded

Councillors Stephen Blais, Eli El-Chantiry, and Matthew Luloff were the three councillors who didn’t support the proposed regime. Blais and El-Chantiry argued that the uncertainty around Toronto’s LPAT fight leaves too many questions unanswered right now.

“The fact of the matter is this could all be unravelled,” Blais said. “I don’t think we’re anywhere close to being ready.”

Di Monte acknowledged there are “impediments” but moving forward would “at least prevent continual erosion” of the housing stock.

In Vancouver, several thousand short-term rentals have been delisted since last year, 300 rental units have been returned to the long-term housing market and 6,500 condo units have been protected from becoming short-term rentals, city staff said.

READ MORE: More than 3,600 rogue short-term rental operators in facing enforcement, says City of Vancouver

In the same report that was debated Friday, staff also proposed to create a separate rental property management bylaw for the maintenance of long-term rentals.

This bylaw would enforce new regulations for communication between landlords and tenants over property issues and pest control. The fee for bylaw officers to re-inspect a property would be hiked to $500 immediately.

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Those new rules for long-term rental housing were also approved by the committee and are subject to council approval. It’s expected that bylaw would go to council for approval in early 2020.