Hamilton approves vacant homes tax, Airbnb bylaw to protect city’s housing supply

Hamilton politicians voted in favour of a pair of actions designed to protect the city’s housing supply.

On Wednesday, city councillors approved a new vacant homes tax to discourage speculators and hopefully open up empty units for rentals amid a housing crunch.

As per a 2022 staff report, the cost to launch the initiative will check in at around $2.6 million, including the bringing on of 16 full-time employees.

Annual costs to the program are expected to be offset by newly created revenues, according to the study.

Ward 3 Coun. Nrinder Nann, who previously suggested speculators were using the unoccupied dwellings to make profit, characterize the forthcoming levy as an “important tool.”

“It is part of a suite of policies, a suite of steps that this council is taking to ensure that we are addressing the affordable housing crisis that this municipality is facing,” Nann said.

Prior to seeking provincial approval for the tax, councillors also shared complaints about how some vacant properties precipitated snow-clogged sidewalks, unmoved lawns and other problems.

The Realtors Association of Hamilton-Burlington is one organization that has argued against the tax, with its president suggesting the added cost would “discourage economic investment.”

Lou Piriano says a levy at one per cent on a $900,000 vacant home is $9,000 a year, plus property taxes. He feels that’s an infringement of people’s rights to do what they want with their property.

“Can you imagine if … there was a used car shortage and … the city coming up and saying, well, you’ve got a car in the driveway you haven’t been using …  get rid of it or we’re going to tax it.”

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Vancouver introduced an empty homes tax in 2017, making it the first major city in Canada to implement such a measure, intended to crack down on foreign investment and property speculation. The city says the tax has cut down 25 per cent of vacant properties since its launch.

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Toronto and Ottawa introduced their own vacant home tax in 2022, while other jurisdictions like Mississauga, Ont., are considering implementing similar taxes.

Councillors have formally approved a bylaw to regulate short-term rental properties, primarily Airbnbs.

The regulations limit short-term rentals (STR) to a property owner’s principal residence with a business licence to guard against housing stock being converted to accommodation for tourists.

It also includes a cap with no one rental going for more than 28 nights consecutively.

An estimated 900 STR units are operating in Hamilton, with the highest concentration downtown, based on information gathered pre-COVID-19.

Around 60 per cent, or 600, of the units were reported to be unoccupied in early 2022, with a number of entire dwellings being rented out for use on platforms like Airbnb.

The plan was derived from staff report recommendations produced through public consultations, including an online survey suggesting the adoption of a regulatory scheme similar to one in place in Toronto.

City staff estimate the cost of administering the STR licensing program will be about $286,000 annually.

The deadline for all STR operators (hosts) to register and receive an STR licence is May 31.