Toronto's short-term rental regulations under scrutiny as tribunal kicks off

Toronto's short-term rental regulations under scrutiny as tribunal kicks off

In early 2018, there were brand new short-term rentals that were approved by Toronto's city council, however they ended up becoming appealed before they were put in place. A delay in the appeal process last year put off the hearing until this week.

These new regulations include restricting rentals to an owner's principal residence and requiring all short-term renters to register with the city before renting and then have to pay a four per cent municipal accommodation tax.

The city sees these regulations as a great step forward in maintaining the cities accessibility and affordability of long-term rental options as Toronto faces an acute housing crunch.

Monica Poremba, a lawyer with the Fairbnb advocacy group, agreed.

"The City of Toronto is facing a housing crisis and the proliferation of short-term rentals, which has gone unchecked, has significantly exacerbated the crisis," she said in arguing in favour of the regulations.

Lawyers for residents hoping to continue to rent out whole suites for short-term rentals said the option is a long-standing practice that provides many benefits.

Short-term rentals provide more choice and cheaper options for visitors as well as newcomers to the city, while also maintaining flexibility for owners, said Sarah Corman, counsel for appellant Alexis Leino, a Toronto realtor.

"The city is now, with a sledgehammer, gutting this important and flexible form of short-term accommodation without sufficiently considering or understanding the likely impacts of doing so," she said.

Corman said that while there is a rental housing shortage, it's not because of short-term rentals and is instead because of a failure of government to get rental-specific housing built.

This means that with the government agreeing on plans of new apartment like complexes that can be rented out for long-term would be very helpful.

The hearing will look into 32 issues including questions around zoning, justifications for the primary residence restriction, economic impacts of the by-laws, effects on housing supply, as well as potential amendments to the rental by-laws.

These rules will be designed to limit how short-term rentals effect the availability of all of the longer-term rentals stock as major cities are fighting tight rental markets.

While restricting short-term rentals to primary residences, the rules allow an entire home to be rented out when an owner or long-term tenant is away, up to 180 nights per year.

Vancouver also has brought in rules in 2018 that makes it that short-term renters must obtain a business license and also the rules restrict rentals to a primary residence.

Focus on short-term rentals has increased as the market has grown significantly. Statistics Canada found that short-term rental revenue increased by almost 10 times between 2015 and 2018 to $2.8 billion. It found revenue in Ontario from short-term rentals climbed from $94 million in 2015 to $909 million last year.

A City of Toronto report found that in April 2017 there were an estimated 20,000 short-term listings over 16 websites, though it noted there were likely duplications. The report said Airbnb alone rented out 988,378 nights in the city in 2016.

The hearing in Toronto is scheduled to run seven days but could be extended.

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