Regs proposed for short-term rentals in Toronto

Tuesday, June 13, 2017

City of Toronto staff are proposing that short-term rentals be restricted to the home-sharing variety versus the commercial kind.

In a report to executive committee, staff sketch out regulations that, if adopted, would see residential rentals of 28 consecutive days or less limited to primary homes. In other words, operators of short-term rentals must live in the unit they’re listing.

Roughly 7,600 of the properties rented via Airbnb last year would meet this requirement, while roughly 3,200 would not, according to the report. Citing CMHC stats, staff point out that the vacancy rate, which is at a 10-year low of 1.3 per cent, could rise considerably if just some of those 3,200 units become available in the long-term rental housing market; there are roughly 3,350 vacant units in the private rental market.

The proposed regulations would see the City’s zoning bylaws revised to pave the way for owners and tenants to provide these temporary accommodations in up to three bedrooms, a whole unit or legal secondary suites. A new “short-term rental” use would be permitted in residential buildings in lands zoned for mixed and residential uses.

“It should be noted that short-term rentals were not previously defined in the city-wide zoning bylaw or other zoning bylaws, and therefore are currently not permitted,” states the staff report.

Operators of short-term rentals would be required to register with the City; comply with relevant laws, such as the Fire Code and noise bylaws; and give emergency contact information to guests. Registrations could be revoked for reasons including criminal activity at the rental property that results in convictions.

The companies that facilitate short-term rentals, such as Airbnb, would be required to be licensed with the City. In addition, these companies would be accountable for dealing with problem operators and removing the listings of unregistered operators. They would also be obligated to convey information about City rules to operators, disclose data wiped of identifying details to the City on a quarterly basis as well as data with details about operators on request by the City’s municipal licensing and standards division.

Short-term rental companies and operators would pay licensing and registration fees so the City could recover the cost of administering and enforcing the regulations. Base licensing fees for companies that facilitate short-term rentals would fall in the $5,000 to $20,000 range, according to staff projections, with sliding licensing fees tied to a measure such as the number of listings on their websites. Annual registration fees for operators of short-term rentals would fall in the $40 to $150 range.

The proposed regulations follow the explosion of short-term rentals in Toronto and reflect feedback from public consultations and stakeholder focus groups. The recommended rules are designed to diminish downsides of these temporary accommodations, such as building damage and loud parties, while retaining upsides, such as extra income for home owners.

Condominium stakeholders told staff that communities face challenges both in establishing and enforcing short-term rental rules. Some participants pointed to Chicago’s system of maintaining a list of buildings where short-term rentals are prohibited as a model worth replicating.

“Condominium boards would continue to be able to utilize their existing authority to further limit or prohibit short-term rentals through a declaration, bylaws or rules,” states the staff report.

If executive committee adopts staff recommendations at its meeting next Monday, staff will solicit feedback on the proposed regulations before reporting back with final recommendations later this year.

City staff is also looking into rolling out short-term rental and hotel taxes of up to 10 per cent and four per cent, respectively, in 2017. The move hinges on enabling provincial legislation that has yet to be proclaimed into force.

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