Plug this loophole
There’s no question that Airbnb and other short-term rental companies, such as Vacation Rental by Owner, are here to stay.
Airbnb alone reports that10,800 properties were rented in Toronto through its site last year. The number of its listings in the city tripled between 2014 and 2016.
No wonder. Short-term rentals of rooms in a home or an entire house while owners are away can help pay the mortgage in this expensive city.
Still, the financial boon for homeowners has created problems for others. Some tenants have been evicted from their apartments only to see them advertised later on Airbnb. Residents living next to homes rented out on Airbnb complain they have become rowdy party sites. And, of course, hotel owners and their employees worry about unfair competition.
Happily, sensible proposals to regulate short-term rentals to resolve those issues are being presented for debate at city committees next week and the full council in December. If accepted, they will come into effect next June.
Most important is a stipulation that owners can rent out their property for a limited number of days each year while they are away, or rooms or units in it while they are there. That will help homeowners earn some cash while ensuring that separate investment properties remain on the market for long-term tenants — vital when the vacancy rate is just 1.3 per cent.
Still, there’s one major loophole the city must plug before the regulations are approved.
As the proposed rules now stand, homeowners would only have to “declare” that a property is their primary residence when they register it with the city as short-term rental. They wouldn’t have to prove it by presenting documentation, such as a current driver’s licence, as they do in San Francisco, for example.
That’s problematic. The city should require proof at the point of registration that a property is the owner’s primary residence in order to stop the spread of “ghost hotels,” absentee landlords and investors who would reduce the supply of long-term housing.
The city has already been warned about this gap in the rules. An independent study on regulating short-term rentals last June warned that permitting Airbnb “hosts” to self-certify would allow “commercial activity to slip through the cracks.”
City council should close that loophole and require documentation to prove that an Airbnb rental is in fact a primary residence. It’s the only way to make sure the new rules have teeth.