No re­lief for res­i­dents plagued by Airbnbs

City punts de­ci­sion and ac­tion down the road for an­other year

North Toronto Post - - News Real Estate - By Eric Sto­ber

The city of Toronto has agreed to post­pone an ap­peal of re­stric­tions to Airbnb for a year due to an ad­journ­ment, leav­ing the pro­lif­er­a­tion of short-term rentals in the city unchecked.

On Sept. 5, the city’s lo­cal ap­peal board, the Lo­cal Plan­ning Ap­peal Tri­bunal (which re­placed the On­tario Mu­nic­i­pal Board) ac­cepted an ad­journ­ment re­quest from one of four ap­pel­lants who ap­pealed re­stric­tions placed on Airbnb by the City of Toronto in De­cem­ber 2017.

Peo­ple can make a lot more money in an un­reg­u­lated shadow econ­omy.”

One ap­pel­lant has since with­drawn, ac­cord­ing to the tri­bunal. Due to sched­ul­ing con­flicts, the next avail­able date for the hear­ing turned out to be Aug. 26, 2019. This de­lay means that Airbnb re­stric­tions ap­proved in De­cem­ber will not take ef­fect un­til af­ter the ap­peal is heard, leav­ing con­cerns over short-term rentals in Toronto un­ad­dressed.

The re­stric­tions ap­proved in De­cem­ber 2017 in­cluded lim­it­ing Airbnb rentals to prop­er­ties where the host is the prin­ci­pal res­i­dent, as well as ban­ning home­own­ers from list­ing sec­ondary suites, such as base­ment apart­ments. Toronto City Coun­cil also voted to have Airbnb hosts reg­is­ter with the city, al­low­ing the city to track whether ex­ist­ing list­ings have a per­mit num­ber or not.

The rules were meant to be en­forced in June 2018, but an ap­peal filed and sched­uled for Au­gust — and now moved to 2019 — has de­layed them.

“[The rules were] in­tro­duced to al­low the city to get a han­dle on more and more Airbnb hosts that are leas­ing or buy­ing up en­tire con­dos and houses on res­i­den­tial streets in or­der to use them as quasi ho­tels,” said Thor­ben Wieditz, a spokesper­son for Fairbnb, an ad­vo­cacy group for short-term rental reg­u­la­tions.

Ac­cord­ing to a 2017 study by McGill Univer­sity, 10 per cent of Airbnb’s hosts earn the ma­jor­ity of Airbnb rev­enue, and that rev­enue is largely gen­er­ated by “mul­ti­list­ings,” where hosts have three or more en­tire homes listed.

The study also shows that Airbnbs in Toronto and other ma­jor cities have proven to be very prof­itable, with Airbnb hosts in Toronto, Mon­treal and Van­cou­ver ac­quir­ing $430 mil­lion in col­lec­tive rev­enue in 2016 — a 55 per cent in­crease over 2015.

The prospect of a small num­ber of hosts own­ing mul­ti­ple prop­er­ties and mo­ti­vated by large prof­its can be prob­lem­atic, Wieditz ex­plained.

“This con­cen­tra­tion of Airbnb in­ven­tory in fewer and fewer hands, so to speak, is what causes a lot of the dis­rup­tions in the city,” Wieditz said.

“It is what causes the prob­lems in the rental mar­ket, in terms of the avail­abil­ity of units, but also that’s what causes a lot of the dis­rup­tions in neigh­bour­hoods where you end up with party houses.”

Post City pre­vi­ously re­ported in Au­gust on a multi-list­ing Airbnb host in mid­town Toronto who has gar­nered com­plaints from lo­cal res­i­dent Lisa Sa­bato about a num­ber of is­sues from neigh­bour­hood sta­bil­ity and af­ford­abil­ity to loud late-night par­ties.

In ad­di­tion to cre­at­ing prob­lem­atic “party houses,” Airbnbs are con­sum­ing much­needed prop­erty down­town.

Ac­cord­ing to a 2017 re­port by Ry­er­son City Build­ing In­sti­tute and Ever­green, the vacancy rate in down­town Toronto is around 1.4 per cent, far be­low the healthy rate of three per cent. Seventy per cent of com­mer­cial Airbnb list­ings are lo­cated in 10 down­town neigh­bour­hoods — ac­cord­ing to AirDNA, a web­site that com­piles data on Airbnb — com­pound­ing the vacancy is­sue.

How­ever, there ap­pears to be lit­tle in­cen­tive for land­lords to place their prop­erty on the longterm mar­ket. A full-time host only needs to rent a unit for half a year to make what a tra­di­tional land­lord would make in a year on the long-term mar­ket, ac­cord­ing to AirDNA.

As well, Airbnb land­lords are able to skirt reg­u­la­tions such as the Res­i­den­tial Ten­an­cies Act and ho­tel in­dus­try reg­u­la­tions.

“Peo­ple can make a lot more money in an un­reg­u­lated shadow econ­omy where their money is not be­ing tracked,” said Wieditz.

The Ry­er­son re­port states that Toronto needs at least 8,000 new rental units per year to get to a healthy vacancy rate.

If city reg­u­la­tions are en­forced, the re­port es­ti­mates that 3,200 short-term rental prop­er­ties would not meet the reg­u­la­tions and thus be put back on the mar­ket, pro­vid­ing “im­me­di­ate re­lief to the Toronto Area’s low vacancy rate.”

Hume­wood res­i­dent Lisa Sa­bato

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