City council taking a step toward regulating Airbnb-style rentals

Move follows staff report recommending public, stakeholder consultations be held early next year

A Toronto group pushing for the regulation of shortterm, Airbnb-style rentals is welcoming a city staff proposal to evaluate the impacts of the rentals and consider what kind of restrictions should be imposed on the booming business.

Fairbnb, which is led by the hotel workers union, says the report is an important step in ensuring there are rules governing short-term rentals. But it doesn’t go far enough in looking at how online rental platforms such as Airbnb can be held to account when that doesn’t happen.

“Platform accountability is really where it’s at if we want to develop regulations that work,” said Fairbnb spokesman Thorben Wieditz.

The city report, before executive committee Wednesday, recommends public and stakeholder consultations be held early next year to look at how to protect the interests of neighbourhoods and property owners and the city’s stock of housing.

It’s a good first step according to Ward 27 Councillor Kristyn Wong-Tam, who wishes it had come sooner as it will be at least another year before staff put specific regulation proposals before council.

Toronto has received more than 45 complaints to Municipal Licensing and Standards since 2014, related to short-term rentals, and there are 25 active investigations, says the city report. Two operators have been charged with zoning bylaw violations.

As well as the property damage, neighbourhood disruptions and criminal activity that some short-term rentals attract, the business is undercutting Toronto’s stock of licensed hotels by putting 10,000 additional accommodations into the city, said Wong-Tam.

The city is losing 2,000 hotel rooms. Some are being converted to condos. But Wong-Tam said, “We would be dishonest if we did not say that short-term accommodation is not having an impact on our hotel services and the business operations side of hotels.”

While it needs to mitigate the negative effects of short-term rentals, the staff report says it must also ensure residents can be allowed to occasionally rent their homes and that Toronto can promote tourism.

Although Toronto is behind some cities in considering licensing and restrictions for Airbnb-style rentals, it gives the city an opportunity to learn from other jurisdictions, said Fairbnb’s Wieditz.

“We can already assess what has been done elsewhere, what has worked and what has not worked,” he said.

The city report looks at six North American centres that have regulated shortterm rentals including Vancouver, Seattle, Philadelphia, New York City, San Francisco and Portland. All of them restrict the number of days a property can rent and four cities require licenses or permits.

Fairbnb plans to fly in the mayor and a councillor from Santa Monica, plus a New York assemblywoman, to speak directly to the executive committee chaired by Mayor John Tory.

“We can learn a lot from Santa Monica,” said Wieditz.

Santa Monica has 90,000 residents, but the ocean-side community attracts up to 500,000 visitors on weekends and holidays. Since June, Santa Monica has banned the rental of an entire home for less than 30 days. Hosts that share their homes with renters for short periods are required to apply for a city licence. They must also pay a 14-per-cent “transient occupancy tax,” to be collected by the online rental platform, to help the city enforce the rules.

But Airbnb is suing the city, saying its ordinance places an undue burden on property owners wishing to rent their places, according to a Los Angeles Times report.

In New York City, short-term rentals must pay an occupancy tax of 5.9 per cent, plus a room fee of 50 cents to $2 U.S. In Toronto, hotels and motels pay commercial property taxes, but bed-and-breakfast and shortterm rental properties pay residential property taxes.

Airbnb had 12,260 Toronto listings on Sept. 1, says the city report. There were another 2,000 listings on Flipkey, VRBO, HomeAway and Roomorama. Airbnb officials have repeatedly said that it welcomes regulation.

“Airbnb is pleased to see the city of Toronto is moving toward an inclusive consultation process on home sharing. We are reviewing the city’s report in detail. We look forward to participating in the process and to continuing to share data and infor- mation about our community with city staff, Mayor John Tory and all of Toronto city council,” said an emailed statement from Airbnb’s Alex Dagg on Wednesday.

At a Toronto Star editorial board meeting last week, another Airbnb spokesperson noted that different cities have different regulations, including some that are very restrictive or require homeowners to register in person at city hall.

Some cities permit rentals for a primary home, but use more scrutiny when it comes to multiple rentals. With files from Vanessa Lu