Short-term rental loopholes allow ‘unscrupulous’ actions
Multi-unit owners’ use of medium-term leases dodges Ontario’s landlord-tenant regulations
Selling an apartment building isn’t always easy, partly because most buyers by law would need to assume the current tenants at their current rents. But the owners of a midtown three-storey brick apartment building for sale are offering buyers vacant possession, despite five out of six units being occupied.
How? Because its two-bedroom units are legally being used as short-term rentals of 28 days or longer — a loophole in Toronto’s short-term rental restrictions that housing advocates say contribute to home scarcity and drive up housing costs.
It’s a loophole that could be changing. The city has been pushing for the province to regulate these “medium-term” rentals, which it says it does not have authority over. But in a response to the Star, the province says municipalities could change bylaws to expand short-term rental policies to include these units.
The multiplex tucked behind St. Clair West near Vaughan Road is currently for sale for just under $5 million, with the real estate listing boasting vacant possession as a selling point. With its bright red door and sloped stone stoop, it looks every bit like the average apartment building — until you draw closer and see the neat line of lockboxes on either side of the door.
Joe Pereira, the Re/Max real estate agent for the property, said there’s a lot that sets the building apart: it’s on a private street with three private parking spots out front, and its walkable to shops and restaurants on St. Clair West.
“The fact that you can get six units completely vacant on possession in this market, that’s pretty unique,” Pereira said. “Usually if you buy an income property, you would have to assume the tenants.”
In Toronto, short-term rental bylaws dictate that vacation rentals with stays shorter than 28 days must be the registrant’s main residence. But, according to Coun. Gord Perks (Parkdale—High Park), who chairs the planning and housing committee, short-term rental stays of 28 days or longer fall under provincial jurisdiction and currently do not have such requirements.
Perks said some owners are “taking advantage” of the loophole in short-term rental regulations to get away with “unscrupulous practices,” such as abruptly terminating occupants’ stays and other practices that would be prohibited for landlords of long-term tenants.
In a recent effort to strengthen short-term rental bylaws, the city asked the province to clarify how the Residential Tenancies Act (RTA) applies to “medium-term” rental stays longer than 28 days but less than a year. In an email, the city confirmed that it “does not have the authority to determine” if these stays are subject to the RTA, or to create rental protections on units that have been made exempt from the RTA.
“We’ve made the province aware that there’s a real risk of abuse here, and that this could interfere with the city’s desperate need to create rental housing,” Perks said, adding he has not heard a specific response from the province. “If we could stop the 28-day rentals or regulate them, we would do so.”
A spokesperson for the Ministry of Housing, however, said it’s up to the city to create bylaws determining the length of short-term rental stays, and that it could revise the bylaws to expand its scope beyond 28 days.
It added that while the RTA does not apply to accommodations intended for travellers, the ministry said it “may apply” in cases of longterm Airbnb stays, although it did not clarify the threshold guests would need to achieve for that tenancy.
Last year, the Landlord and Tenant Board ruled that a Swiss couple whose 10-month stay in a Toronto Airbnb was cancelled halfway through were not tenants. Therefore, they didn’t qualify for protections under the RTA.
JJ Fueser, a researcher with Fairbnb Canada, said grey areas in short-term rental regulations, like those that exist for stays of 28 days or more, are causing the city to lose housing that would otherwise go to the tight rental market. According to Inside Airbnb, a group that provides data on Airbnb’s impact on communities, there are more than 14,600 Airbnbs offering stays of 28 days or longer, making up about 70 per cent of Toronto’s Airbnb listings.
But for one of the tenants of 1-9 Humewood Dr., the short-term rental has offered a temporary solution while he and his family seek long-term housing in a competitive market.
Artem Yershov, a Ukrainian man who came with his wife, mother and two-year-old daughter from Argentina, says they’ve been staying in the building for the past month while trying to find longterm rental housing. It’s been tough, he says, as he doesn’t have credit history in Canada.
They plan to move out in May, to a rental that has conditionally accepted them. “Everything that we need, we have here and we are very comfortable because of the size of the rooms,” he said.
Another tenant, who didn’t provide her name, said she came with her family to Toronto for a work opportunity and needed a furnished, shorter-term stay. She planned to stay until December and was unaware she might have to move if the building sold.
We’ve made the province aware that there’s a real risk of abuse here, and that this could interfere with the city’s desperate need to create rental housing. If we could stop the 28-day rentals or regulate them, we would do so.
COUN. GORD PERKS