After nearly two years in limbo, new rules regulating Airbnb and other short-term rentals in Toronto have finally been approved, marking a big win for tenants.
On Monday, November 19, the province’s Local Planning Appeal Tribunal (LPAT) rejected an appeal by Airbnb landlords and ruled in favour of the zoning bylaw amendments, which were originally approved by city council in December 2017. Those rules were supposed to go into effect in June 2018, but were never enforced due to the LPAT appeal.
Under the new zoning bylaw amendments, short-term rentals will only be allowed in principal residences, which means landlords will not be able to list secondary suites like basement apartments. Homeowners or tenants can rent up to three bedrooms year-round on a short-term basis – as defined as less than 28 days – or an entire house or apartment for up to 180 nights a year.
In the ruling, LPAT adjudicator Scott Tousaw wrote that the new rules could bring back thousands of units to Toronto’s rental housing stock. “Whatever the number, one fact is indisputable: each dedicated [short-term rental] unit displaces one permanent household. That household must find another place to live,” Tousaw wrote.
Fairbnb, a coalition of tenant advocates, community groups and union hotel workers – estimates, that 5,000 of Toronto’s more than 20,000 total Airbnb listings could be returned to the long-term rental market.
“Toronto has an extremely low vacancy rate of less than one percent, which means that only 10 units out of 1,000 are available” says Thorben Wieditz, a Fairbnb spokesperson in an interview with NOW. “Even putting 5,000 back on the market would significantly increase the vacancy rate.”
The new rules would also restrict “ghost hotels,” which are Airbnbs operated by hosts who have more than two listings. According to a report released by Fairbnb in January, the highest concentration of ghost hotels are in the downtown waterfront communities and nearly 90 per cent of those are condo units.
“We want owners to take more responsibility over the issues that arise from short-term rentals,” says councillor Ana Bailão, who has advocated for the regulations. “Some of these Airbnbs are becoming party central.”
Indeed, condo dwellers in downtown Toronto have complained about Airbnb guests making excessive noise, parking in residents’ spaces and damaging common areas. According to the Fairbnb report, the number of Airbnb units in the waterfront communities grew by 30 percent from December 2017 to December 2018.
The city plans to enforce the new rules through a licensing bylaw. People who rent their homes short-term must pay the city a $50 registration fee, in addition to a four per cent Municipal Accommodation Tax (MAT) on all rentals that are shorter than 28 consecutive days. Meanwhile, the platforms like Airbnb must pay a one-time license application fee of $5,000, plus $1 for each night booked.
But it’s unclear when these new rules will come into effect. The landlords who opposed the rules have 30 days to request a review of the ruling or file an appeal to the Divisional Court.
In a statement e-mailed to NOW, Airbnb spokesperson Alex Dagg says: “While this ruling provides regulatory certainty for home sharing in Toronto, we continue to share our hosts’ concerns that these rules unfairly punish some responsible short-term rental hosts who are contributing to the local economy. We remain committed to working closely with the City of Toronto and the Airbnb community as these new rules are implemented.”