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City of Toronto proposes crackdown on Airbnb-style rentals

The Airbnb Inc. application is displayed on an Apple Inc. iPhone and iPad

Andrew Harrer/Bloomberg

The City of Toronto has introduced proposed changes to Airbnb-style rentals it says will help strike a balance between the need for short-term accommodations and the challenges they can cause in the city.

"The potential impacts of short-term rentals on our neighbourhoods, on existing industries and on housing affordability and availability must be carefully considered," Mayor John Tory said.

"What we don't need is the withdrawal of much-needed housing from permanent residents who need it or for neighbourhoods to deal with the comings and goings – sometimes daily – of different renters in multiple homes in a neighbourhood."

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The recommendations in the city's report are responding to the increased use of websites, such as Airbnb, that allow people to rent units on a nightly basis at prices often lower than those of hotels. The report found that the number of Airbnb listings in Toronto tripled between 2014 and 2016, with 15,869 listings and more than 10,000 properties rented in 2016.

Mr. Tory said he wants short-term rental services to continue, but added that regulations will protect neighbourhoods, increase the affordability and availability of housing and ensure there is fair competition between traditional and new industries. A short-term rental, the report stated, is any rental lasting up to 28 days in a row.

If the changes are approved by city council, Toronto residents would only be able to list short-term rental units of homes and condos in which they currently reside, including any secondary suites in those places. Residents would also be required to pay registration fees and provide emergency and safety information to guests.

After months of research and consultations, city officials are also recommending the licensing of short-term rental companies and changing zoning bylaws to establish a new land-use classification for short-term rentals.

Ashley Churchill was intending to list her condo – located in the entertainment sector in downtown Toronto – on Airbnb as a short-term rental if she moved out and purchased a second place. If the proposed changes go through, she may no longer be able to do so.

"I own my condo outright. So if I were to move, I'd use the income from this property to pay for the second property," she said.

"While I can appreciate the issue of lack of affordable rentals in the city, I think it's ridiculous that the city wants to ban Airbnb in standalone properties since it's mainly just city residents looking for extra income.

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"Is it not better tourists are paying regular people than a multinational conglomerate to stay in a hotel?"

Under the proposed regulations, 3,200 of the 10,800 Toronto properties rented on Airbnb in 2016 would have not been permitted because they were not principal residences, according to the report.

Critics of short-term rental units have argued that investors are taking on multiple properties and using them as "ghost hotels," which reduces the amount of affordable housing in the city.

The report stated that if properties were no longer used for short-term rental, they would probably be sold, left vacant or rented long-term. The report added that even if only half of the 3,200 units went back into the long-term rental-housing market, that would have a significant impact on housing availability.

Airbnb said it participated in the city's public consultation, and shared information and data about their online community.

"Airbnb welcomes the City of Toronto's move toward regulating home sharing," said Alex Dagg, public-policy manager at Airbnb. "We are reviewing the city's report in detail and look forward to providing our response and feedback to the executive committee."

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Fairbnb, a hotel-union sponsored pro-regulation coalition, welcomed the recommendations, but stated that the measures and how they are enforced need to be scrutinized.

"I think my greatest concern would be to have supernice regulations in place that everyone could live with, but then no one is really obeying the new regulations," said Thorben Wieditz, a spokesman for the coalition.

As part of the proposed changes, short-term rental companies would be required to work with the city by reporting quarterly data and sharing details about listings if requested by the city. In addition to proposed licensing fees, companies would be required to remove any listing that is not registered.

Mr. Tory's executive committee will be debating the measures at its meeting next Monday, and the city will be holding more consultations about the proposed changes. The final changes will be determined by city council, with Mr. Tory saying he would like to see the implementation of the measures in the fall.

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