Toronto’s short-term rental regulations won’t solve the city’s housing crisis but they will help stabilize the supply of homes and reduce the nuisance issues of noise, garbage and parking afflicting residential neighbourhoods and condos following five years of proliferating Airbnb-type units. That was the testimony of a senior city planner, the opening witness at a tribunal that will decide whether the new rules ever take effect.
Caroline Samuel, who wrote the city staff report on the rental regulations, said Monday that the short-term rental zoning bylaw is less restrictive than the old rules because it renders the rentals a legally permitted use, which allows for home sharing across the city rather than just in the designated areas for existing commercial sleeping accommodations such as hotels, tourist houses and bed-and-breakfasts.
About 60 people — residents in favour of the regulations and landlords concerned about their impact on the rental business — turned up for the opening statements in the first day of what is expected to be seven days of hearings in a Bay St. office tower.
Samuel told the tribunal that city council designed the short-term rental regulations in response to mounting complaints and concerns that had been mounting since 2014. Council approved a set of rules that would limit the short-term rentals — a term of up to 28 days — to three rooms of a home which could be let 365 days a year or the rental of an entire home for up to 180 days.
Secondary suites such as self-contained basement apartments could only be rented on a short-term basis by a long-term tenant, not the homeowner, under the city’s regulations.
“In my opinion it is good planning to restrict the use of short-term rentals in secondary suites to only those that are separately and exclusively occupied as a principal residence. This helps ensure the use of the units remain residential and they stay in the housing supply,” Samuel told the Local Planning Appeal Tribunal (LPAT) headed by Scott Tousaw.
The zoning bylaw was supposed to take effect in June 2018 followed by licensing and taxation provisions. However, it’s been waiting on the appeal by landlords, who argue that short-term rentals are a residential rather than commercial property use and that there is no proof any of the rentals will be returned to the long-term housing supply even if the regulations take effect.
Samuel told the tribunal that “the principal residence requirement is what keeps the secondary suite residential.”
When a home is used as a short-term rental and it is not the landlord’s principal residence, there is increased difficulty in controlling noise and garbage, something that Toronto police and the city’s Licensing and Standards Division has confirmed, she said.
Through a data-sharing arrangement with Airbnb and Expedia, the city found the number of short-term rentals had tripled between 2014 and 2016. About 70 per cent of the rentals were principal residences, but 3,200 were not. Samuel said the city does not have any updated data.
But a study by McGill University’s David Wachsmuth, who is scheduled to appear before the tribunal later this week as an expert witness for Fairbnb — a coalition of tenant groups, condo boards and the hotel industry — found the numbers have continued to grow since the city’s public consultations on the matter.
Get more of today’s top stories in your inbox
Sign up for the Star’s Morning Headlines newsletter for a briefing of the day’s big news.
His research shows that short-term rentals increased 11 per cent in Toronto — to 21,000 active listings — in the year ending April 30, 2019. Listings earned an average of $10,400 in annual revenue and the 14,000 rental hosts earned $208 million last year collectively. Two-thirds of Toronto listings were for entire homes, most of them studios and one-bedroom apartments.
Wachsmuth’s study shows short-term rentals have removed 5,500 housing units from the long-term supply. Fairbnb lawyer Monica Poremba told the tribunal that “The city is facing a housing crisis and the proliferation of short-term rentals, which has gone unchecked, is exacerbating that crisis.”
But Sarah Corman, a lawyer for appealing landlord Alexis Leino, whose legal costs are being covered by Airbnb, said the appeal “is about preserving the diversity of accommodation that is available in our city.” Some tourists want to live like a local, she said. Short-term rentals also accommodate people visiting family, those who travel for work or medical reasons, she added, suggesting that this new kind of accommodation has transformed the experience of many newcomers to the city.
Corman said Leino is very respectful of his neighbours and encourages his guests to use local businesses. She also said that the city’s public consultations suggested secondary suites should be allowed as short-term rentals, but that council had rejected that staff recommendation.