Toronto unveils new short-term rental rules, but critics warn there are loopholes

Torontonians will be required to live at the home they list on short-term rental sites like Airbnb, but critics say new rules unveiled by the city Wednesday don't go far enough.

The rules are just suggestions at this point, but city staff are urging councillors to create a brand new zoning category for short-term rentals. If approved, Torontonians would be able to offer up to three short-term rental rooms within their home, or their entire home, as well as a lawful secondary suite like a basement apartment.

The report also suggests tenants would be allowed to rent out their primary residence.

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Anyone planning to offer a part of their home on a short-term basis (28 days or less) would have to pay $50 to register with the city. Platforms like Airbnb, VRBO and others will have to pay a one-time $5,000 fee, as well as $1 per night booked.

Tracey Cook, the city's executive director of municipal licensing and standards, described crafting the rules as a "balancing act." She says 95 per cent of those running short-term rentals aren't causing problems, and should be protected, but the city does have to crack down on those running multiple listings — something advocacy groups like Fairbnb say is turning downtown condo towers into "ghost hotels." 

Cook warned anyone caught violating the primary residence rule will be charged and blocked from running short-term rentals in the future.

However, she admits some may try to get around the rules.

Fairbnb, an advocacy group that's lobbied for stiffer regulations on short-term rentals, is already warning that allowing people to list secondary suites will take potential long-term rental units off the market. It's urging council to follow Vancouver's plans to block those units from being listed.

Fairbnb says as they stand, the rules could lead to hundreds of students and low-income residents being evicted from their rentals.

However, Cook says right now there's nothing in place and that the rules will provide some clarity. "Right now people are confused," she said.

Multiple committees to discuss changes

Toronto has been grappling with a lack of affordable rental housing units, something chronicled by the CBC Toronto series No Fixed Address.

Geordie Dent, executive director of the The Federation of Metro Tenants' Associations, told reporters many people calling his organizations tenant hotline are finding it "impossible" to find a place. 

"And the fix for that is more units. Airbnb is doing the opposite — it's taking them off the market," he said. 

Airbnb, meanwhile, welcomed the regulations, although the company expressed some concerns about new restrictions like limiting people to only share their homes for 180 days in a year. 

"We see that as just really adding more red tape and burden on families," said Alex Dagg, Airbnb Canada's public policy manager.

Dagg says she hopes councillors won't reverse plans to allow users to list basement suites, noting many list them to help make enough money to get by, but can't rent them long-term.

The city's report outlining the changes says the goal of the new zoning is to maximize the benefits people derive from running short-term rentals, like having the ability to rent out their own homes when they're not using them while also creating a "greater diversity in tourism accomodations."

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However, the regulations are also intended to curb problems that have emerged, primarily the loss of affordable long-term rental opportunities, but also the loss of community stability — particularly in "vertical communities."

The recommendations come after a lengthy public consultation process. Two separate city committees will debate the changes next week.

Mayor John Tory's executive committee, meanwhile, is set to discuss how much tax the city will levy on both short-term rentals and hotels at its next meeting.

Tory issued a statement about the suggested Airbnb reforms, saying he hopes to come to a list of regulations that address community concerns that can also be enforced. 

"We have an obligation to deal with these emerging technology issues as they change the way we do business and live our lives, without pretending these platforms don't exist," he said.