Toronto to consider regulations proposal for short term rentals like Airbnb

Published: June 14, 2017

Updated: July 24, 2018

Author: Luke Jones

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The City of Toronto is to consider a proposal to adopt regulations for short-term rental platforms, such as Airbnb. These outlets are currently unregulated, but the city could introduce new rules that would cover a variety of concerns, including taxation and safety.

Toronto is to take advice from the report created by the Executive Director, Municipal Licensing and Standards, and the Chief Planner and Executive Director, City Planning. The report was submitted a week ago and urges that Executive Committee to adopt new rules.

Specifically, the proposed regulations address zoning, licensing, and taxation. This would include creating a fee structure for companies who provide short-term rental platforms and residents who rent their homes for short term rentals.

Titled Backgrounder: Toronto’s Short-term Rental Review, the report recommends companies like Airbnb should report anonymized data about rental activities to the city, as well as pay a licensing fee. These companies should also be prepared to give the City of Toronto details on specific listings if requested.

“Residents and property owners are renting out rooms or entire units for short periods in growing numbers across Toronto, facilitated by the rise of these online platforms,” notes Backgrounder: Toronto’s Short-term Rental Review, adding that these rentals “are not currently regulated by the city.”

Airbnb is the most popular short-term rental platform in Toronto, and indeed the world. The company had around 10,800 Toronto properties on its network last year. This number is treble the amount in 2014, showing the market is growing rapidly. Authorities in the city believe such a rapidly expanding industry needs to be regulated.

The report to the Executive Committee makes numerous recommendations, such as giving people regulatory means to rent property, minimizing problems, and making a fair market. Specific recommendations are as follows:

  • Zoning: amend the Zoning Bylaw to create a new land use called “short-term rental” permitted city-wide, only in principal residences, and limit the number of rooms in a dwelling used for short-term rentals to a maximum of three;
  • Licensing and registration: license companies that facilitate short-term rental activity (associated fee of between $5,000 and $20,000, plus fee per night booked), create registry for residents who operate their homes as short-term rentals (associated fee of $40 to $150 per home), prohibit short-term rentals that are not in principal residence (these would be considered “commercial”), and require companies to use only registered operators/hosts; and
  • Taxation: implement a hotel and short-term rental tax in conjunction with the proposed licensing and registration framework, subject to provincial approval (regulation anticipated later this year) and city council approval.

“The proposed zoning framework would permit short-term rentals across the city in the principal residence of any owner or tenant in residential and mixed use zones and in all residential building types,” states the tracking report.

“Within their principal residences, people could rent: up to three rooms within a unit, separately; the entire dwelling unit; and lawful secondary suites,” it adds.

“A short-term rental would not be permitted in a dwelling unit that is not a principal residence. This restriction limits long-term housing from being converted to accommodation for tourists,” the report explains.

Also, “the proposed licensing and registration system would require that all short-term rental operators register with the city and post their registration number in all advertisements,” it says.