Toronto's short-term rental regulations under scrutiny as tribunal kicks off

TORONTO — Housing advocates and property owners squared off Monday at a housing tribunal in Toronto that will determine the rules regarding short-term rentals like Airbnb.

Regulations for short-term rentals were approved by Toronto city council in early 2018 but were appealed before they could be put in place. A delay in the appeal process last year put off the hearing until this week.

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The regulations include restricting rentals to an owner's principal residence and requiring short-term renters to register with the city and pay a four-per-cent municipal accommodation tax.

The city has argued the regulations are important to maintain the accessibility and affordability of long-term rental options as the city faces an acute housing crunch.

Monica Poremba, a lawyer with the Fairbnb advocacy group, agreed.

"The City of Toronto is facing a housing crisis and the proliferation of short-term rentals, which has gone unchecked, has significantly exacerbated the crisis," she said in arguing in favour of the regulations.

Lawyers for residents hoping to continue to rent out whole suites for short-term rentals said the option is a long-standing practice that provides many benefits.

Short-term rentals provide more choice and cheaper options for visitors as well as newcomers to the city, while also maintaining flexibility for owners, said Sarah Corman, counsel for appellant Alexis Leino, a Toronto realtor.

"The city is now, with a sledgehammer, gutting this important and flexible form of short-term accommodation without sufficiently considering or understanding the likely impacts of doing so," she said.

Corman said that while there is a rental housing shortage, it's not because of short-term rentals and is instead because of a failure of government to get rental-specific housing built.

The hearing will look into 32 issues including questions around zoning, justifications for the primary residence restriction, economic impacts of the by-laws, effects on housing supply, as well as potential amendments to the rental by-laws.

The rules are designed to limit the impact of short-term rentals on the availability of longer-term rental stock as major cities face tight rental markets.

While restricting short-term rentals to primary residences, the rules allow an entire home to be rented out when an owner or long-term tenant is away, up to 180 nights per year.

Vancouver brought in rules last year requiring short-term renters to get a business licence and restricts rentals to a primary residence.

Focus on short-term rentals has increased as the market has grown significantly. Statistics Canada found that short-term rental revenue increased by almost 10 times between 2015 and 2018 to $2.8 billion. It found revenue in Ontario from short-term rentals climbed from $94 million in 2015 to $909 million last year.

A City of Toronto report found that in April 2017 there were an estimated 20,000 short-term listings over 16 websites, though it noted there were likely duplications. The report said Airbnb alone rented out 988,378 nights in the city in 2016.

The hearing in Toronto is scheduled to run seven days but could be extended.

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