April showers bring may flowers and a possible hit to short-term rental operators in Toronto.
March signifies phase two of the implementation process of the city’s new bylaws regulating short-term rentals. Short-term rental operators now have three months to obtain licenses and register their units before the city starts to crack down on them this summer.
The new bylaws allow someone to rent out their entire principal residence or part of it for less than 28 consecutive days. People who own multiple properties in the city can no longer rent any of them on a short-term basis as they don’t live in them usually.
Some housing and tenant advocates think this will finally get the many vacant units off Airbnb and back onto the rental and housing market where they are much needed.
“We’re in the middle of a housing crisis, we need the units more than we need the fake hotels,” says Geordie Dent of the Federation of Metro Tenants’ Association, referring to “ghost hotels” in which units sit empty until they are rented out for short-term stays, often on Airbnb.
The regulations were finally approved after being appealed by some Toronto landlords to the Local Planning Appeal Tribunal (LPAT) on Nov. 18, 2019 after the regulations were approved by City Council in 2017 and 2018.
“When you’ve got a need for housing units that are being pulled off the market just for people to make short term money it’s bad, it’s helping to destroy the city,” Dent says.
With more than 100,000 households in need of housing in the city, according to Toronto Housing Market Analysis, one advocacy group thinks these bylaws might be an important step to helping affordability and vacancy rates.
“City of Toronto’s approved short-term rental rules could significantly alleviate pressure on the city’s housing markets, helping those of us looking for decent and long-term accommodations find affordable places to live,” says a report released Feb. 20 by Fairbnb, a coalition of homeowners, tenants, hotel workers and housing advocates.
A recent study released by Fairbnb found under the new bylaws there are 8,241 illegal listings on Airbnb that if removed would bring back Toronto’s vacancy rate to a near “healthy rate.”
With a vacancy rate of 1.3 per cent, according to the Canada Mortgage Housing Corporation, Fairbnb’s report says enforcing the short-term rental bylaws could bring the vacancy rate to 2 per cent, closer to a healthy vacancy rate of 3 per cent.
Before these bylaws many property owners were renting vacant units through Airbnb to tourists visiting the city — at a higher price than if rented on a long-term basis.
Sometimes landlords would even illegally evict their long-term tenants in order to rent them on Airbnb, Dent says. Enforcing these regulations could also help protect tenants from illegal evictions.
“Minimum 25,000 illegal evictions happening in Toronto in a year,” says Dent. “And that ruins lives.”
Airbnb has posted a notice on their Help page outlining the city’s bylaws and advising those who have listings on the hosting site that fit the new short-term rental definition to get their license and registration with the city.
The City of Toronto’s website outlines the implantation schedule of these bylaws and names this summer as the enforcement stage. But so far there is no information on how exactly that enforcement will be taken.
LPAT declined an interview or statement on the issue of implementation of the new bylaws.
Dent believes the best way to stop illegal short-term rentals is to follow San Francisco’s footsteps in which in September 2017 hosts could apply to be a short-term renter directly through Airbnb and those that were listing units that didn’t follow the regulations or have a license were removed from the platform.
“Airbnb has just cannibalized housing markets and we’re seeing it all over the world,” Dent says. “Something needs to be done, we’re hopeful that these rules are going to be enforced but if they aren’t being enforced then they might as well not exist.”