Toronto officially slaps new rules on Airbnb rentals

By: Jessica Mach on December 8, 2017

The City of Toronto crafted a new bylaw Thursday that is expected to reshape the city’s short-term rental economy.

The decision follows a Nov. 16 meeting where the city’s Licensing and Standards Committee began considering proposed regulations for short-term rental networks like Airbnb.

The approved regulations include allowing only principal residences — e.g., homes that have the same tenants living in them most of the year — to be run as short-term rentals for no more than 180 days a year. In effect, the city is banning homes from existing primarily for the purpose of being rented out on a short-term basis, or functioning like hotels or hostels.

Landlords and long-term tenants will only be allowed to share up to three bedrooms in their home at a time, or rent out their entire residence.

Short-term rental operators will also be required to register their businesses with the city and pay an annual fee of $50. Rental platform companies like Airbnb will need to register with an initial application fee of $5,000, and pay a subsequent annual fee of $1 per night booked through its platform.

The approved rules are not too far off from what was proposed in November. Notable departures include no word of a fine if short-term rental operators fail to follow the regulations; the initial proposal had included a fine of up to $100,000.

Another change is the date for the rules coming into effect. Whereas the proposal had set a date for June 1, the approved regulations will come into effect a month later, on July 1.

Toronto follows in the footsteps of Vancouver, which approved similar regulations for short-term rental networks on Nov. 15. In the past year, the two cities have adopted several policies to regulate their bloated housing markets, both of which have very low vacancy rates. The challenge of finding decent and affordable housing in Toronto has resulted in both precarious situations for renters, as well as increased opportunities for them to be scammed.

Many have argued that regulations on short-term rental networks could help open up more of the city’s housing for long-term rentals.

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