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Toronto introduces new rules for AirBnB, other short-term rental platforms

Last Updated Aug 25, 2020 at 8:23 pm EDT

Summary

Beginning Sept. 10, short-term rental operators will need to start registering with the city in order to operate


People won't be allowed to list their properties on short-term rental sites if it isn't their principal residence


Advocates hope the new rules will eliminate "ghost hotels" and open up more long-term rental housing in the city


The City of Toronto introduced new rules for the short-term rental market and its operators on Tuesday.

“Beginning Sept. 10, 2020, short-term rental operators will need to start registering with the City in order to operate in Toronto,” the city said in a release on Tuesday. “Registration is a necessary first step to allow the city to effectively administer the new rules applicable to short-term rentals.”

Requiring short-term rental landlords to register is part of a package of new regulations that will oversee short-term rental platforms like AirBnB, Booking.com and Expedia among others, the city said.

Notably among the new rules is that people won’t be able to list their properties on short-term rental sites if it isn’t their principal residence, the city says. This means so-called “ghost hotels” — where the landlord owns multiple units and doesn’t actually live at the address listed on the site — will likely disappear from Toronto, says Thorben Wieditz of housing advocacy group FairBnB.

“it will be enormously helpful because what this registration process does is that it weeds out all of the commercial operators that have over the last couple of years systematically eroded Toronto’s housing market and turned housing into ghost hotels,” he said. “In about half a year, we should know exactly which AirBnB hosts are actually legitimate.”

Other regulations introduced today include the following:

  • Short term rental operators will have to display their registration number on all advertisements and listings
  • Registered short-term rental operators will be required to collect a four per cent Municipal Accommodation Tax
  • Short term rental companies — such as AirBnB and Expedia — will be required to obtain a licence to do business in the city

 

Toronto’s new regulations come at a time when the short-term rental industry has been under pressure to deal with violence on properties listed on their platforms.

In August 2019, a person was shot at a Bridlepath mansion reportedly being used to host a house party. Then this past February, three people were shot dead at a downtown condo building. This incident, along with a deadly shooting in California forced AirBnB to eventually move to ban “all parties and events at Airbnb listings.” 

The industry has also faced other pressures — namely from the coronavirus pandemic. The provincial government banned almost all short-term rentals during the spring and part of the summer. However, the ban was eventually lifted in June.

Faced with little income to pay the mortgages on those properties during that time, many short-term rental owners have been forced to lease-out their homes or condo units to long-term tenants.

“You’re hearing this kind of across the board. A lot of people are moving into units that are semi-furnished and looked like they were ready to go as an AirBnB,” said Geordie Dent, executive director of the Federation of Metro Tenants’ Associations.

Real estate experts have also noted that many of these short-term rental units are now for sale.

A complete break-down of the new rules, including registration deadlines and other information, can be found on the city’s website.

 

With files from The Canadian Press