Short-term Rentals – New regulations in Toronto
An industry that was small and out of radar in the last decade is suddenly making waves, forcing Government & Regulatory bodies across the world to take action. Popularity of short-term rentals (STR) platforms such as Airbnb, have increased in the last 5 years, as more travelers choose to stay in “homes” vs. hotels and the overall benchmark of “trust” increases. Seeing the opportunity, home owners and renters have started to share part of their homes, entire homes and in some case buying properties only for short-term rental.
This has had an adverse effect on housing in some of the big cities. Long-term renters have complained of eviction so that the landlords can make more money by hosting short-term renters. Housing rents have gone up. Quiet residential neighbourhoods have been converted into revolving hotels with frequent tourists.
Here is a list of some of the big cities that have imposed strict regulations on Short-term rentals*:
|USA||New York, San Francisco, Santa Monica, New Orleans, LA, Anaheim,|
|Canada||Toronto, Vancouver, Montreal|
|Germany||Berlin, Hamburg, Munich|
While many other cities are looking into regulating, there are a few that see the opportunity to bring more tourists, and earn taxes. Here are a few examples:
|USA||San Diego, Portland, Cleveland, Dallas, Seattle|
So what does all this mean for Toronto? As we all know, and probably experienced at some point of time in our lives; finding a place is Toronto is a costly affair. In December 2017, the City Councillors voted for strict regulations on short-term rentals to promote affordable housing and higher availability of units for long-term rentals.
Below is a brief summary of the rules. This post will be updated once the final guidelines are released:
- Stays less than 28 days are considered as short-term stays.
- Home owners and renters are only allowed to rent their primary residence for short-term rentals. If you are sharing part of your home, then you can share up to 3 rooms for the entire year. If you are sharing the entire residence, then you can only rent it for a maximum of 180 nights in a year.
- Secondary suites such as basement apartments or “granny” homes cannot be offered for short-term rentals.
- All hosts need to register with the City of Toronto. The process will be online and cost $50. The registration/licence number has to be published on your listing across various platforms.
- One address can have only one registration number
- All hosts, who wish to conduct short-term rentals, must comply with the new rules by June 1st 2018
- Corporations do not have a primary residence, so they aren’t allowed to register for short-term rental.
- Online platforms such as Airbnb would have to pay a licence fee of $5,000 and a $1 per night tax for each booking.
- City of Toronto and technology platforms will work together to enforce the new guidelines.