As the rental housing shortage in Toronto continues to be a problem, the city has been working to find solutions. Short term rentals such as Airbnb have been cited as one of the reasons behind tight supply; some owners and tenants with spare rooms are choosing to rent their properties out through these services instead of renting out long-term to those who actually live in the city.
Related Read: 5 Tips to Get Ahead in Toronto’s Rental Market
Why More Landlords Are Opting for Airbnb
The hotel-like profits of short term pricing make it more appealing to owners than the standard rental agreement – and with tourism in the city reaching a peak due to the appealing exchange rate and the city’s growing international reputation – these kinds of listings have been rising exponentially within Toronto condo stock.
The city has moved forward with new regulations aimed at curbing this issue, the first being the “one host, one home” rule, meaning owners can only list their property on these sites if it is their primary residence. It allows for up to three rooms or an entire home to be listed as long as the owner is living there permanently. This is alleged to wipe out as many as 3,200 listings on Airbnb—but the city’s report notes that it still leaves more than 7,600 properties available.
What Counts as a Short-Term Rental?
A short-term rental is defined as any stay shorter than 28 days. Other major cities including New York, San Francisco and Vancouver already have these kinds of regulations in place, so it is no surprise to see Toronto follow suit.
Property owners or renters listing short-term rentals will now also have to register with the city, pay a yearly fee, and a tourist tax at a rate that has not yet been determined. They are also required to provide emergency and safety information to all guests.
New Rules Allow for Airbnb Basement Suites
Short-term rentals in secondary suites such as basement units are also being permitted, but Fairbnb – a coalition started by the hotel workers’ union – feels this rule should be reconsidered as basement apartments are one of the only affordable options for Toronto housing left, and therefore shouldn’t be taken off the long-term market. They also feel that enforcement of these rules is key, and that self-declaration is not enough. Owners should have to provide proof of the unit being their principal residence, and there should be significant fines for illegal listings.
Related Read: How to Handle Taxes When Renting Out Your Basement Income Suite
In a 15-year period, Toronto’s population grew by almost 10 per cent, yet its available rental units did not increase by anywhere near that amount within that time frame.
