A Major Win for Toronto Hotels: Toronto City Council Passes New Short-Term Rental By-Laws
On December 7, 2017 Toronto City Council passed new by-laws to regulate the short-term accommodation rental industry, allowing rentals only in principal residences. Secondary suites will not be permitted. This means that the commercial side of Airbnb’s hosts, running multiple suites and homes will no longer be allowed to operate.
“The new by-laws are a significant step forward for Toronto and sets a framework for other municipalities to follow,” said Terry Mundell, President & CEO of the Greater Toronto Hotel Association. “Limiting short-term rentals to principal residences with the enforcement mechanisms will eliminate the commercialization of the home sharing economy, a major win for the Toronto’s hotel industry.”
All short-term rental operators must now register and become licensed with the City of Toronto on an annual basis in order to rent or advertise in any Airbnb or similar short-term rental platform. Operators are also required to post the registration number on any advertisement, invoice or contract related to the short-term rental. Furthermore, a cap of 180 nights per calendar year will apply to all short-term accommodation rentals.
Platforms, such as Airbnb will be licensed by the city and held to strict enforcement regimes with fines up to $100,000 for non-compliance. The platform will be responsible for removing shortterm rental listings that do not comply with the new rules. The new by-laws will come into effect June 1, 2018.
Toronto City Council will be considering the level of taxation that will be applied to the home sharing economy at Toronto’s Executive Committee and City Council Meeting on January of 2018.
The Greater Toronto Hotel Association (GTHA) together with the Ontario Restaurant Hotel & Motel Association’s (ORHMA) have actively participated in the consultation process with the City of Toronto on short-term accommodation rentals and will continue to advocate on behalf of our members on this important issue.
For more information, please refer to the City of Toronto’s Licensing and Registration Regulations for Short-Term Rentals.
City of Toronto Proposes New Rules RE: Short Term Rentals
The GTHA with ORHMA (Ontario Restaurant Hotel and Motel Association) have worked diligently with the City of Toronto towards a regulatory framework for short term rentals and related platforms. Last week the City released two reports on short-term rental regulations as part of the agendas for the Planning and Growth Management Committee meeting and Licensing and Standards Committee meeting.
The proposed regulations call for:
Creation of a new zoning category for short-term rentals as well as a central registry for anyone who is making their residence available on the short term rental market. If approved by City Council, this would meant that anyone who wants to list their whole home or part of it on a website like AIRBNB they would have to register with the city and pay an annual fee of $50.00.
Operators who can be owner or tenants, would also have to provide 24-hour contact information to anyone renting the property, as well as a diagram with information about emergency exits.
Cap the number of nights in a calendar year in which a full unit can be rented at 180.
Restrict owners from renting out any other property other than their principal residence.
AIRBNB sites would have to register with the city – a licensing fee of $1.00 per night booked on their platform.
AIRBNB type sites would also be required to pay a one time application fee of $5,000.00
Licensed short- term rental companies would be required to keep records of every listing & provide to MLS.
The regulations will be debated by the licensing and standards committee this week and they will then go to City of Toronto Council for final approval in December.
The reports can be found here:
Licensing and Standards Committee: November 16, 2017, Committee Room 1, City Hall, 9:30am
These reports are two of three reports on short-term rental regulations being considered by City Council. The report to Planning and Growth Management Committee recommends zoning changes to permit short-term rentals in principal residences across the city. The report to Licensing and Standards Committee recommends a registration and licensing program for short-term rental activity in Toronto. The third report, which is expected at November 29, 2017, Executive Committee meeting, discusses a potential short-term rental tax.
The GTA must level the playing field for all hotels with the illegal hotel rooms industry. These businesses are currently not paying municipal commercial property taxes, licensing fees and meeting other rules and regulations that hotels are required to meet. Based on our preliminary analysis the illegal hotels rooms industry represents about $60M in room revenue and about 8% of the hotel room supply.
The vast majority of the illegal hotel room inventory across the GTA is concentrated in apartments, lofts and condominiums in the City of Toronto. The GTHA recommends that the City of Toronto and other municipalities take action to provide a level playing field for business and assess commercial property tax to the private hotel room industry.
In October 2016, the City of Toronto Executive Committee directed the “Executive Director, Municipal Licensing and Standards and the Chief Planner and Executive Director, City Planning to report no later than the end of the second quarter of 2017 with proposed regulations for short-term rentals.”
The GTHA continues to represent our members on this issue.
GTHA President & CEO speaks to illegal hotel rooms on The Agenda | TVOJanuary, 23 2017: GTHA President & CEO Terry Mundell participated in a discussion on The Agenda on TVO focusing on the challenges of the sharing economy and illegal hotels rooms. Watch the discussion here.
The GTHA continues to represent our members on this issue.