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City Of Toronto Wins Short-Term Rental Appeal

On June 25, 2020 a court judge dismissed an appeal made by short-term landlords on a previous provincial tribunal decision siding with the city’s regulations. The City’s bylaw amendment that restricts short-term rentals was to come into force back in June of 2018 but was delayed by an appeal by landlords to the Local Appeal Planning Tribunal (LPAT).

In addition to limiting operations to a principal residence, the regulations also include the requirement for owners to obtain a licence, register with the City, and pay a 4% accommodation tax. The City of Toronto is now moving forward with the implementation of the bylaw, as adopted by City Council and is planning to implement the regulations for short-term rentals in phases.

In 2017 and 2018, the Greater Toronto Hotel Association (GTHA) and the Ontario Restaurant Hotel and Motel Association (ORHMA) have worked with the City of Toronto to ensure a strong regulatory framework for short-term rentals is in place, leveling the playing field with the hotel industry.

Toronto’s Short-Term Rental Rules Upheld By Ontario Tribunal

Joint Statement from the Hotel Association of Canada, the Ontario Restaurant,  Hotel & Motel Association and the Greater Toronto Hotel Association:

Following a lengthy legal process, the Local Planning Appeal Tribunal (LPAT) has ruled in favour of the City of Toronto’s Short-Term Rental Regulations. This is a significant and precedent-setting win for the hotel industry.

The City of Toronto had passed strong and restrictive regulations in December of 2017 following a significant and sustained lobbying effort by the hotel industry and, in particular, the Ontario Restaurant, Hotel & Motel Association and the Greater Toronto Hotel Association. Almost immediately, these regulations were appealed by Airbnb advocates and commercial operators, resulting in a lengthy delay in implementation.

The decision delivered by the LPAT yesterday upholds the original regulations, dismisses the appeals and plants the City firmly onside with hotel, housing and community advocates.

The most significant component of these new regulations is the zoning bylaw that stipulates that short-term rentals can only occur in one’s principal residence. This will effectively shut down the commercial side of Airbnb’s business – those running multiple units or homes. The rules will also apply to other short-term rental platforms.

In addition to limiting operations to a principal residence, the regulations also include the requirement for owners to obtain a licence, register with the City, and pay a 4% accommodation tax.

This decision sets an important precedent as other jurisdictions across Canada work towards regulations in their regions. Later this month, the City of Ottawa will be voting on their proposed regulations which we trust will follow Toronto’s lead.

The Hotel Association of Canada, together with its Provincial and City Hotel Association partners, will continue to drive a national strategy that aligns our efforts and positions the industry to achieve fair rules across the country.

More information will be provided by the City of Toronto in December 2019 regarding implementation and timelines.

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.

RESOURCES:


Vancouver’s actions on illegal hotel rooms.

Interested in what’s happening in the United States around illegal hotel rooms? Visit the American Hotel and Lodging Association website.