Airbnb regulations tightening up across Canada

by Clayton Jarvis06 Feb 2020

On January 31, three guests were killed at a Toronto condo being rented out as an Airbnb. The apparent murder-suicide was the second Airbnb-hosted killing in Ontario in 2020, following the January 7 shooting of an 18-year old male in Ottawa.

Such deaths are uncommon in the world of short-term rentals, but the recent violence has only served to intensify calls from hotel associations, housing advocates and municipal governments to further regulate Airbnb and its competitors.

Most communities view short-term rentals as a necessary component (or necessary evil) of their housing markets and tourism industries. Homeowners with onerous mortgages, not to mention tenants with high rents, have come to depend on the income generated by nightly rentals to meet their monthly obligations. With international tourism at record levels, the demand for accommodations in major tourist destinations regularly outstrips the supply of available hotel, motel and traditional bed and breakfast rooms. Short-term rentals fill in the gaps and allow visitors to keep pumping money into local economies.

Aware that outlawing short-term rentals, despite the immense pressure doing so would remove from a rental market like Toronto’s, is currently out of the question, a number of cities are attempting to do the next best thing: instituting new bylaws and regulations most short-term investors should be able to swallow.

Here are three cities where Airbnb-ers will need to make changes in 2020:

Calgary
As of February 1, Airbnb or other short-term rental services are now required to obtain a business license or face a $1,000 penalty for repeated violations in Calgary. Licences for properties with four bedrooms or less cost $100; those for larger properties cost $276, which includes the cost of a fire inspection.

An additional measure may cause some investors a little pain. Hosts in Calgary can no longer book overlapping stays. The owner of a property with three bedrooms, for example, can rent all three as a single booking, but they cannot be rented out to separate parties simultaneously.

Alberta plans to introduce a tourism levy on short-term rentals in the province as part of its 2020 budget.

Saskatoon
The short-term rental situation remains fluid in Saskatoon, where a rapidly increasing Airbnb scene means most properties are operating outside of zoning and licensing regulations. City councillors are scrambling for a new regulatory framework.

The city has parsed short-term rentals into two categories: homestays, where rooms are rented out in an owner’s principle residence; and short-term rentals, those operated in other properties. Beyond the definitions, little has been decided. Three proposed sets of rules are currently up for debate:

  • Option 1: Homestays are allowed in all zoning districts, with operators requiring a commercial business licence. Short-term rentals are prohibited.
  • Option 2: Homestays are allowed in all zoning districts. Short-term rentals are permitted in all zoning districts but require discretionary approval in low and medium density residential districts. In both cases, hosts require a commercial business licence.
  • Option 3: Homestays are legal in all zoning districts and no commercial business licence is required unless the number of guests increases, in which case the operator will need to purchase a $125 licence. The short-term rental guidelines are the same as in Option 2.

Saskatoon is proposing a limit of six guests per property and requiring two on-site parking spaces, one for principle use and one for guests. Condo owners will need to receive written permission to run a short-term rental operation from their condo corporation. Permission must also be granted by the property owner if the short-term renal operator is hosting in a property they don’t themselves own.

Oakville
Oakville passed regulations in March 2018 limiting short-term rentals to a landlord’s principal residence. The city is in the process of delivering letters to hosts apprising them of an annual $237 dollar license fee. It is also informing online rental operators of a $44,500 charge to cover the city’s enforcement costs. (Short-term rental platforms have been charged a $5,000 fee in nearby Toronto, in addition to an ongoing charge of $1 per nightly booking.) Airbnb has yet to pay, but continues to advertise rentals in Oakville, rendering its operation there technically illegal.

The next area to be hit by new Airbnb regulations will be Toronto. After lengthy challenges to the city’s short-term rental bylaws, new guidelines are scheduled to be put in place this spring. Individual operators will need to register with the city and will be required to pay a quarterly four percent Municipal Accommodation Tax.

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