Victory for Regulations on Short-term Rentals

In a city grappling with a housing crisis, last month’s ruling to uphold the City Council approved regulations on short-term rentals was an important victory.

For years we argued that ghost hotels were harming rental housing supply and affordability. In his decision, the adjudicator agreed: “One fact is indisputable: each dedicated short-term rental unit displaces one permanent household. That household must find another place to live”

In order to address the loss of these rental units, in early 2018 City Council approved regulations for short-term rentals in Toronto. Among other components, the new rules, which permit short-term rentals in a principal residence only, require short-term rental companies to obtain a licence and short-term rental operators to register with the City and pay a Municipal Accommodation Tax (MAT) of 4 per cent, were set to come into effect on June 1, 2018. However, the City’s zoning bylaw amendments to permit short-term rentals as a use were appealed to the Local Planning Appeal Tribunal (LPAT) by landlords who operate short-term rentals through platforms such as Airbnb.

On November 18, 2019 the LPAT issued a ruling that dismissed the appeals and upheld City Council's adopted zoning bylaw amendments for short-term rentals, and the short-term rental zoning bylaw amendments are now in force. The amendments permit short-term rentals, (any rental that is less than 28 consecutive days), across the city in principal residences only. Within their principal residence, people can rent up to three rooms or their entire home.

With this decision, the Licensing and Registration Of Short-Term Rentals Bylaw has come into force. The City is moving forward with the implementation of the bylaw, as adopted by City Council. Once the licence and registration system is built, short-term rental companies will be required to obtain a licence and operators will be required to register with the City and pay the MAT of 4 per cent.

City staff are engaging stakeholders and partner Divisions to advise and educate on the implementation details. We will continue to share more about implementation, timelines, and how the licensing, registration, and the MAT will work.

This decision at the LPAT is a tremendous victory for the City of Toronto and our efforts to regulate short-term rentals, while at the same time protecting our much needed rental housing supply. Now, it’s time for AirBnb and the various platforms to finally comply with the law.

For more information on the new regulations, click here.