Thu., March 10, 2022
Toronto has ramped up the enforcement of its year-old short-term rental licensing rules, says the head of the city’s Municipal Licensing and Standards (MLS) department.
MLS executive director Carleton Grant says enforcement officers are conducting random and complaint-based inspections of some properties as registrations of short-term rentals come up for renewal.
The registration system, requiring short-term rental landlords to sign up for a city licence, took effect Jan. 1, 2021, but Grant said Toronto bylaw officers were tied up much of last year with enforcing COVID-19 regulations.
“Originally the enforcement was a lot about education and telling people about the bylaws and investigating. We did some (media) campaigns and then last year, we started to move toward working with auditors and data discovery techniques — looking at websites and where operators were posting their listings,” he said.
When those audits show a lot of listings for basement apartment rentals, for example, enforcement officers target those for inspections, he said.
Under the bylaw, homeowners cannot rent out basement apartments or secondary suites on a short-term basis if they are self-contained units with a kitchen and bathroom. Only a full-time tenant — the principal resident of that suite — can advertise it as a short-term rental.
Grant said the short-term rental bylaw was designed to make sure tourist accommodation isn’t displacing affordable rental homes.
“We wanted people to rent that basement apartment or that secondary suite in your backyard as rental housing for 12 months for someone who needed it,” he said.
Only two short-term rental charges have been filed with courts so far this year, both for operating without a city licence.
Last year there were 105 charges related to the short-term rental bylaw. Fourteen were for companies or homeowners operating short-term rentals without a licence. Airbnb and Bookings.com are the only two licensed short-term rental platforms in Toronto.
This year’s stepped-up enforcement comes as MLS was publicly criticized this week by a Toronto lawyer. Writing in online publication BlogTO, Marc Goldgrub of Green Economy Law Professional Corporation accused MLS of an “absurd and ridiculous” interpretation of the short-term rental bylaw as it applies to property owners running ghost hotels through third-party managers.
Ghost hotels are houses and condos that are operated exclusively as short-term rentals with no principal resident living there, something the bylaw requires.
He complained to the city last spring about its failure to charge the owner of a downtown house that neighbours said was being used for parties. Although charges were laid and the short-term rental’s licence revoked, the house’s owner was not charged.
That’s because MLS pursues charges against the short-term rental operator, according to Grant. That can be a tenant or a third-party such as a property manager. MLS ideally wants to deal with the party that is registered in the city’s short-term rental system because its main interest is ensuring compliance with the bylaw, he said.
But Goldgrub said many property owners hire others to manage their property.
He says the bylaw “does not say only a (short-term rental) operator can be charged.”
“If a property owner is clearly contracting someone to engage in an illegal activity — for example short-term rentals where the person offering the rental does not live in the property, nor does the owner — then they should be held liable for facilitating that illegal activity,” he said.
“The city should be charging ghost hotel owners if they are simply contracting out management. At the end of the day they’re the ones who are essentially facilitating the short-term rentals,” he said.
Grant said that, when the bylaw was being developed, Toronto City Council discussed making owners of tenanted properties responsible for short-term rentals. But it decided against that in order to accord tenants the right to act as legal short-term rental landlords in their own homes.
City Councillor Paula Fletcher, who sits on the Planning and Housing Committee, said she wants to be sure that short-term rental operators won’t be changing their business model and hiring third parties to avoid responsibility for what goes on at their properties.
If it’s true that owners can avoid being charged by handing short-term rental operations to others, “it’s not a loophole, it’s a sinkhole,” she said — one that would be extremely unfair for the licensed short-term rental operators who follow the rules.
Grant said the city’s 2022 budget allows for the hiring of another supervisor and seven new enforcement officers bulking up the existing complement of three.
There are about 4,500 licensed short-term rentals in Toronto, compared to 15,000 that were advertised before the pandemic. Some have disappeared due to the lack of travel in the last two years.
A report to the city’s housing committee last year said that 42 per cent of commercial short-term rentals — properties where there is no permanent resident — returned to the long-term rental market once the city’s bylaw took effect.
Thorben Wieditz of Fairbnb, a coalition that pushed for the bylaw regulating short-term rentals, said he still fears there are rentals operating without the city’s required registration.
“We think there are still a lot of listings online without a permit, and those listings are likely going to be all listings that are offered for 28 days or more,” he said.
The bylaw says short-term rentals can be rented for no more than 28 consecutive days.