Putting The AirBnB Debate To Bed – Ward 33 E-Blast December 14th
It’s a fairly short newsletter this week. I want to leave lots of space for Ward 33 Teamer, Katherine, to wrap up our third Participatory Budgeting year with announcements about the winners. As far as PB33 goes, all I have to do is thank Katherine. She took the entire project as her own this year and had a wonderful time working with our amazing Community Steering Committee on Participatory Budgeting and all of the Project Champions. You rock, Katherine!
A week ago, we spent the better part of an entire Council day debating the future of AirBnB and other similar vacation rental services. When the debate was over and a new bylaw had been created, a day and half of misleading news coverage began on radio and TV stations. If you have a basement apartment, you may now be more confused than ever.
This well appointed basement apartment with 2 or 3 bedrooms may pay your monthly mortgage and property tax, depending on its location. This helps Toronto’s housing shortage as much as it helps your family.
Here are the key points of what was actually accomplished:
– It is still legal to list your home as a vacation rental on AirBnB, Canada Stays or VBRO for as many as 180 nights per year. This is good news for snowbirds.
– If you are a renter, with your landlord’s permission, you may also rent out your home for 180 nights a year. This limit is extremely generous. In San Francisco and New Orleans, two of the earliest cities to create short term rental laws, the limit was set at 90 nights. We chose the longer term of 180 nights to accommodate those away for the whole winter, or academics out of town from May to September.
– If you have a basement apartment, or second suite anywhere in your principle residence, under the new bylaw we see that suite as a unit of housing. We want you to rent it out as a long term rental. Your tenant is allowed to short term rent the unit out, with your permission. You may choose to forbid the tenant to do this by including rules in your lease document. You may even choose to permit it, but include terms in your lease that require your tenant to share AirBnB-type revenue with you. The limits are still the same, 180 days.
This issue of second suites was the biggest issue debated. In Ward 33, we have hundreds of these. Many of our houses were purpose built to include them. Here are the numbers that impacted Council’s decision:
1) There are 70,000 known second suites in the city, meaning suites that include a kitchen, bathroom and separate entrance. We need them in the housing market.
2) There are now over 10,000 AirBnB-type listings in Toronto and that number is growing.
3) There is a 0.6% vacancy rate across the city.
Toronto’s vacancy rate is now so low, it extends to every corner of the map. There is no ‘easier’ rental neighbourhood.
Council adopted a bylaw to slow down the migration of the 70,000 secondary suites out of the rental market and into the vacation market. Instead, the bylaw encourages you to have a second suite and earn an average of $12,000/year on it by renting to a full time tenant. We are leaving any part time arrangements to list on AirBnB between you and your full time tenant.
The bylaw’s main purpose is to outlaw speculators buying dozens of random units in your quiet condo building or neighbourhood apartment building and turning them into hotels. In our ward, lots of people now own homes but continue to own the first condo they ever bought. We want them to rent these out to long term tenants, which in today’s market provides enough rent revenue to cover costs, and then some. If you own any unit of housing and are not living in it yourself, it is hugely important in Toronto’s tight housing shortage that your unit is maintained as someone’s home. We all end up paying the social cost if you are evicting tenants to list their homes as hotel accommodations.
There is plenty of money to be made from owning real estate in Toronto. City Council is simply asking that the AirBnB-type market be a part-time pursuit. Everyone needs a place to live, and everyone can make a little money in the home sharing market.