and mixed-use commercial-residential zones. Therefore, unhosted Airbnb listings could currently fall under the definition of hotels and, as such, would only be permitted in mixed-use zones.
Considering the lack of regulation, it is no surprise that Toronto has started a process of community consultations on the challenges posed by short-term rentals. A final report with recommendations on possible !changes to zoning by-laws is due in June 2017. At this stage of the process, the City has identified several areas of inquiry. These areas include looking at the impact of short-term rentals on affordable housing availability. neighbourhoods, development and tourism, zoning by-laws, and taxation. In 2016, the City released a Deo:taping an Approach to Regulating Shori-trnn thew //ow oronutralleprocsinunic/20MiesAtguliba, kgroundjile- 9723.Spdf) Rentals report, which outlined some strategies for regulation, including: a licensing system for operators. an update in zoning by-laws, and additional tax requirements.
Rental Availability
The City's report implies that regulation of the short-term rental market is an important part of a larger strategy to address the severe shortage of housing in Toronto. Ironically, however, another pressing provincial initiative may undercut the critical goal of increasing long-term rental vacancy rates. In April of this year, Ontario's government introduced new legislation entitled the Rental Fairness Act, 2017 IhnpV/www.ontla.on.ca/webAulls/hiM_Joaild?lixale-emvIraninetattellillIOn 4755) which amends the current RTA. The new amendments include requirements such as a landlord compensating a tenant one month's rent, or offering them a new unit if the landlord evicts the tenant for the landlord's own use.
Landlord associations are upset with the proposed amendments, which they perceive as further strengthening tenant rights above those of the landlord. A common refrain is that the limits on landlords' autonomy will deter them from continuing to rent out units. As a result, the amendments may lead to landlords seeking out short-term renters to avoid the regulations under the RTA. In other words, while proposed municipal regulations of the short-term rental market are partly developed with the intention of increasing long-term rental unit availability, the concurrent provincial law amendments may lead landlords to move away from long-term and toward short-term renting—driving down the already low vacancy rate of long-term rental units.
The statistics used to justify short-term rental regulation draw only a tenuous link between the use of Airbnb and the multi-faceted problem of housing in 'Toronto. Toronto's move to regulate the Airbnb industry could he construed as an attempt to offload very real housing issues onto private home owners. This is not an adequate solution. The question then becomes whether the move to regulate the use of entities such as Airbnb is truly about long-term rental shortages, property values, broader changes to a community, or generating revenue
Money Talks
Another important motivation for the regulation of the short-term rental industry is Toronto's chronic cash shortfall. Toronto collects property taxes based on the predominant use of a property. I tote's and motels pay :ommercial taxes while bed-and-breakfasts pay residential taxes. Currently. the City of Toronto Act luips://tetor.ontario.iii/lews/tiattaelOne I I, prohibits the City from levying a lodging or hotel tax. In the midst of a revere cash shortfall, the City requested the provincial government to provide it with the authority to implement s hotel tax as a means of raising revenue. This power was granted to the City through amendments in the 2017 Provincial Bucket Ihtm://www.fin,cov.onta/en/budgetiontariobudgets/2017/) which are likely to pass by summer