Toronto must regulate Airbnb before it snaps up more rental housing, group warns

Blow up your idea of what Airbnb is.

That's the message Fairbnb, which represents everyone from housing advocates to condo owners to hospitality workers, is sending to city councillors and everyone else in the city.

The group says it supports people being able to profit from sharing a room in their home, but Airbnb is increasingly allowing commercial companies to "cannibalize" the rental market by snapping up multiple properties to offer up a few days at a time.

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Fairbnb's Thorben Wieditz said Toronto just can't afford that at a time when renters are grappling with condo rental vacancy rates of just one per cent, while also fearing potentially massive rent hikes.

"Housing markets are being undermined by Airbnb," he told reporters at city hall, listing other major cities struggling with the same issue.

"There are thousands of units being taken off the market to cater to tourists."

The group's new report, Squeezed out: Airbnb's commercialization of home-sharing in Toronto, released last Friday, includes several recommendations for city council, including:

• Maintaining a list of condo buildings that prohibit short-term rentals.
• Drafting zoning bylaws around short-term rentals.
• Creating a permit system with rules that restrict Airbnb hosts so they can only have one listing, while making them prove that they live at that address and that the listing is approved by their condo board.

Advocates with Fairbnb say their goal is to return units intended for long-term rental to that realm by cutting out commercial tenants running what they call "ghost hotels" — think of a hotel-style suite run from a building designed to be residential, and taxed that way.

Those rentals make more money, Fairbnb says, because they are neither taxed nor regulated the way hotels are. 

Airbnb says its open to regulations

If approved, the group says it believes the changes would cut Airbnb's revenues in half, but also return the multi-billion dollar company to its home-sharing roots.

In a statement, a spokesperson for San Francisco-based Airbnb said more than 80 per cent of its Toronto hosts only share their primary residence a few nights each month to supplement their income.

Airbnb's Christopher Nulty also indicated, as the company has done in the past, that it's open to working with the city.

"We have always advocated for fair, sensible regulations that balance the concerns of housing affordability with the right of everyday people to share their homes," he said in the statement.

Nulty also took aim at the numbers used in the Fairbnb report, calling it "unreliable data."

Earlier this year, Airbnb said it has some 8,600 hosts in the city and found the visitors who used the service spent some $417 million here in 2016.

Most guests stayed for about four days, the report said. However, the company's own guest survey found just 2.3 per cent of respondents said they wouldn't have visited Toronto if Airbnb wasn't available.

City still waiting for province's decision on hotel tax

City council has announced plans to consider rule changes around the short-term rental market, which is dominated by Airbnb but also includes several other competitors.

Toronto has already asked the province for permission to impose a hotel and short-term accommodation tax that would see hotels pay four per cent, while short-term rentals would pay up to 10 per cent.

Mayor John Tory's office, which was stung by the premier's rejection of road tolls earlier this year, said it hasn't heard anything about when the province might decide about the hotel tax's fate.

The city budget banks on making around $5 million from the new tax, which could be implemented by the end of this year. Officials say there will be several months of consultation and tax design work before it can start collecting money.

Wieditz of Fairbnb said he thinks the city is off to the right start and has the right information to come up with good policy. He hopes the city will "not be shy about going forward with a strict set of regulations that actually have teeth."

Public consultations on this matter are set to begin soon.