Just a few weeks after my post “AirBNB Hosts Beware” published on April 21, 2017, more action has been announced to address the AirBnB situation.
Devout Torontonians who consider Toronto their home first and investment second have been putting pressure on politicians across the city. From condominium dwellers to community neighbourhoods, residents have had enough. They have accused investors of snapping up multiple properties and running them like “ghost hotels”.
Through services, such as AirBnB, these “ghost hotels” create a double whammy. Firstly, they bring tourists and individuals that are strangers into the neighbourhood with no regulation or preparedness in case of unexpected incidences or emergencies, possibly leading to devaluation of condo units in the building or homes in the neighbourhood. At the same time, they use greater utilities and infrastructure, from which the city receives no additional revenue, and therefore, average owners have to pay more of the share for.
Licensing and Standards Proposals
The City of Toronto’s municipal licensing and standards division released a series of proposals today, after months of consultation. Among the recommendations are:
- Licensing companies like Airbnb and others.
- Banning people from listing units where they don’t live.
- Amending zoning bylaws to create a separate category called “short-term rental.”
- Starting a registry of anyone operating a short-term rental unit.
AirBnb has argued that it provides a valuable service which allows homeowners to earn a little extra income to make mortgage payments. Over the last year, there have been many, many articles about tenants who have rented multiple homes or units and then sublet them through AirBnB. These individuals are not grannies or struggling families, but rather opportunistic entrepreneurs looking to make a profit at the expense of unknowing homeowners or landlords.
More To Consider
The reaction to AirBnB is far from over. We have yet to hear from neighbours claiming loss of property values, response by police for crimes resulting from AirBnB guests, and insurance companies refusing to pay claims because properties were used other than their original intention. Then there are other issues like bed bugs, fire deaths, and crimes commitment by guests on owners and other guests. How do the police deal with that?
I will not be surprised to see more rules and regulations coming. Furthermore, I will not be surprised if extra taxes or tax rates are passed to deal with the AirBnB situation.
Originally published by Baldo Minaudo on BaldoMinaudo.com, Baldo Minaudo, M.B.A. is a Real Estate Broker located out of Toronto serving local and international clients. He may be reached through is office 416-698-2090 or through his website.