Toronto says goodbye to 'ghost hotels' with new Airbnb rules

(Getty Images)

Toronto finally has the green light to tighten rules for Airbnb hosts, which the city hopes will help solve its rental problems while cracking down on party houses.

The city passed regulations for short-term rentals in December 2017, but a group of hosts challenged the decision at the Local Planning Appeal Tribunal (LPAT). The LPAT rejected the bid on Monday.

The new rules mean people can only use their primary residences for short-term rentals — less than 28 days. Hosts can rent out the entire home or up to three bedrooms. 

An entire home can only be listed on the site if the owner or tenant is away, for a maximum of 180 nights a year. 

LPAT estimates the new rules will put 5,000 units back into Toronto’s rental market, which would help push up the city’s 1.1 per cent vacancy rate.

Toronto Mayor John Tory called the decision good news for residents.

“When we approved these regulations in 2017, we strived to strike a balance between letting people earn some extra income through Airbnb and others, but we also wanted to ensure that this did not have the effect of withdrawing potential units from the rental market,” he said in a statement.

“I have always believed our policy achieves the right balance, which in this case falls more on the side of availability of affordable rental housing and the maintenance of reasonable peace and quiet in Toronto neighbourhoods and buildings.”

Airbnb disagrees and calls the regulations unfair.

“While this ruling provides regulatory certainty for home sharing in Toronto, we continue to share our hosts’ concerns that these rules unfairly punish some responsible short-term rental hosts who are contributing to the local economy,” said Alex Dagg, Airbnb Canada’s public policy manager, in a statement.

“We remain committed to working closely with the City of Toronto and the Airbnb community as these new rules are implemented. We encourage other platforms to also come to the table and support responsible home sharing in Toronto.”

The regulations include some added costs for hosts. They will now have to register with the city and pay a $50 one-time fee, as well as a four per cent Municipal Accommodation Tax (MAT) on all rentals that are less than 28 consecutive days.

There is a 15-day period for an appeal. A timeline for when the new rules take effect, as well as penalties and enforcement, have not been announced.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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