Thursday, February 16, 2017

$10,000 Fine for Toronto Homeowner for Use of Airbnb to Attract Short Term Rental Tenants

Will a large fine such as this put an end to short-term rentals, as some people might hope? This is not a simple issue with a "one size fits all" solution. Read the Toronto Star article here.

Concepts such as Airbnb, Uber and other sharing economies are, of themselves, a necessary and welcome part of the overall business environment and should not be shunted aside simply because they do not work for everyone. They are extensions of existing businesses that the public already uses -- hotels and other forms of short-term accommodation, for example. When we travel to a city or country for a holiday or on business, we do have to find a place to stay for the duration of our visit. Some people prefer to stay in well-known luxury hotels or resorts where their every whim is catered. Some look for lower-priced hotels or motels to suit their budgets and time constraints. Others prefer the bed-and-breakfast scenario, where they can obtain accommodation in (usually) a house with the feel of being at home yet having someone else do the cooking and cleaning. And since the owners of a bed-and-breakfast establishment usually live on the premises, and there may be visitors in other rooms, it does become a sharing experience over breakfast and in the common areas. Visitors are encourage to meet and mingle in the evenings as well. So how does this compare to short-term rentals such as Airbnb?

The majority of Airbnbs or STRs are in private homes where the owner may dedicate one or more bedrooms or floors (basement, upper floor or loft space) to rental accommodation while sharing the kitchen and living room with visitors and welcoming them to watch television or share in other activities. Some offer breakfast and tourist information as well, echoing traditional bed-and-breakfast establishments. They may differ in that some STRs have only one room to rent out at a time. Some STR/Airbnb owners may offer a complete house for rent, offering privacy to the visitor. This goes back to the roots of online home-sharing where two people trade homes for a specific amount of time to enjoy a vacation in another city or country. Usually there was no money exchanged, just keys and the assurance that the visiting party would take care of the house or apartment  while there, would clean up before leaving, and would leave the place in the same state they found it. There was a mutual respect, treating the home as you wanted the other person to treat yours.This evolved over the years into what it has become today.

One benefit to short-term rentals such as Airbnb is that many of them may be pet-friendly, which the majority of hotels are not. For travellers who wish to bring Fido along, this is extremely attractive. STRs are, generally, less expensive than hotels, making them attractive to a wide variety of guests. Most also require a minimum of two or three nights per booking. However, some offer single night options, while some define "short-term" as four to seven days -- even up to a month.

Problems arise when an owner -- or owners -- take advantage of the situation and become hands-off absentee landlords of more than one property. Even one home without oversight or monitoring can lead to problems and concerns from neighbours. Where, and to whom, can complaints be filed? Is it the responsibility of the municipality, the police or Airbnb itself? Who has the authority to deal with the owner of the STR? A look at the Airbnb website provides information on the company's policies. It seems that the company would welcome feedback in the form of complaints re noise or other abuses. The reputation of the "brand" should be of utmost importance to its founders.

Is the ownership of one STR considered a business that must be licensed and pay appropriate fees and taxes to the municipality? If the owner lives in the house and rents one or more rooms, is that considered a business? Where does one draw the line, and how can STRs be accommodated within the City without causing upheaval for residents or for the City?

A $10,000 fine may be appropriate for an absentee landlord renting out a complete home without supervision or monitoring, or for one who owns multiple properties. However, what would be the effect if a similar fine were applied across the board? Would it cause individuals to rethink the idea of renting out a room on Airbnb, Expedia or any other STR site? Average homeowners who might consider hosting an STR might be looking at this as a means of supplementing income to help pay mortgage or property taxes. Is this any different than deciding to turn a basement into an accessory apartment to rent out? And whose business is it anyway if a homeowner wants to do this -- neighbours, the municipality?

STRs, exemplified by Airbnb, are not for everyone, whether a host or guest. Not everyone wants to share their home with strangers as guests, and not everyone feels comfortable spending the night in the home of a stranger as host. As with any and all sharing economies, a person's comfort level will determine how deeply to get involved. That same comfort level will determine how a person will react to having an STR in the neighbourhood or even next door.

Whether it is done or not, it seems that a first step before joining Airbnb or any other group as a host would be to talk with neighbours to guage reaction and determine whether or no they are in agreement with this decision of they will oppose it. It would also pay to talk with the Board of the ratepayer association representing the neighbourhood community. Find out about parking regulations, local by-laws, etc. which might influence the decision to become a host.

However, STRs have filled a niche in the accommodation market, one which many people feel is necessary. Have they taken away homes that could have been affordable long-term rentals? Yes. Do they provide an immediate solution for someone moving to a city such as Mississauga but without sufficient information or knowledge about the city to decide where they would like to live -- and at an affordable investment? Yes again.

This issue of short-term rentals is not going away any time soon. It needs -- and deserves -- clear heads and calm minds and a great deal of discussion and deliberation. That discussion needs to start at the neighbourhood level -- which means that neighbours should begin by getting to know each other (if they don't already) and having frank conversations amongst themselves and with their ratepayer/resident association about issues such as this. Then the discussions can progress to the next levels involving neighbouring ratepayer associations within the Community, within the Ward, and within the City.

We have groups and connections in each of these levels. Many of them are studying this very issue. There have been deputations and discussions at Mississauga City Council as well. The more input we -- and they -- have, the closer we can come to a resolution..

Please have your say by commenting below. We are eager to hear your point of view now. What would you think about having an STR on your street or next door to you? Can we have this discussion?