Item - 2017.EX26.3

The Executive Committee:

1.  Directed the Chief Planner and Executive Director, City Planning, to prepare amendments to all applicable general zoning bylaws in keeping with the proposed zoning bylaw format outlined in Attachment 1 to the report (June 7, 2017) from the Executive Director, Municipal Licensing and Standards, and the Chief Planner and Executive Director, City Planning, and hold community meetings as required by the Official Plan and a public meeting as required under the Planning Act.

2.  Directed the Executive Director, Municipal Licensing and Standards, to conduct public consultation on the proposed licensing and registration framework outlined in Attachment 2 to the report (June 7, 2017) from the Executive Director, Municipal Licensing and Standards, and the Chief Planner and Executive Director, City Planning.

3.  Directed the Chief Planner and Executive Director, City Planning, to report with final zoning amendments to a statutory meeting of Planning and Growth Management Committee and direct the Executive Director, Municipal Licensing and Standards, to report with the licensing and registration requirements to the Licensing and Standards Committee, in the fourth quarter of 2017.

4.  Directed the Executive Director, Municipal Licensing and Standards, and the Chief Planner and Executive Director, City Planning to consult on and include for City Council consideration in the final report:

a.  recommendations for fines and all other available penalties, including provision for special fines, for all contraventions of the by-law, including but not limited to substantial fines for non-compliance by operators and companies who operate without a licence.

b.  recommendations for requiring proof of principal residency status to license a short-term rental unit.

This report proposes regulations for short-term rentals for consultation.

The short-term rental regulatory approach is premised on the following principles: permit people to rent their homes for short periods; minimize negative impacts on housing affordability and availability; enable greater diversity in tourism accommodations; maintain community stability, including in vertical communities; minimize nuisances; and create regulations and taxation systems that are fair and easy to follow for people and companies.

The proposed regulations are to:

 -  amend the City's zoning bylaws to create a new land use called "short-term rental" that is permitted in principal residences across the city;

-  prohibit short-term rentals that are not in a person's principal residence;

-  license companies that facilitate short-term rental activity, like Airbnb; and

-  create a registry for anyone who operates a short-term rental in their home.

The proposed zoning framework would permit short-term rentals across the city in the principal residence of any owner or tenant in residential and mixed use zones and in all residential building types. Within their principal residences, people could rent: up to three rooms within a unit, separately; the entire dwelling unit; and lawful secondary suites. A short-term rental would not be permitted in a dwelling unit that is not a principal residence. This restriction limits long-term housing from being converted to accommodation for tourists.

The proposed licensing and registration system would require that all short-term rental operators register with the City and post their registration number in all advertisements. Short-term rental companies would be required to be licensed and only list registered short-term rentals. These regulations strengthen the above zoning amendments and minimize the impacts of short-term rentals on neighbourhoods.

Companies would be required to report quarterly to the City with anonymized data about short-term rental activities, share details about certain listings upon request by the City, remove problem listings and pay a licensing fee. Operators would be permitted to register their principal residence only, and one registration number would apply to all listings associated with that address (renting bedrooms, renting the entire unit, renting secondary suites). Operators would be required to provide appropriate emergency and safety information to guests and pay a registration fee.

Based on information from Airbnb, staff estimate that the proposed regulations would permit approximately 7,600 properties rented on Airbnb in 2016 to continue to operate as they likely occurred in a principal residence. Approximately 3,200 properties rented on Airbnb in 2016 would likely not be able to be registered as they likely did not occur in a principal residence.

Staff propose to consult the public on the proposed zoning bylaw amendments and the licensing and registration system for short-term rental companies and operators. Staff propose to report back to Council with final recommendations to regulate short-term rentals in the fourth quarter of 2017.

Concurrent with the proposed regulations in this report, staff are considering the implementation of a hotel and short-term rental tax, as directed by Council, subject to receiving legislative authority from the Province of Ontario. On April 27, 2017, the provincial budget proposed giving the City the authority to collect a hotel and short-term rental tax by amending the City of Toronto Act. Recommendations for a tax on hotel and short-term rental will come forward later this year.

The recommendations in this report were developed based on research and consultation. Staff sought input from the public and stakeholders through online surveys, public meetings, focus groups with short-term rental operators and users, and meetings with representatives from the short-term rental and tourism industries and community and neighborhood organizations.

The following City divisions were consulted in the preparation of this report: Affordable Housing Office; Corporate Finance; Economic Development and Culture; Legal Services; Shelter, Support and Housing Administration; Social Development, Finance and Administration; Toronto Fire Services; and Toronto Building.