City council Wednesday endorsed new rules that will restrict short-term rentals on Airbnb and other similar platforms to primary residences in a bid to crack down on so-called “ghost hotels” run by absentee owners.
Under the new rules, corporations will also be banned from operating short-term rentals and owners who rent their properties out on Airbnb and other home-sharing platforms will be required to pay $100 for a permit that will be valid for two years.
Owners will be required to provide proof of residence such as a lease or deed, and permits can be revoked if operators run afoul of the regulations. Grounds for losing a permit include criminal activity, unpaid fees, behaviour that endangers public health or safety and “repeated public nuisances.”
Rural vacation homes will be exempted from the new regulations, and council also agreed to allow owners of coach houses and “secondary dwelling units” in rural areas to use their properties for short-term rentals “regardless of occupancy.”
The new regulations are bound to generate plenty of controversy.
Critics argue that short-term rental platforms reduce the stock of rental accommodation available to long-term tenants and disrupt residential neighbourhoods. But others say the new restrictions will punish legitimate business owners.
Genevieve Walton, the founder of professional Airbnb property manager Short & Suite BNB, told a recent meeting of the city’s community and protective services committee she was concerned she’d have to downsize her 30-person company if the city’s regulations came into effect. Scott Clement, co-owner of breathebnb Vacation Rental Management, told OBJ recently that the city’s proposal would “ruin” his 40-person firm’s ambitious growth plans.
Alex Dagg, public policy manager of Airbnb Canada, told the committee that although she supports a permit system to register local hosts, the principal residence requirement is “too restrictive” and would have a detrimental effect on Ottawa’s tourism industry.
City staff estimate it will cost about $900,000 to enforce the new regulations in the first year and $834,000 in the second year. Those costs would be covered by permit and registration fees as well as the existing four per cent municipal accommodations tax that hotel guests and people who rent rooms through Airbnb have been required to pay since last year.
Airbnb voluntarily agreed to the tax, but all short-term rental operators will now be required to charge it.