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Short-term rental licensing system gets mixed reviews

By Dave Flaherty/The Oshawa Express

A proposed licensing system for short-term rentals in Oshawa received a long line of criticisms from corporate services committee members.

The system, which includes residents wanting to rent out their residence on a short-term basis, has been in the works for some time now.

At the Feb. 3 committee meeting, councillors had their first look at staff’s recommendations.

It’s proposed the system would build on established zoning by-law terms which require a short-term rental to be the principal residence of the operator.

Operators would need to have a local contact available at all times to respond to issues and to attend the rental property in at least one hour.

The system would continue the current limits on short-term rentals of no more than 28 consecutive days, or a total of 180 days in a calendar year.

Operators would also not be able to have any other renters in the home.

The proposed licensing fee is $75. Fees in other Ontario municipalities include Toronto ($50), Ottawa ($100 for a two-year license), Kingston ($180), Oakville ($237), and London ($165 for initial application plus $171 for a fire inspection, and $55 for annual renewal).

Ottawa, Oakville and Toronto charge fees to short-term rental companies, although commissioner of corporate services Tracy Adams stated there is limited success in actually collecting these fees.

Awareness around the issue of short-term rentals in Oshawa began to gain traction a few years ago when staff received complaints from residents regarding “party houses.”

Staff then began working on the licensing system at the end of 2018. This included consultations with the public and rental industry stakeholders.

According to city data, the number of short-term rentals in Oshawa increased from 31 in May 2016 to 113 in July 2018.

It is also noted the number of related complaints jumped from one in 2016 to 19 in 2019.

Ward 5 city and regional councillor Brian Nicholson said short-term rentals being used as “party houses” are causing serious problems in the city.

He questioned how city council and staff could be sure operators comply with the proposed system.

Staff recommended the city partner with a third-party service, which would monitor compliance.

Adams noted the city wouldn’t inspect houses before owners receive licenses because it’s assumed their homes would already meet property standards under the Ontario Fire Code and city by-laws.

Inspections would take place when complaints come in, and Adams said costs for enforcement and monitoring would recover through penalties laid against operators.

However, she noted it’s tough to anticipate enforcement costs without really knowing how many complaints there will be.

Nicholson said he didn’t want the costs of the system to become a “burden” for taxpayers who don’t deal in short-term rentals.

Ward 2 city councillor Jane Hurst was frank in her contempt for the short-term rental industry.

“I’m not a fan of this business model, but it’s 2020, and I have no choice but to work with what is in front of me,” she said.

However, Hurst believes the proposed $75 fee is “too generous.”

She said many short-term rental operators are unlikely to declare the income they receive to the Canadian Revenue Agency (CRA) and don’t have to set up an HST number.

“Based on this alone… if you want to do business in the City of Oshawa, I feel the fee should be increased,” she said.

Hurst also wants the city to consider an escalating fee structure based on the type of residence or the number of rooms available.

Ward 1 city councillor Rosemary McConkey believes the provincial and federal governments need to take action as well.

McConkey told the committee she had seen Airbnb listings for 10 to 15 people in a four-room house.

As a real estate agent, some residents have told her they want to build a house simply for short-term rentals, McConkey added.

To Ward 1 city and regional councillor John Neal, the licensing system wouldn’t provide much peace of mind for those who live near houses used for short-term rentals.

“I’m not happy with this, because I know what is going to happen,” he said.

Neal recalled past episodes where police received a call, attended the scene, and then “the party continued” after officers left.

Mayor Dan Carter supported the licensing system but had some concerns.

He noted individuals who want to rent out their homes will have to follow rules, but companies such as Airbnb don’t seem to have plans to do the same.

“My frustration is there doesn’t seem to be any willingness on their part to be part of the conversation,” Carter said. “At some point, we’ve got to make the system for all parties.”

Carter asked staff to reach out to short-term rental companies and advise council what their responses are.

To Carter, whether they are willing or not to work with the city will then be on the record.

The committee referred the report back to staff with several amendments for consideration.

Nicholson suggested any operators who rent their residence through a third-party booking company should immediately lose their license.

He also only wants individual owners to get licenses, not corporations and numbered companies, as he feels they will immediately “disappear” if they receive any penalties.

Lastly, he wants information of operators to be passed onto the CRA to ensure income is properly reported for tax purposes.

Nicholson said this would weed out any “fly-by-night” rental operators.

According to him, these types of regulations shouldn’t be deterrents to anyone who operates their business legitimately.

Hurst also asked staff to limit short-rentals to two rooms per house, with a maximum occupancy of two people per room.

Staff is expected to bring the system back to committee later this year.