Toronto vows crackdown on Airbnb fraudsters

Condominiums in the City Place neighborhood in downtown Toronto.Fred Lum/The Globe and Mail

It’s been five years since Toronto passed a bylaw governing the short-term rental market, now after many false starts the city says it’s finally gearing up to unleash an enforcement blitz.

With a budget plan that aims to grow its enforcement team from five to 12 employees, “we’ve moved from an education phase to more direct enforcement,” said Carleton Grant, executive director of Municipal Licensing and Standards. , which oversees bylaw enforcement in the city. . What is clear is that there is still a lot of work to do: there are 4,541 short-term residences registered in the city, a number that still accounts for about half of Airbnb listings in Toronto each day. . Unregistered listings on Airbnb are only allowed to offer rental terms of 28 days or longer.

“About 42% [of short-term listings] returned to the traditional rental market. … It demonstrates that it works,” Grant said, citing data from third-party researchers. However, he agrees that pinpointing the exact cause of this transition can be difficult given that the world has gone through a two-year pandemic that has flattened hospitality and tourism businesses during the same period.

“That’s a significant number of houses that were built for housing, but 58% didn’t, and that’s no cause for celebration,” said Spadina Fort York councilor Joe Cressy. , whose downtown district has the most short-term registrations. dwellings, according to city data, with 1,221.

“There are still hosts who have dozens of properties, and also some who have one in a basement. You want everyone to comply, but [Municipal Licensing and Standards] prioritize the response to focus on egregious actors. The fundamental objective is to put these units back on the housing market.

Toronto was the first municipality in Ontario to create a bylaw to manage short-term residences, but since then nearly 30 others have followed suit, although what is allowed and prohibited varies from jurisdiction to jurisdiction. ‘other.

However, it is still easy, even for an amateur sleuth, to find examples that seem worth investigating, not just in Toronto, but in cities across the province. Take Airbnb user “Ali” who also posts on Facebook forums as “Ali Cheema”. Ali has 24 listings spread across southern Ontario, including several operating in cities that have rules against Airbnb listings from anyone who is not the primary resident of a home. He boasts online that he’s hosted between 400 and 500 guests in his Airbnb rentals, potentially worth tens of thousands of dollars in revenue. Ali did not respond to requests for comment.

Property records show that some of the homes Ali advertises are owned by other people, including one in North Toronto that is not currently accepting rentals, but is nonetheless a registered short-term residence with the city. . When contacted by email, the owner of the house confirmed that he had been living in Pakistan for nearly two years and said he was unaware that his house was still showing up in Airbnb searches.

In online forums dedicated to Airbnb hosts in the Greater Toronto Area, there are frequent conversations where users describe a desire to convert long-term housing units to short-term uses in markets that restrict this activity. Sometimes these hosting hopefuls use art terms like “co-hosting” or “rental arbitration” or “property management” to describe activities that are clearly prohibited by most regulations.

Some Toronto Airbnb hosts have noted an increase in basement apartment inspections. These types of apartments are not allowed to appear on short-term sites unless the tenant is the one doing the rental. Grant said the city’s third-party data collection has allowed him to focus on such second-look-worthy lists.

Grant said he couldn’t quantify how well the city is doing in uncovering bad actors who flout the rules, saying there’s still work to be done to collect that data. On complaints related to short-term rentals, its data is better: “We have received 1,027 complaints, since January 1 [2021] March 1 [2022]. We are investigating all of this and, in 2021, we have filed 117 charges with the courts. »

The bylaw provides for fines of up to $25,000 for the first offense and $50,000 for the second.

The work that was done in 2021 was also frequently interrupted by the need to reassign nearly all MLS bylaw officers to public health-related law enforcement. Things like noise complaints, dog parks, and Airbnb have taken a back seat for much of the year. Now Mr Grant said things are almost back to pre-pandemic service levels and the hunt for short-term rental rule breakers could soon begin in earnest.

“It’s going to take time for us to catch everyone playing with the system,” Mr Grant said.

The city has come under fire from some residents who say it is not doing enough to crack down on fraud. Housing campaigner Thorben Weiditz has warned there are too many listings on Airbnb that are unregistered and therefore only allowed to rent for a minimum of 28 days. The rules are meant to allow landlords to use Airbnb to find long-term tenants, but Weiditz believes at least some of those 28-day listings are shams that allow users to book and then cancel at a later date. agreed time to shorten their stays below. the minimum of 28 days.

“We’re going to continue to see people trying to bend certain rules,” Cressy said. “My message would be: don’t break the rules. And if you do, through law enforcement, we’ll come find you. Also, shake your head: we need housing.

Your home is your most valuable asset. We have a week Real estate newsletter to help you stay up to date with housing market news, mortgages, the latest closings and more. Register today.

Comments are closed.