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Proposed short-term rental rules could be bad for spin-off businesses, entrepreneurs warn


The debate about how to regulate short-term rentals will once again dominate Toronto city hall this week, but large-scale hotels and Airbnb won’t be the only stakeholders speaking out.

A number of small spin-off businesses that have sprung up as part of the short-term rental phenomenon will be adding their voices to the mix.

“It could potentially spell the end for companies like us,” said Lisa Marion, co-founder of H&P Properties, a company that manages short-term rentals for property owners who are often travelling out of town or too busy to do it themselves.

Lisa Marion

Lisa Marion, right, and Monica Reichel run H&P Properties, a company that helps people manage their short-term rental properties. Marion says the proposed new rules show the city doesn’t care entrepreneurs like them. (Courtesy: H&P Properties)

“This isn’t a fad — short term rentals,” she said. “The impact from the potential regulations is very far reaching. We’re going to lose our livelihoods.”

Those proposed regulations go before Mayor John Tory’s executive committee Monday. They were announced by the city’s municipal licensing and standards division earlier this week.

Staff are recommending:

  • Banning people from listing units where they don’t live.
  • Amending zoning bylaws to create a separate category called “short-term rental.”
  • Licensing companies like Airbnb and others.
  • Starting a registry for anyone operating a short-term rental unit

.’Trying get the right balance’  

“We are trying to get the right balance,” said Coun. Ana Bailao, who represents Ward 18 and chairs the city’s affordable housing committee.

According to data from Airbnb, about 3,200 units registered on its website are owned by investors for the sole purpose of short-term rentals.

Josh Matlow and Ana Bailao

Coun. Ana Bailao, pictured here with Coun. Josh Matlow, says the proposed new rules would allow people to keep enjoying Airbnb, while also having a ‘very positive impact on the rental market.” (Grant Linton/CBC)

If the new rules go through, Bailao hopes those units would go back into the city’s long-term rental stock, which as CBC Toronto has been reporting, is hurting.

“We need to minimize the negative impacts this has on the affordability and availability of stock,” she said.

But Marion says, based on her clients, that’s not necessarily the case. She feels some will sell their units, offer them to family, or keep them vacant — many owners often use their units occasionally, which is why they rent them out on a short-term basis.

“If we want to increase the vacancy rate, we really just need to build more units,” she said.

The ripple effect

More than 450,000 people visiting Toronto stayed in Airbnb units last year — bringing with them an estimated $ 417 million in spending, the company estimates.

Irina Zusmanov says about 50 per cent of her business comes from Airbnb users, which jumps to 70 per cent during the busy summer season.

Irina Zusmanov

Irina Zusmanov, right, and partner Katerina Pakman operate Bags Away, a company that predominantly helps Airbnb users store their luggage before and after check in. (Courtesy: BagsAway.ca)

She and her partner started Bags Away, a mobile luggage storage company, last year. They employ about 20 people, who pick up, store and deliver people’s bags before and after their stays at short-term rentals.

If the proposed rules go through, Vusmanov says they’d feel it — something she wants city staff to take into consideration.

“I think they should give it more thought in terms of the bigger impact.”

So far 40 people have signed up to speak in front of the executive committee on Monday.

Lisa Marion plans to be one of them.

“They need to embrace entrepreneurship rather than bow to the demands of those with more money, like hotels,” she said.

The meeting starts at 9:30 a.m. at Toronto City Hall.

CBC | Toronto News

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