Outside the brightly decorated lobby of the 32-storey condominium tower at 600 Fleet St. stands artist Douglas Coupland’s statue of a giant British toy soldier standing over a fallen invading Yankee, commemorating the War of 1812. Inside, the building’s security team these days has been dealing with another, more covert invasion: tourists and partiers trying to rent units for the weekend via websites such as Airbnb, in defiance of the condo board’s rules.
On the front lines, and behind the front desk, is the building’s friendly security chief, Prince Abiona, 41, who greets many of the tower’s hundreds of residents by name as they come and go. In this war against Airbnb, the Nigerian-born Mr. Abiona, who sports a headset and whose biceps stretch the sleeves of his white Calvin Klein polo, says he is winning. His tactics include scanning the website and others like it for up to three hours a day for illicit listings in his building, questioning anyone who wanders into the lobby dragging luggage behind them and kicking out any short-term renters he finds.
The few that do slip through his defences can cause big problems. Earlier this year, he says, a unit rented out on Airbnb played host to a rowdy drunken party with about 20 people, some of whom urinated in the hallways and even in the elevator. Another time, an Airbnb partier threw up in the condo pool, forcing it to close. Often, the problem is long-term tenants who list their place on Airbnb or other similar websites, without the actual owner of the condo knowing.
“These people are just here for a few days, they just want to do what they want and they don’t care about the building,” Mr. Abiona says. “That’s why we are fighting it.”
It’s a challenge in condos across the city. Some boards allow short-term rentals through sites such as Airbnb, but are now debating their rules because of mounting issues. In low-rise residential neighbourhoods, Airbnb and other services have long been sparking similar complaints about parties and strangers who come and go. In September, an east-end home rented out through Airbnb was trashed in a rowdy bash broken up by police, who seized guns and crack cocaine.
Airbnb’s critics have other broader concerns. Many, including those with a hotel-union-funded coalition calling itself Fairbnb, say Airbnb is unfairly competing with the city’s hotels, which have to pay higher taxes and other costs.
But the line of attack likely to get the most attention at city hall is the argument around Airbnb’s effect on housing affordability. Critics fear the explosive growth of Airbnb – which doubled its Toronto rentals from 2014 to 2015 – is crowding out long-term tenants, driving down the city’s already low vacancy rate and driving up rents.
Mayor John Tory, who has made housing affordability a key priority, had his executive committee vote to instruct city bureaucrats late last month to speed up plans to launch consultations and come up with options for regulating Airbnb-type short-term rentals. A report is due in the second quarter of next year.
Airbnb – which now operates in 191 countries and, at an estimated value of $30-billion (U.S.), is worth more than even the world’s largest hotel chains – is facing similar calls for a crackdown in Vancouver and other cities. The company says it bans problem users from its site, pays hotel taxes in cities around the world and has agreed to be regulated in scores of jurisdictions. It also says it is an economic boon, helping people earn extra cash for renting out a spare room and drawing tourists into neighbourhoods across the city where they spend their money. However, it has launched legal challenges against strict rules imposed on its operations in New York, Santa Monica, Calif., and San Francisco.
It has also tried to get in front of the concerns in Toronto that it is driving up the city’s rents by releasing a study, based on its own data, suggesting Airbnb has a “minuscule” impact. Of the 9,500 active listings it had in Toronto last year, the company says, only 760 could be considered competitive with longer-term rentals, as their Airbnb hosts brought in at least $16,100 a year or more than the city’s average annual rent. Those 760 homes are a drop in the bucket, Airbnb concludes, since Toronto has more than a million housing units.
Fairbnb claims these numbers are selective and that Airbnb is having a disproportionate effect on hot downtown neighbourhoods. Zohra Jamasi, an assistant professor of economics at Ryerson University who has studied Airbnb for the left-leaning Canadian Centre for Policy Alternatives, says that 760 number should be compared with the number of units of rental stock in the city, not total housing units. In the central former city of Toronto, there were 88,143 rental units last year. With a vacancy rate at a low 1.7 per cent, that translates into just 1,498 vacant units.
Prof. Jamasi says that 26 per cent of all Airbnb rentals take place in central Toronto, meaning that at least 198 of those 760 Airbnb units the company says outcompete long-term rentals were located there. And that means, according to her analysis, that Airbnb stripped 13 per cent of the central area’s available long-term rental units out of the market last year, a sizable chunk.
“They are trying to minimize their impact on the rental market,” Prof. Jamasi said. “… Our data and our analysis suggest that their impact on the housing market is much more substantial than what they are coming out and communicating to everybody.”
While the city drafts its new rules, enforcing whatever rules are on the books is left to condo boards or to bylaw officers prodded into acting on the city’s hodgepodge of zoning rules that do appear to forbid some Airbnb-type activities in parts of the city.
Even when condo boards have the authority to block Airbnb rentals, actually enforcing the rules can be difficult, warns Toronto condo lawyer Denise Lash. Condo managers cannot impose fines, but they can charge offending condo owners the legal costs of the lawyers’ letters sent to reprimand them, usually several hundred dollars. Actually stopping a recalcitrant operator can mean eventually going to court.
“It’s been a challenge for boards and managers to catch people who are doing it,” Ms. Lash said. “… We’re hoping the city steps in to impose some kind of tax.”
Peter Moore, a software engineer who lives in a condo near Bathurst and Front Streets, says the unit next to him is rented out full-time on Airbnb and other websites – even Expedia.ca and Hotels.com. He’s had to deal regularly with loud noise, a recent party broken up by police at 6 a.m., and other problems: “I was greeted by an escort outside my unit one time, stuff like that. It’s just really irritating stuff.”
Vicki Trottier, who lives in a downtown condo and heads the Fort York Residents Association, says unhindered Airbnb rentals threaten the sense of community in condo towers.
“People buy into a building and it’s their home,” Ms. Trottier said. “You want to know your neighbours. Of course people move in and out. But people don’t buy to live in a hotel.”
Back at 600 Fleet St., Mr. Abiona says some Airbnb renters trying to sneak into the building have clearly been coached to insist they are only visiting relatives, but that he sees through the ploy. None of his building’s 339 units are currently being rented out on Airbnb or other similar sites as far as he can tell. But he feels he can’t let down his guard and abandon his compulsive Web searches, even for a few days, for fear new Airbnb listings will pop up: “As soon as they get caught, they give up. They know we are watching.”
Airbnb vs. (almost) everybody
The online short-term rental service is facing crackdowns in cities around the world
Vancouver: The city is currently debating proposed rules that would allow residents to put all or part of only their principal residences up for short-term rentals, but force them to get business licences. Using a room or a house year-round for short-term rentals would be prohibited and hosts would not be allowed to put laneway houses or basement suites on Airbnb or other similar sites. The city estimates that 1,000 of Airbnb’s 5,000 listings in the city are units effectively pulled off the already tight long-term rental market. Airbnb pegs the number at just 320.
Montreal: A new Quebec law that took effect in April requires short-term Airbnb-style hosts who rent out their homes frequently to obtain a bed-and-breakfast or hotel permit from the province that costs $250 and charge a 3.5-per-cent lodging tax. But there are concerns the law is simply not being followed. In September, the province’s Tourism Department said just 41 permits had been issued to Airbnb-type short-term rental operators in Montreal – despite the thousands of rooms and apartments listed in the city on various websites.
New York: In its biggest U.S. market, Airbnb is reportedly in talks to settle a lawsuit it launched against New York State legislation, signed into law by Governor Andrew Cuomo in October, that would issue $7,500 (U.S.) fines for anyone who advertised a short-term rental apartment in a multi-unit building in New York City, where it has been banned since 2010. (Short-term rentals are allowed for single-family homes in New York City, however.) At issue was whether Airbnb, or just the hosts using the platform, could face the fines – something the company opposes. The company has criticized the law as “Albany backroom dealing” to reward “the price-gouging hotel industry.”
California: Fairbnb, a hotel-union-sponsored coalition against Airbnb, flew in the mayor of Santa Monica, Tony Vazquez, to speak to Toronto Mayor John Tory’s executive committee, even though Mr. Vazquez was in the final days of his re-election campaign. In response to complaints about Airbnb rentals of his city’s “monster mansions” for large parties, his city last year passed a strict ordinance allowing short-term rentals only if the owner is present, has a business licence and complies with city fire and building codes. But both hosts and the website can be held liable for violations, and Airbnb has challenged the law in court. The company has also challenged similar rules in San Francisco, its hometown, and Anaheim.
Philadelphia: Airbnb cites the rules in Philadelphia as a model it would like others to follow, and had the city’s former mayor, Michael Nutter, write a letter to Toronto’s executive committee, urging it to come up with rules that will allow citizens to “embrace home sharing.” Philadelphia requires permits for anyone renting out a secondary residence or a primary residence let out for more than 90 days a year. But Airbnb collects hotel taxes on behalf of the city and state.
Europe: Amid rising concern over affordable housing, Berlin has effectively banned most short-term apartment rentals, threatening hosts who rent out more than 50 per cent of their space for a short-term rental with a €100,000 ($150,000) fine, unless they secure special permits. The move, upheld by a German court in June, is seen as a sign other European cities could follow suit. In London, where Airbnb has close to 50,000 listings, the British government actually moved to make short-term rentals legal last year, with an amendment to housing legislation that allows homeowners to rent their properties for up to three months every year.Report Typo/Error