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The City of Toronto was on the hot seat at the start of a tribunal on Monday that will determine the future of rules passed early last year to regulate short-term rentals such as Airbnb.

The regulations include restricting rentals to the owner’s principal residence and requiring short-term renters to register with the city and pay a 4-per-cent municipal accommodation tax.

Housing advocates and property owners squared off as the local planning appeal tribunal began hearings, expected to last for at least the next week, after several residents appealed the changes.

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The city has argued the regulations are important to maintain the accessibility and affordability of long-term rental options as the city faces an acute housing crunch.

Monica Poremba, a lawyer with the Fairbnb advocacy group, agreed.

“The City of Toronto is facing a housing crisis and the proliferation of short-term rentals, which has gone unchecked, has significantly exacerbated the crisis,” she said in arguing in favour of the regulations.

Lawyers for residents hoping to continue to rent out whole suites for short-term rentals said the option is a long-standing practice that provides many benefits.

Short-term rentals provide more choice and cheaper options for visitors as well as newcomers to the city, while also maintaining flexibility for owners, said Sarah Corman, counsel for appellant Alexis Leino, a Toronto realtor.

“The city is now, with a sledgehammer, gutting this important and flexible form of short-term accommodation without sufficiently considering or understanding the likely impacts of doing so,” she said.

The regulations for short-term rentals were approved by Toronto city council at the start of 2018, but were appealed before they could be put in place. A delay in the appeal process last year put off the hearing until this week.

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The rules allow an entire primary residence to be rented out when an owner or long-term tenant is away, up to 180 nights a year.

Vancouver brought in rules last year requiring short-term renters to get a business licence and restricts rentals to a primary residence.

The rules are designed to limit the impact of short-term rentals on the availability of longer-term rental stock as major cities face tight rental markets.

A Toronto report found that in April, 2017, there were an estimated 20,000 short-term listings over 16 websites, although it noted there were likely duplications. The report said Airbnb alone rented out 988,378 nights in the city in 2016.

The hearing in Toronto is scheduled to run seven days but could be extended.

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