The Weather Network
May. 27, 2022 | Friday
Editorials and Opinions
Editorial: Solution needed for short-term rentals
File photo.

Niagara-on-the-Lake has a short-term rental problem.

With the increase in investment properties and Airbnbs, and taxes on live-in bed and breakfast operators, there seems to be a lack of sympathy and good policy on the part of our local government to protect the real people living in our town.

A number of problems arise from treating investment properties for Airbnbs the same as live-in bed and breakfasts, such as the lack of affordable rental housing, and the crackdown on bed and breakfast operators using their principal residence as a subsidiary income.

Here is a list of solutions council should look at and adopt.

1. Short-term rental operators with investment properties should be required to pay a higher rate of tax than live-in B&B operators.

2. What is and isn’t an investment property should be clearly defined and strictly regulated, with the actual homeowner having to live in the house year-round for a licence to be granted. This would stop people from simply having their niece/nephew or a hired employee live in the basement to bypass the law. A reasonable minimum length of time an owner must live in the house should be established and also be clearly defined. During away periods, the owner should not be allowed to operate a short-term rental out of the residence without paying tax rates for an investment property.

3. In all cases where the homeowner does not reside in the house for the majority of the year, the taxes should be steep. This would help prevent the hollowing out of neighbourhoods to property investors that want to operate short-term rentals, and allow a better chance for locals to rent or purchase property in town.

4. Short-term rentals with year-round, live-in owners should be exempt from the recent increase in licence fees. Bed and breakfasts are hobby businesses for many live-in operators and those live-in operators should be the ones that benefit from town policy, as they are real, voting residents of the town. An all-encompassing licence fee for short-term operators is only damaging to residents.

5. Any rental property found to be operating illegally should face a hefty fine and be shut down for a lengthy period. The onus should be on the illegal operator to prove, after that time, that they will abide by the laws in the future. In Montreal, tenants of a condo complex were ordered to pay more than $50,000 after renting out properties contrary to the building’s regulations. A hefty fine is always a good deterrent.

Further to those important additions, live-in operators should be exempt from any future municipal accommodation taxes.

Council has deferred discussions on a potential municipal accommodation tax, but it won’t be long before the issue is back on the table.

If a hotel accommodation tax is to be applied to Niagara-on-the-Lake, it should only affect businesses that are operating purely as investment properties, ie. hotels and owner-absent short-term rentals. Again, this needs to be clearly defined, and if it is, a hotel accommodation tax should be a no-brainer for a municipality with hefty legal bills to pay.

If applied and regulated, these simple additions would not only benefit the real residents of NOTL on their tax bills, it would help stop the hollowing out of neighbourhoods to investment property owners.

Take someone like me for example: I love NOTL, I want to live here. Aside from property values being ridiculously high, it’s hard to expect it will get any easier to rent or purchase in NOTL if houses continue to be purchased as investments — to provide a service the town isn’t properly regulating.

The town should heed the example of cities like Vancouver, which have banned Airbnbs for non-principal residences.

As well, companies like Airbnb should be paying taxes to operate within a municipal boundary. 

Whatever is done to protect our town, it should be at the expense of for-profit businesses, and not the residents looking to stay and make a living in their hometown, nor the small bed and breakfast operators who operate from their primary residence. This would simply be good planning in the interests of the public..