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Niagara-on-the-Lake
Friday, December 9, 2022
Editorial: With election on horizon, time for town council to act is now

Niagara-on-the-Lake has an awful lot of short-term rentals.

And the fact that 10 per cent of all residential homes in Old Town are some form of short-term rental should be a wake-up call to NOTL town council.

While many of those rentals are legitimate, hosted bed and breakfast operations where an owner lives and welcomes visitors into their home, the proliferation of cottage rentals and vacation rentals should be a big concern for our town's leaders.

The growth in this sector has been tremendous – and unchecked. We understand why Old Town is home to many rentals, as the historic district is a big draw for visitors. 

But as with any growth, it needs to be managed so it doesn't overwhelm the town. 

We can debate whether rentals are a major factor in NOTL's well-documented housing affordability problems, but the fact remains that the growth of rentals here – and in many other places worldwide – needs some controls.

Limiting licensed rentals to owner-occupied homes would be a start. As our extensive reporting on the short-term rental industry in NOTL and around the world has shown, there are options available to governments for dealing with the situation.

But using available tools to crack down on the number of rentals is just one aspect of the issue that council needs to tackle.

There are far fewer B&Bs than there once were in town but these operations are still accommodation businesses.

Council missed the boat when it instituted a 2 per cent municipal accommodation tax that is due to start in July. (The revenue from the tax is to be used for tourism-related purposes only.)

 While the levy will be charged by all hotel operators in town, it applies to a fraction of the nearly 300 short-term rentals because council opted to exclude operations with fewer than five rooms.

That's really unfortunate and unfair, but as both the hoteliers and the B&B association have acknowledged, they expect that eventually all short-term rentals, including small B&Bs, will have to collect the tax. It's just a question of when town council will have the political will to do so.

The B&B association is right to want to make sure the town has a proper structure in place for collecting and spending the revenue from the accommodation levy.

But figuring out the logistics of how to do it efficiently and effectively should not be difficult. 

We're not reinventing the wheel here and many municipalities around the world – and even right here in Niagara – already have an accommodation tax and systems in place to collect and account for it.

We respect the argument that the past two years have been tough for businesses in NOTL. 

But it appears we are coming out of the COVID coma and life will soon be more “normal.” (One sure sign of that is the impending return of the annual Strawberry Festival. )

Given all that and with a municipal election on the horizon, town council needs to act quickly to deal with the short-term rental situation and to ensure the accommodation tax is collected by all licensed rental operators. This is bound to be an election issue. Let's see our council act sooner rather than later.