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Tuesday, May 21, 2024
Editorial: Part 3: Simple solutions to make rental system fair
The Lake Report's weekly editorial. File

Third in a series

In the previous two weeks, we have talked about how Niagara-on-the-Lake’s municipal accommodation tax should apply to all accommodation businesses, regardless of size, and how by not doing so, the town is creating a potentially litigious and unfair business environment.

But let’s not forget, short-term rentals are businesses operating inside homes that are meant, in all aspects of zoning, to be homes and not commercial ventures in the first place.

With that in mind, it’s important to reiterate that unhosted rentals (ones that don’t serve a function as a home first) aren’t even supposed to be legal, because of residential zoning bylaws.

So, no matter who you are, even if you’re Jeff Bezos, you can’t just convert a home into an Amazon warehouse, or a restaurant, or boutique store and avoid commercial property taxes. Especially if you don’t even live in the house.

But that’s what council is doing when it allows many short-term rental owners to use homes as boutique hotels, without the burden of fair taxation.

Luckily, there’s an easy solution to make things more fair — temporarily rezone rental properties for commercial use (with a time limit) and apply the accommodation tax fairly to those commercial enterprises when they are being used for commercial purposes.

Let’s hope our new council does that.

Not only will it make things fair, it will provide a much-needed disincentive to people considering buying up houses to turn them into cash cows at the expense of real housing in our town.

We can’t be more clear: This is an industry that plunders our homes for profit, in the midst of a housing crisis. And these businesses should never have been allowed to operate without the house serving its purpose as a long-term home to a voting resident. Whether that be a tenant, owner, or a niece or nephew staying there for free.

We’re not sure how other towns want to operate, but it should be a bare minimum standard in Niagara-on-the-Lake to protect our housing supply.

Right now that’s not happening.

We don’t understand how things got this way, but we trust it was an innocent oversight of past councils as new technology crept in — an oversight that should be corrected by our current council, and soon.

It would be a shame to see the town lose even more money fighting a lawsuit, all because it tried to appease a vocal minority of stakeholders from an industry that shouldn’t exist in our homes in the first place.

And if there is any argument to be made that some homes should not be rezoned temporarily, it should be based on whether that home is serving its function as a home first. The number of rooms should not be part of the discussion and the rental should still have to collect the accommodation tax.

How the town reached a decision to base taxation on the number of rooms is mystifying — even with a stacked committee. It appears no one thought to ask how the number of rooms is relevant. Obviously, it isn’t.

All unhosted rentals should be forced to temporarily rezone for commercial use and should be made to collect the accommodation tax. The tax should apply to any room rented in NOTL. Period.

And any temporary rezoning of a house should come with stipulations, for example maybe a four-year time limit, after which the house must serve a residential function for a minimum of 10 years.

Next, we’ll take a look at the “honour system” method of collecting room tax payments.

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