City moves to regulate, license and tax Airbnb-listed rooms and houses

City officials are preparing to hold public consultations on proposed regulation of short-term accommodations listed on Airbnb and similar web platforms.

The draft regulations require that any short-term rental (STR) located in a residential zone must be the primary residence of the host.

According to City Hall, there are 13 hosts in Sault Ste. Marie operating multiple listings, totalling 35 STRs.

City officials estimate at least half of all listings are not a host’s primary dwelling.

The hosting requirement would be waived for residential units allowed in commercial zones, although at present nearly all of the Sault's short-term rentals are in residential areas.

Other proposed regulations include:

• STRs would be permitted in all zones that permit a residential dwelling
• STRs would be defined as any accommodation available for up to 28 days
• hotels and bed and breakfasts would be exempt from STR regulations
• an STR located in any residential zone could not be offered or advertised for more than 180 days per calendar year. This requirement would be waived for residential units permitted in commercial zones.
• STR hosts would be required to have a valid license from the city
• the four per cent municipal accommodation tax (MAT) will be collected from STRs

A report to City Council prepared by senior city planner Peter Tonazzo found Sault Ste. Marie had 66 active STR listings as of February, 2020.

Forty of those were entire dwelling units, while 26 were private rooms, with or without a dedicated bathroom.

Twenty-two of the listings were in the downtown area, while four were marketed as waterfront properties: three in the Pointes area and one on River Road.

"Almost all active STRs are located in residential areas," Tonazzo reported.

"Airbnb is by far the most commonly used web platform, offering listings in more than 190 countries. Others include Vrbo and Kijiji. In most cases, local listings on other platforms were also on Airbnb."

"While the extent of these impacts locally is unknown, in general there has been a steady increase in both the supply and demand of online short-term rental accommodations."

The average daily rate for an STR private room in Sault Ste. Marie is $50, compared to $111 for an entire STR dwelling.

"At present, the majority of the municipalities with zoning regulations for STRs are in southern Ontario," Tonazzo says.

"Some municipalities in cottage country, (Muskoka and Haliburton areas) also have STR regulations. Sudbury, Timmins, Thunder Bay and North Bay do not regulate STRs. Kenora is reviewing the potential for regulations and Huntsville has decided against any regulations."

Commented Ward 5 Coun. Corey Gardi at last week's City Council meeting: "I think that the short-term rentals should contribute to the MAT tax."

"We need to ensure that these short-term rentals are safe to rent and that those who are landlords or the hosts are accountable."

"It's nice to see the data that shows STRs haven't had any outsized effect on our local housing market," added Ward 2 Coun. Luke Dufour.

"But given some of the other conditions that we have here locally in terms of affordable housing and the vacancy, rate, it's good that the city is getting on an STR regulation sooner rather after that becomes a problem."

A lot of southern Ontario municipalities are getting into regulating STRs only after investors have put money into purchasing residences for STR use, Dufour said.

"We're a little bit ahead of the curve here."