THE BIG READ: How short-term vacation rentals are ruining the neighbourhood
Living next door to a ‘ghost hotel’ has become a nightmare for many Ontario homeowners. Cities and towns across the province are struggling to keep the peace without turning away tourists
From MidlandToday, Marg Bruineman, July 23, 2022
Original artwork by Danielle Fleming, Village Media
The dusty road narrows as it winds through a thickening canopy of trees before opening up to a cluster of about 10 primarily summer homes nestled alongside Lake Simcoe.
For years, Symon Zucker has retreated to the family’s refuge in this idyllic setting an hour from Toronto, insulated nicely, it seems, from the rest of the world.
That was then.
“Things have changed, and not for the better,” explains the Toronto lawyer, who first started cottaging in Innisfil in the 1950s.
The roads are busier than ever, as is the lake. There’s ongoing development—Friday Harbour, the huge waterfront resort community on 600 acres, contains roughly 1,000 units so far along with a host of water-related and recreational amenities. The Town of Innisfil, snuggling the southwestern shore of Lake Simcoe south of Barrie stretching west over Highway 400, has experienced an 18.5 per cent overall growth from 2016 to 2021, according to the latest census.
Next to Zucker’s picturesque retreat is a plain, three-season, single-storey cottage. It was once occupied by a friend; Zucker encouraged him years ago to buy it. In recent years, the property has become a busy rental, far from the family cottage it once was and shattering the comfort of the formerly quiet sanctuary.
“It’s breaking up friendships, it’s putting neighbour against neighbour,” said Zucker.
He found an online ad listing the small three-bedroom cottage as appropriate for 10 people, which he said easily swells more than two-fold with visitors on summer weekends swarming the cottage, the dock and the wider waterfront.
Renters, he said, sometimes spill over to his property and migrate through the water, even occasionally ending up lounging on his dock. The tall cedar hedge dividing the properties provides a bit of a wind break but does nothing to dampen the noise of late-night music and parties.
“People who come on the weekends and pay $750 a night feel entitled to do what they want,” he said. “How many times can I go to the town?”
“I feel badly telling them to turn down the music all of the time, because I know how much they’re paying.”
Zucker’s story is definitely not unique. In communities across the province, more and more homeowners are enduring the same nightly struggle: living next door to a short-term rental property, where new guests constantly come and go with varying levels of noise and activity.
Amid the boom of so-called “ghost hotels”—guest houses where no owner or manager is onsite—municipalities throughout Ontario are struggling to find the right balance between attracting tourists and maintaining the peace.
Some municipal councils are still arguing about the best way forward, while others have introduced licensing regimes and placed limits on how many people can stay at a given property. Some municipalities, including Goderich, have issued an outright ban on renting homes on a short-term basis. The town of Erin, sandwiched between Caledon Village and Halton Hills, fielded so many complaints about one particular party house that it recently enacted a full prohibition against Airbnbs.
In the meantime, the provincial government has said very little, leaving individual communities to create their own rules on short-term rentals. One thing is certain: finding a perfect solution is no party.
The online home rental company Airbnb was introduced in 2007 as a disrupter, allowing individuals to rent out their own homes in the sharing economy, completely redefining the vacation industry. The model has been embraced by travellers worldwide, allowing them to stay in homes or homelike settings at rates that can be lower than traditional hotels.
It’s been copied by other online platforms. And its use has since expanded, allowing individuals to buy property to use exclusively for short-term rental—which allows a much higher return than a monthly residential rental.
Revenue for the private short-term accommodation market in Canada in 2018 was estimated at $2.8 billion, according to Measuring private short-term accommodation in Canada. The 2019 report by Statistics Canada has not been replicated for subsequent years, although the study did show ongoing year-over-year growth.
The overall impact of the new model has disrupted more than just an industry. Permanent accommodation on Ontario lakefronts, in ski areas, downtown centres and in residential neighbourhoods have been converted into overnight rental accommodation, which can deplete an already short supply of residential housing and displace permanent residents.
It also brings with it new traffic, noise and activity that is often unwanted to established neighbourhoods. Where push often comes to shove is when a rental is used for weekend-long parties attracting large numbers of people in areas historically used by families living within a community.
And there has been violence, too. In February 2020, three men in Toronto were fatally shot during a social gathering at a Queens Wharf condo used as an Airbnb. The murder-suicide prompted the online company to enact tougher restrictions; people under 25 without a track record with the company, for example, would no longer be able to rent entire homes in what Airbnb called a pilot project in Canada.
There have been other deaths. Earlier that month in Ottawa, an 18-year-old was killed at an Airbnb rental. A year later, two young women aged 18 and 20 were shot to death at a waterfront Airbnb in the Fort Erie area. The chalet, known as a loud party spot for out-of-towners, had been a longstanding source of concern for area residents. (A Scarborough man was later charged with two counts of first-degree murder, and two others were implicated).
Governments have fanned out with different control methods over the years. In Ontario, municipalities have tried a variety of approaches from outright bans to registration or licensing to bylaws limiting where short-term rentals can be located. Some cities permit a limited number in a prescribed area or limit the number of days they can be rented out. Enforcement of the rules can often prove challenging, and rarely is everyone happy with the result.
The Ontario Land Tribunal, a quasi-judicial body unique to Ontario that hears appeals of municipal decisions, recently reviewed a bylaw amendment in Oro-Medonte Township that tried to control short-term rentals and prohibit their operation in residential areas. The amendment, the chair found, was an overreach and it was revoked.
In his witness statement provided to the tribunal during the February hearing, Oro-Medonte Township resident Steve Hawryluk described his frustrations when the two houses next to him were used for short-term rentals. Each attracted 10 to 20 people with new bodies appearing every summer weekend and some weekdays. The house right next door had a revolving door of guests from the summer of 2017 until it was sold in October 2020.
People who come on the weekends and pay $750 a night feel entitled to do what they want.
There were fights, fires left unattended and fireworks set off on days they weren’t permitted, he wrote. The music and chatter pierced through the neighbourhood long after local residents had gone to bed and drones flew over neighbours’ properties.
He found both homes advertised on Airbnb.
One weekend, a cabin cruiser and two other boats appeared along the shore. He wrote that at least 50 people mingled between the property and the boats creating a constant din with shouting.
But the day a Toronto radio station rented the house two doors over for a “day at a cottage” with friends contest was “one of the worst and most flagrant violations of our right to peacefully enjoy our homes,” he wrote. Two small buses and a dozen cars delivered guests and a musician performed an afternoon concert on the deck. “The music could be heard more than a ½ km away,” he wrote. “The rock performer even joked during his performance about feeling uneasy about disturbing the neighbours.”
So far, the tribunal has released only an oral decision on Oro-Medonte’s bylaw amendment. The township awaits the chair’s reasons in writing, which may offer a road map on how the Simcoe County municipality—and every other community in Ontario—might come up with a reasonable solution.
In addition to the dispute in Oro-Medonte, the Ontario Land Tribunal has heard short-term accommodation cases involving Toronto, Ottawa, Hamilton, the Town of Blue Mountains, Ramara and Niagara Falls. Several municipalities are currently considering ways to control short-term rentals in response to complaints—with some finding that they are going to the drawing board a second time around in hopes of striking the right balance.
The Town of Innisfil has been struggling to come up with a way to balance what some see as pervasive overnight accommodations in homes with a growing cottage industry reaping economic benefits from visitors. During a spring meeting, it was pointed out that Friday Harbour stands apart as a destination resort with specific zoning, but that problems occur when homes in residential neighbourhoods like Alcona are rented out for a night or a weekend.
In the Lake Huron vacation community of Grand Bend and the wider Municipality of Lambton Shores, taking in Port Franks and Ipperwash Beach, those wishing to operate overnight rental properties must pay a $500 annual licensing fee. A new bylaw passed June 6, developed after months of debate, also limits the number of visits to 10 adults per unit, imposes a minimum of two parking spaces and requires $2 million in liability insurance. The restrictions won’t apply to owner-occupied properties with just one rental unit on the property.
A demerit point system could lead to the suspension of an owner’s short-term rental licence and a person responsible for the property must be designated.
The approach used by the Town of Blue Mountains has been a work in progress for well over a decade. The holiday community overlooking Georgian Bay began its control of holiday rentals in privately owned condos and chalets with an interim control bylaw in 2008, followed by a formal bylaw. A licensing regime to regulate them was recently revamped.
Given the volume of visitors to the town, which is home to the Blue Mountain ski resort and a series of private ski hills along the Niagara Escarpment, the Town of Blue Mountains was one of the first Ontario municipalities to develop a structure to control short-term accommodation, explained Will Thomson, the town’s director of legal services.
“More and more people are dealing with this,” said Thomson. “I think we’re on our way to making it a fair system…I wouldn’t call it perfect, we’re always trying to improve it, make it better, more fair.”
The latest iteration includes the development of an administrative monetary penalty system—an internal adjudication process. It is a mechanism to enforce bylaw compliance run by the municipality as an alternative to the conventional provincial offences court process, which can become overwhelmed with cases. “This one is a little quicker, a little more municipal specific,” said town councillor Rob Sampson. “The penalty could actually attach to the tax role, a huge advantage to the municipality.”
Some municipalities had used that power initially to deal with parking tickets, then expanded it to address other issues. For the Grey County town, it made sense to bring its licensing system into that regime as a way to control the town’s approximately 300 licensed short-term rentals, which are typically privately owned condos and chalets. There are another 1,000 or more commercial units, related to the ski resort, which have centralized management that are not licensed and are controlled through zoning.
“The issue is where we have a traditional residential zone… that’s where we have the friction,” explained Sampson.
The adjudication program relies upon externally appointed hearing and screening officers and is administered by town staff. The related costs are expected to generally be covered by fines and penalties that can be up to $2,500 for those operating a property without a licence.
Last fall, the town created an interactive map to show the local properties currently licensed as short-term rental units following the introduction of new zoning amendments. “We have quite a thorough licensing system which starts with zoning permissions, so you have to apply,” said Thomson. “It manages property inspections, fire inspections, ensures properties are up to a certain standard.”
The town also requires parking plans, and that the property be maintained and subject to the town’s other bylaws, including noise. A “responsible person” must also be designated as a contact if issues and complaints arise, in hopes they can be mitigated. A two-year licence to operate a short-term rental runs around $2,300 in the Town of Blue Mountains and is designed to cover the cost of the program.
Tiny Township, a long-time cottaging mecca which takes in significant Georgian Bay waterfront, is also mulling over control options. They include imposing minimum stays of six days, putting a limit on the number of days any single property can be rented out during the course of a year, and imposing a blackout period during which no properties can be rented. Another suggestion was to cap the number of homes available for short-term rentals to 300, or three per cent of the total number of homes in the township.
That worries Jordan Schinkel. His young family purchased a cottage with water access in 2015 with an eye to one day retiring there. When they aren’t using the property, they rent it out to young families, for which the cottage is equipped. He says he imposes rules, rents to only young families for no fewer than five days, and vets potential renters.
Rules like reasonable licensing fees, he said, are palatable, but he doesn’t want to see strict controls that impede his family’s ability to see a return on their investment. “My goal is to run a short-term rental so that I can actually afford the property,” said Schinkel. “So I can provide vacation experiences for young families like I had when I grew up. And we build connections with people that rent our place and most of the time we get repeat people.”
There are many like Schinkel who rent out their own home, cottage or condo. There are also organizations that manage rentals.
Jayne McCaw grew her small rental management business into a thriving enterprise. Jaynes Cottages has grown beyond its roots and now operates close to 300 properties across Ontario, many in the Simcoe-Muskoka area. The patchwork of regulations from community to community is frustrating, she said. But what she finds most difficult are the municipalities that prohibit them altogether, stifling economic opportunities.
“Vacation rentals have become one of the top choices for accommodation,” said McCaw, pointing out its contribution to the local economy. She says her company alone has generated $50 million to her area of operations.
“It just is really sad that for an industry that’s been operating for generations and generations, without any problem, because of a number of bad owners that are allowing disruptive guests to rent their properties without an established set of rules, it is hijacking the whole industry and this whole ecosystem that has been operating for years.”
Members of the Ontario Cottage Rental Managers Association say that good operators vet their guests, lay out the rules and expectations and that they enforce them, ejecting those who fail to abide by them. They argue that the approaches adopted by some municipalities to control short-term rentals paint good and bad operators with the same brush. And those operating province-wide are left to navigate regulations that have no consistency from one municipality to another.
McCaw welcomes a more regulated industry, like hotel and resort operations, that includes licences and improved bylaw enforcement. “The province and the Ministry of Tourism have to get more involved. Individual townships and these individual rules by townships have to be preempted by the province,” she said. “I think it absolutely should happen in Ontario.
“We are a bonafide accommodation choice now… And we should be treated that way.”
Airbnb did not respond to requests for an interview about the various initiatives the company has taken in Canada to control activity at rentals or what measures it would like to see governments take. Instead, spokesperson Matt McNama sent an email suggesting restrictions could dampen the economic benefits of tourism.
“We’re committed to working with municipalities across Ontario, and Canada, to develop smart and sensible regulations. Hosting provides extra income for residents trying to make ends meet at a time when cost of living has never been higher,” he wrote. “As the economy gets back on track, it’s also important to consider the vital impact visitors have on our communities, including an influx of support for small businesses still reeling after two years of pandemic.”
Although Ontario hasn’t formally approached control of short-term rentals on a province-wide level—leaving it instead to municipalities to regulate—other provinces have stepped in, laying down guidelines. In Quebec, for example—where there was concern that Airbnbs were occupying 31,000 or 1.5 per cent of already in-demand residences in Montreal, despite the municipality’s sometimes aggressive attempts to control short-term rentals—a registration process was imposed in 2019.
At about the same time, 1,980 short-term rental hosts in Halifax’s unregulated market earned $30.9 million in revenue during a 12-month period, according to a 2019 report by the Urban Politics and Governance research group at McGill University’s School of Urban Planning. They found the vast majority of those properties were listed on Airbnb. Nova Scotia is now in the process of expanding a registry system introduced in 2019 for short-term rentals, to include rooms in homes that are being rented out. That is expected to provide a more comprehensive picture of short-term rentals in the province, considered helpful to municipalities.
The Union of B.C. Municipalities called on the provincial government this spring to regulate short-term rental accommodations with a framework similar to the one used for ride-hailing.
Innisfil, ultimately, has distinguished between bed-and-breakfast-type operations where the owner is onsite as opposed to whole home rentals, it calls ghost hotels, where the owner does not live on the property—which is not permitted. In response to complaints about party houses, the town also announced in June that enforcement staff extended operating hours to 11 p.m. on weekdays and 2 a.m. on Fridays, Saturdays and holidays until after the Labour Day weekend. Pre-existing noise, fireworks and parking controls will be part of those efforts. Town staff will also track enforcement with expectations of reporting back to council next spring.
That approach provides Symon Zucker some hope that tranquility will be restored to his little parcel of peace on the lake. But so far, that hasn’t happened. Visitors have already started to descend on the neighbouring property, leaving Zucker to set out in search of other solutions.
Marg. Bruineman is an award-winning freelance journalist based in Barrie who focuses on justice and human interest stories.
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