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STR owners in Ramara see red over ‘unprecedented’ tripling of fees

In Council Watch
Mar 1st, 2023

Council approves fee in licence hike from $1,000 to $3,000 per year; ‘The fee increase is sizable enough to amount to a de facto prohibition on ownership,’ says lawyer
From OrilliaMatters DaveDawson

Despite the vocal objections of seven local short-term rental (STR) owners, Ramara Township council approved an “unprecedented” 200 per cent hike for STR licence fees Monday night.

As a result, owners of STR units will have to pay a $3,000 annual licence fee — up from the $1,000 fee that was enacted in 2020, when the township first tackled the issue.

More than one local STR owner said that hike makes Ramara’s fee the highest in Ontario and, possibly, Canada.

Local STR owners were furious over the hike and were frustrated by what they called a “lack of transparency,” a lack of justification and insufficient time to respond to the proposal, which they learned of 12 days earlier.

George Karaolis was one of six people who made a deputation to council Monday night; two others spoke at the open forum at the beginning of the meeting.

Karaolis said Ramara, since 2020, had “one of the most fair STR licensing regimes in the country,” noting it addressed the complaints from residents and addressed the safety of guests.

He said even though the rate is “among the highest” in Canada, “it’s one of the very few in the country that actually works.”

He asked council if tripling the fee was an “attempt to eliminate” STRs in Ramara, noting there have been “very minimal” complaints since 2020.

“We will no longer stand by and watch as a small group of residents try to drive our STRs out,” he said.

He also noted staff had previously suggested a more modest hike of $250 to $500 annually and asked how council arrived at the $2,000 increase.

Council did not answer questions from those making deputations.

Brian Fairman, also a licensed STR owner, noted inflation has an “ugly grip on us” and said now is not the time for an increase.

In addition, he was upset to only learn of the proposed increase last Wednesday, adding “it’s way too quick,” and pleaded with council to give STR owners more time to respond.

Farhad Shirzad, whose family owns a cottage on Lake St. John, said experiencing cottage life is a “Canadian dream” many can no longer afford. He said STR units allow people to experience that dream.

He said the current $1,000 fee is already “stressful” on STR owners, adding a “200 per cent increase doesn’t make sense.”

Aaron Little, who has had a family cottage in Ramara for 23 years, said his home is only rented out a few times each year. He said the current fee is “already burdensome.”

He worries the “excessive” new fee will force people like him to sell, opening the door for full-time Airbnbs to move in.

Robert Charlton told council most local STR owners are “just family men and women” and not big corporations. He said there is, among many, this “false notion that STR owners are making some runaway fortune.” He said, in most cases, that is not true.

The final deputation was from Conner Harris, a Toronto lawyer hired by some of the local STR owners.

He called the licensing fee “excessive” and said the result could be many might not be able to continue to operate.

He said “a lack of transparency” and insufficient notice of the proposed hike was “neither fair or reasonable” to local STR owners.

Harris also questioned the size of the increase, noting a “seeming lack of reasonable nexus” between the increase and what the program costs the township.

“The fee increase is sizable enough to amount to a de facto prohibition on ownership,” he said.

He said the amount of the increase compared to the costs of the program could “render the proposed fee increase outside the jurisdiction of the township” and, as a result, may be “unsupported by legislation under the Municipal Act.”

Council asked Jon Popple, the township’s manager of community standards, recreation and facilities, to provide justification for the increase.

“We looked at staff time to enforce, administer and issue the licences under the STR program,” Popple told council.

He said 70 per cent of his daily workload is related to STRs, which equates to a cost of about $88,000 annually.

Popple said the township’s senior bylaw officer “spends about 50 per cent of his day addressing STR issues” that include enforcement, online monitoring, hearings and providing advice and information. He said the price tag for that time is about $44,000.

In addition, Popple said the township’s two bylaw officers spend 50 per cent of their time working on STR issues; that cost is about $83,000.

He said the four seasonal bylaw officers spend about 90 per cent of their time dealing with STR issues, at a cost of about $38,000.

There are also computer programs related to enforcement that cost about $22,000 annually, Popple explained.

In total, that adds up to $276,000 per year, without factoring in overhead costs such as fuel, maintenance on vehicles, office space, computers and other costs, he explained.

In terms of revenue, there are 81 valid STR licences and 13 are pending review. He said in 2023, staff processed 31 licence applications, 22 of which were new and nine were renewals.

“We are seeing an increase which is directly related to the proactive enforcement” of STRs, Popple said.

He said the 94 licences would generate $94,000 in revenue under the current cost schedule. Increasing the rate to $3,000 would up the revenue to $282,000, a “little more” than the projected cost of $276,000.

Popple also provided statistics about complaints related to STR properties.

in 2022, bylaw officers responded to 455 complaints that were investigated, and 153, or 33.6 per cent, of the complaints were STR related, he said.

In 2023, to date, there have been 100 complaints and 34 are STR related, he said.

Coun. Sherri Bell was the lone councillor to comment on the issue, noting time of other staff, such as those in the clerk’s department, was not factored into the program’s costs. She also noted some bylaw complaints related to parking and fireworks may also be STR related, but not accounted for in the numbers.

Deputy Mayor Keith Bell, who chaired the meeting in the absence of Mayor Basil Clarke, said the goal of the increase was to ensure taxpayers aren’t on the hook for costs related to STRs.

In the end, council voted in favour of the increase. Only Coun. Dana Tuju did not support the increase. Coun. David Snutch did not participate in the debate or vote after declaring a conflict of interest because a family member has an STR licence.

Fairman told OrilliaMatters he and other STR owners are “disappointed” with council’s decision. He said the group will meet to determine how they might respond.

He said he was frustrated he couldn’t ask council questions and thinks the impetus for the fee hike is related to isolated issues concerning the many STRs in Lagoon City.

“The lack of transparency is unconscionable,” he said, adding he would like more “proof” of justification for the “unprecedented” increase.
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