Cottage-country municipalities, rental owners respond to federal government’s rumoured plans to limit STRs

blue houses and one big red house in the middle Photo by deepadesigns/Shutterstock

Some cottage country municipalities in Ontario have mixed responses to the federal government’s rumoured plans to incentivize municipalities to introduce short-term rental regulations. One idea is to limit the number of short-term rentals in the hope that it would free up properties for long-term rentals, thus helping to alleviate the country’s housing crisis.

Since Tiny Township introduced STR regulations in August 2022, Mayor David Evans says the number of legally permitted STRs in the township has been reduced to 300. He says they had an estimated peak of 600 STRs during the pandemic, which led to tens of thousands of emails to the township from residents citing concerns about tenant safety, and loss of their tight-knit communities.

“It was a huge issue. In some locations, there were more STRs on a street than there were seasonal and permanent residents,” he says. With the new bylaws, STR-related emails “have dropped at least 75 per cent.” Overall, Evans says, the community has been very receptive. 

While he believes that Tiny’s regulations and licensing practices could serve as a positive framework for other municipalities, he’s unconvinced that limiting the number of STRs would improve Tiny’s long-term rental market because most of their STRs are seasonal and not designed for year-round use. 

“Our process ensures that renters and owners are safe and that the community is safe from liability,” he says. “Unfortunate incidents (like with) Airbnbs in Montreal highlight the need for regulations and limits if only to understand how pervasive the issue is.”

Mark Lemkay sits on the Muskoka Lakes Chamber of Commerce board, and is director of sales for Jayne’s Luxury Rentals. He echoes Evans’ argument that limiting STRs would not result in more long-term renting inventory in Muskoka Lakes. He says most of their STR properties are secondary seasonal properties owned by cottagers, so they would likely stay vacant if they weren’t rented out by local agencies.

“We are not cannibalizing units that would otherwise be defined as affordable housing,” Lemkay argues.

Other municipalities, such as Seguin Township, have decided against regulations because they don’t believe limiting the number of STRs would free up properties for long-term rental housing. Seguin’s chief administrative officer, Jason Inwood, says the township instead introduced heftier fines for noise and nuisance infractions, based on common concerns they heard from residents.

“We’ve seen a positive change with respect to the number of complaints,” he says. “When we receive one, we’re not repeatedly attending the same site.”

Inwood would not comment on the federal government’s rumoured plans. He says council would be receptive to provincial or federal legislation, but that any solutions would have to reflect the specific needs of the community. “Being in the heart of cottage country, our rental issues or challenges are different from what a big city in Ontario may be facing,” Inwood explained.

Vacation resorts are concerned that they will get lumped in with STRs

Lemkay says that because the housing markets in areas like Port Carling and Bracebridge are seasonal, they would lose tens of thousands of vacationers a year with STR property limits. He argues this would drive down profits for tourist-related businesses, and put many people on his 75-person rental team out of a job.

Norah Fountain, executive director of the Muskoka Lakes Chamber of Commerce, says there is a unique vacation rental market that would require different regulations than for STR properties.

“Well-managed vacation properties can’t be lumped in (with STRs),” Fountain stated in an email to Cottage Life. “Should their use be reduced by municipalities or short-sighted legislation of any type, it could do irreparable harm to our economy that is still highly seasonal dependent.”

Parry Sound Chamber of Commerce representative Chris McDonald says limiting the number of STRs, which make up around 10 per cent of Parry Sound’s properties, would have little impact on the tourism economy given the high presence of resorts. He believes municipalities can enforce existing noise and environmental bylaws and require higher standards for STRs to address common complaints.

“If there were higher standards, there might not be as much animosity for people renting out short-term because they would have to play along with the same rulebook as their neighbours,” he says.

STR advocate worries federal intervention could encourage municipalities to introduce ‘draconian’ restrictions

Responsible Hosts of Tiny representative and STR operator Glen Sloutsky calls the regulations Tiny implemented in 2022 “draconian”. He believes the township could use the federal government’s incentives to justify maintaining these bylaws.

Tiny now requires STR property owners to apply for a $1,500 license that permits 92 days of annual operation, with a maximum of 300 licenses available to the community at once. The township also provides a private complaint hotline so residents can report STR bylaw infractions as part of a demerit system that causes property owners to lose their licenses after 15 points.

“They basically reduced the rights of people to rent out their properties to an unreasonable limit,” Sloutsky says. “The bylaws have created a ‘ratting out’ culture in Tiny. Somebody who either chooses not to get a license because it’s overreaching, or who has a license and operates outside the rules, will be targeted by their neighbours.”

Mayor Evans says the township has only received 280 license applications, 220 of which failed initial safety inspections. He says he’s aware of the ‘ratting out’ culture, but that it only forms a fraction of the community.

“Some people have said, ‘They’re watching me; they make complaints because I have too many cars in a parking lot,’ but I don’t have any hard evidence to either corroborate or deny it,” he says. “We investigate if there is a valid complaint.”

Responsible Hosts of Tiny has hired legal counsel to appeal the 2022 zoning bylaw amendments, according to Evans. “The appeal has not been finalized,” he says, “but we believe it will be very soon, to our advantage.”

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