Real Estate

Should Ontario regulate short-term rentals? Here are the pros and cons

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Municipalities from across Ontario have taken different approaches to regulating the short-term rental industry, and now, with many local governments taking action, some are wondering if it’s time for the province to get involved. The move to provincially regulate short-term rentals wouldn’t be entirely unprecedented—Nova Scotia and Prince Edward Island have both implemented their own form of short-term rental regulations. 

Jelena Vuckovic, a short-term rental owner in Tiny, Ont., says she would like to see short-term rentals regulated at a provincial level as a way for the government to eliminate unnecessary confusion between jurisdictions.

Currently each municipality has the ability to regulate STRs in any way they see fit and regulations range from complete bans of STRs, to no regulation at all,” she said, in an email. Ontario could implement province-wide short-term rental health and safety standards to fill in regulatory gaps among municipalities, says Vuckovic. 

Steve Pomeroy, a senior research fellow at the Centre for Urban Research and Education at Carleton University, says there could be pros and cons to Ontario introducing province-wide short-term rental regulations. 

The main benefit, Pomeroy says, is that the province would have stronger authority to back up the legislation. “If someone is contravening a provincial law, the recourse is usually a little bit stronger than it would be for breaking a municipal bylaw,” says Pomeroy.

Provincial regulations could also ease the financial burden for municipalities, says Pomeroy. For instance, the province could absorb the responsibilities and costs of operating a short-term rental licensing program. While local governments typically charge fees to offset the cost of licensing programs, Pomeroy says he suspects the revenues generated by licensing fees often don’t cover the cost of running and enforcing the program itself. 

While the potential for the province to absorb responsibilities from the municipalities exists, Pomeroy says the inverse has been more common of late. “The provinces are downloading responsibilities to municipalities, particularly Ontario,” he says, noting that most municipalities lack the financial resources to take on extra duties. 

A lack of resources among local governments means enforcement of short-term rental regulations could still remain an issue, regardless of the province’s involvement, says Pomeroy. 

“It’s not the kind of thing we want to have the RCMP or provincial police coming around enforcing. It’s a bylaw enforcement kind of function, which tends to be staff at the municipal level,” he says. “The challenge really for the municipalities is having the resources to do it.”

Nova Scotia currently operates a provincial short-term accommodation licensing program. The province works with private hosting sites to ensure compliance and collects the data for municipalities to use while enforcing their own short-term rental and zoning bylaws.

Vuckovic says she thinks the Nova Scotia system would be fitting for Ontario, and could potentially take a load off overburdened municipalities. “I honestly think that’s gonna solve so many problems,” she says. “Not just for us, but for the smaller townships and towns. They don’t have the money, they don’t have the manpower to be doing this. And honestly, they should not be doing it themselves, this is too big.”

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