London plans to require business licenses for short-term rentals on Airbnb and similar sites
It could soon become more complicated for Londoners to list rooms and houses for rent on sites like Airbnb and Vrbo.
In a new presentation to the town hall’s housing advisory committee, the municipal administration proposes to create a new category of operating permit for short-term housing (STA).
Councilor Shawn Lewis has been pushing for new rules to govern short-term rentals in 2019.
Lewis worries that some real estate investors are buying homes and condos and then keeping them empty except when they’re rented out short-term.
This potentially lucrative practice, he says, takes inventory out of the housing and rental markets, driving up prices.
Some pitches also become a nuisance for neighbours.
“The ones that are used for investment income in the form of rentals are the problem properties in the neighborhood,” says Lewis. “They are rented out and become the weekend party house.”
The presentation prepared by City staff admits that the number of mainly vacant houses/condos/apartments in London offered for short term stays is unknown.
However, a recent review of related websites found around 600 listings in London, 69% (around 400) offering the whole house or apartment.
“They’re only used on weekends, and they’re places that could be used as long-term rentals in a market where we have a housing crisis,” Lewis says.
City staff suggest the solution may be to create different permit requirements for different types of landowners.
Locations occupied by the owner or tenant would require the new STA business license after meeting conditions which may include fees, a building inspection and a fire inspection.
While hosts offering short-term rentals of a location that is not their primary residence, should qualify for the more comprehensive rental license required by landlords who rent to long-term tenants.
“It’s like an investment property, but in our own home,” says Rob Hodson.
Hodson and his wife built their new home with two entries so they could supplement their income with short-term rentals offered through Airbnb.
While he doesn’t judge those who buy second homes for short-term rental, he didn’t want to contribute to the housing crisis.
“I understand how they take residential life away from inner city dwellers,” Hodson says.
Lewis would also like to level the playing field for hotels that currently have to charge a municipal room tax of 4% per night.
“[I want it] include the municipal lodging tax,” he says of any future council decisions. “It’s a matter of fairness. If they [STAs] operate as a hotel, they should pay the hotel tax.
Hodson says that’s a reasonable expectation, but wants to make sure the focus remains on the housing crisis.
“I’m all for that, as long as the city mandates that some of that tax go to affordable housing.”
The Housing Advisory Committee will receive the presentation of the permit proposal at a meeting next week.
A public meeting will be held by the Council’s Community and Protective Services Committee to gather feedback over the next few months.