How London's Short-Term Rental Bylaw is Protecting the Housing Market

Short-term rentals have been a hot topic in many cities across Canada, but in London, Ontario, the city has taken proactive steps to protect its housing market. City hall's bylaw director, Orest Katolyk, asserts that the short-term rental bylaw, implemented in 2022, has been effective in safeguarding potential permanent homes and alleviating some housing challenges.

According to a recent report from Statistics Canada, short-term rentals, typically listed on platforms like Airbnb for fewer than 30 days, have a marginal impact on most communities. In tourist-heavy areas like Whistler, BC, they're more prevalent, but in cities like London, they constitute less than one per cent of the total housing stock. To be precise, only 308 of London's 174,968 homes were identified as potential permanent homes being used as short-term rentals in 2021.

Despite mixed empirical results on the impact of short-term rentals on housing availability, there's been a notable increase in short-term rental listings across Canada. The report indicates a 60 per cent increase between 2017 and 2023, with an 80 per cent rise in listings that could serve as permanent homes.

In London, the 2022 bylaw mandates that short-term rentals must be licensed by the city, charge a four per cent hotel tax, and only be rented out by the property's primary resident. This measure was designed to curb the nuisance of party houses and address the housing shortage.

Katolyk is confident in the efficacy of the bylaw despite some complaints from property owners. He mentions that some landlords have either sold their properties or reverted them back to long-term rentals. As of now, London has 251 licensed short-term rentals, with 40 more under review and 20 applications denied.

To ensure compliance, city hall is employing AI tools to sift through hundreds of short-term rental platforms, identifying properties that either need to get licensed or stop their short-term rental operations. So far, 165 fines totaling $82,000 have been issued under the bylaw.

Katolyk believes that London has a good handle on the situation, with the bylaw proving to be a balanced approach in managing the tension between property rights and housing availability. While landlords have taken issue with the regulations, it seems the city is managing to strike a balance that other municipalities might look to for inspiration.