It will soon be illegal for Hamilton homeowners to rent out their properties short-term if they don’t actually live there.

Councilors passed a bylaw on Wednesday and will begin enforcement in June, with the hope it will free up housing stock for longer-term rentals for Hamilton residents.

The bylaw will also ban commercial operators with multiple properties listed on sites like Airbnb.

Those who rent out their own home or a spare bedroom for up to two months at a time will be required to obtain a license and provide proof it’s their principal residence.

The city hopes for new rules based on regulations implemented by other cities like Toronto, will stop people from buying investment properties for short-term rentals, according to a staff report from earlier this month. The bylaw comes as Hamilton faces an affordable housing crisis and rents a skyrocket across the country.

Councilors passed the new bylaw 13-3.

“We’re trying to increase the affordable housing supply,” Ward 2 Coun. Cameron Kroetsch told CBC Hamilton after the vote. “We are trying to bring more units back to the long-term rental market.”

A similar bylaw in Toronto saw a dip in short-term rentals

A similar bylaw in the City of Toronto came into effect in 2019. It also only allows short-term rentals in an operator’s principal residence, and has seen some success in freeing up rentals.

The number of dedicated short-term rentals decreased by 61 per cent in 2020 — from 8,300 to 3,160, according to preliminary data from McGill University. The researchers also found more than 3,400 former Airbnb listings that have been posted as long-term rentals on other sites.

Toronto has laid 131 charges against operators violating the bylaw, the city reports. It will release more information about compliance at the end of this year, a spokesperson told CBC Hamilton this week. Meanwhile, staff continue to monitor short-term rental sites, investigate complaints and work with companies to identify and remove listings without valid registration.

At a Hamilton planning committee meeting last week, local renter Emily Power presented her own research into just how many units are being rented out on a short-term basis across the city.

The urban planning graduate student at the University of Toronto said there are about 1,300 short-term rentals in Hamilton and 80 per cent are for entire homes rather than shared spaces.

She estimated regulations could return upwards of 650 family-sized apartments to long-term rental stock.

More than a dozen other delegates voiced their support for being allowed to continue to rent out parts of their homes on a short-term basis. Retiree Norah McIntyre rents out a ground-floor suite in her beach strip home through Airbnb and says it’s how she affords to live there on a fixed income.

However, in recent years she said she’s watching investors buy houses on her street and renovate them to be used exclusively as short-term rentals, housing 10 or more people at a time, and is in support of curbing the practice.

“These are homes that are no longer available for someone to purchase as a family,” McIntyre told the committee. “It’s changing the nature of the community. I no longer have neighbors I can rely upon.”

The city is hoping that if property owners rent out their own homes, they’ll be less likely to allow unwieldy parties — an issue that has plagued the short-term rental industry.

Hamilton police, for example, broke up a gathering of 150 people at a house listed on Airbnb at the height of the pandemic in 2021. The year before, Airbnb suspended more than 40 listings across Ontario for hosting parties.

Short-term operators have until May 31 to apply for a license and pay a $70 application fee plus other fees depending on the type of unit, according to the report. The online platform companies will be required to pay a one-time $5,000 fee and then an annual renewal fee of $60.

City staff will work with the province to set fines for not complying, said a spokesperson. Toronto’s fines range from $1,000 to $300 depending on the offense.

Hamilton said he hoped the money collected would cover the costs of administering and enforcing the program.

Vacant homes to be taxed

On Wednesday, the council approved another program aimed at increasing housing supply — a vacant unit tax.

People who own a residence that’s been vacant for more than 183 days the previous year will be required to pay the city one per cent of their property value annually, said a staff report at the general issues committee meeting in 2022.

The city expects about 1,135 properties to be required to pay the tax, generating $3.3 million in revenue over six years, the report said.

Count. Nrinder Nann, who represents Ward 3 and voted for the tax, said this is one of the many tools that councillors are using to address the affordable housing crisis.