Councillors in Kitchener have begun to consider a new potential bylaw that would regulate, licence, and monitor Airbnb units and other short-term rentals (STRs) in the city.
The motion was presented to the Kitchener Finance and Corporate Services committee, which details potential modifications that were previously brought forward to council.
This included a removal of the cap on the number of days STRs can operate each year, a tiered licensing system, a streamlined application process, reduced application fees, and more.
Although the possibility of regulations coming from the city has now led to pushback from those STR owners and operators, who voiced their opinions to the committee, particularly around how the new changes would require them to be licensed by the city.
An STR operator shared one of their biggest concerns is how the licensing requirement affects the insurance. They said under the indemnity clause, insurance companies can treat short-term rental owners as commercial businesses, despite owned a home and not an entire apartment building.
Indemnity is defined as the security or protection against a loss or a financial burden, something insurance companies look closely at when figuring out who to collect from under their coverage.
Those short-term rental owners are saying the inclusion of the city licensing them means the operators are having to purchase commercial insurance over what they were previously using, treating them closer to that of a food truck or beauty boutique.
Anne Lavender, the owner of 3 STR units in the city, said that increased cost in pricing is primarily due to these insurance companies not being able to target cities in the event of damage, due to the fact that they are listed under the unit.
“What if the city were digging up the road and the sewer system was damaged, and there was a backup of sewage in my house? I would not be able to hold the city responsible. If a city tree branch falls on my guest, I would not be able to hold the city responsible because the city has been indemnified,” Lavender stated.
City staff held two in-person information sessions with the public, in tandem with the City of Waterloo, looking to gather public input on STRs in their cities in late 2024. The city also released a survey, which came back with 581 contributors, 82 per cent of whom said they were renters or residents who lived in the general area of a short-term rental unit.
Staff said one of the primary reasons for the bylaw would also be to have better access to the location of those STRs, along with better tracking and monitoring of ongoing standards.
The collected numbers showed that residents were in support of balanced licensing regulations, with those figures showing a split on seeing STRs as a business, with 50.9 per cent saying they viewed them as such.
The mention from multiple rental owners of just how steep the increases in insurance coverage would be led to further discussion from members on the committee, with Kitchener Mayor Berry Vrbanovic saying it was numbers that hadn’t been heard about from city staff.
City staff did mention that they had been in communication in the past with various insurance companies, looking over thousands of similar contracts. They noted that the increases aren’t from the indemnification, but rather the overall risk that comes along with owning a STR.
Other committee members continued to mention the overall burden that STRs are having on their local communities, with some saying they continue to contribute to the housing crisis and a general lack of affordability in the housing market.
Ultimately, the committee decided in a close 6-5 vote to delay the decision of incorporating the bylaw. Instead, it will be pushed back to the final city council meeting before summer break. That meeting is currently slated for June 23.