City moves to crack down hard on unlicensed short-term rentals

Sault Ste. Marie officials are preparing to pull out all the stops in 2024 to address what they see as massive noncompliance with licensing and tax obligations among owners of short-term rental properties.

City councillors will be told on Tuesday that only 16 local properties have been licensed since Sault Ste. Marie decided in September, 2022 to regulate short-term accommodations listed on Airbnb and similar web platforms.

A report prepared by deputy city clerk Madison Zuppa says there were 158 active short-term rental listings in the city last month.

Sault Ste. Marie charges a four per cent municipal accommodation tax (MAT) on all accommodations rented out for fewer than 30 consecutive days, including hotels, motels, motor hotels, lodges, inns, resorts, bed and breakfasts or any other place an accommodation is provided.

Zuppa says the city collected $5,622 in MAT taxes from short-term rental providers from January to July of this years.

If all current listed short-term properties were licensed, the city should have received about $47,000, she says.

The MAT tax generates funding for tourism promotion and development within the city.

Among short-term properties licensed so far in the Sault, 13 are for entire dwellings and three are for private rooms.

Among short-term rentals listed on web platforms, 112 are for entire dwellings and 46 are for private rooms.

Forty-four listings are apartments and 114 are houses.

"An additional 19 entire dwellings have applied for a licence and are at various stages of the process," Zuppa says.

"A number of factors have delayed the issuance of some licences, including missing information, outstanding building permits, or inadequate insurance."

"Building division staff have completed inspections of short-term rental properties and found some with outstanding building permits or the creation of additional dwelling units without the benefit of a building permit. No licences will be issued until these matters are resolved.

"Fire Services has advised that several of the properties inspected did not have working smoke or carbon monoxide alarms. This reinforces the requirement for these inspections to create greater community safety," Zuppa says.

One thing preventing better enforcement of rogue short-term rentals is the fact that rental apps don't specify specific addresses.

But city officials are determined to find those addresses.

They're planning to pay $15,000 to get them from a third-party service, allowing them to launch a "proactive" enforcement blitz in 2024.

City staff will push during upcoming budget deliberations for two new building inspectors to help in the crackdown on unlicensed short-term rentals.

On Tuesday, they'll ask city council to approve these bylaw changes:

• a requirement for short-term rental hosts to include their municipal licence or licence number in any and all advertising. This will allow renters and enforcement staff to easily identify licensed properties
• a whopping increase of the three-year $50 licensing fee to $500 effective January 1, 2024. Building and fire inspection fees would be additional. Renewal time frame is recommended to remain at three years, with a renewal fee of $500 in addition to required inspection fees
• change the words 'commercial liability' insurance to 'appropriate' insurance. This will allow more flexibility for owners to work with their insurance providers to satisfy the requirements of the city. This includes $2 million liability; adding short-term rental as a property use; and having the city named as an additional insured for commercial properties. This is intended to keep the burden of risk closest to the parties most likely to create the load

Because of the long weekend, this week's city council meeting will be held on Tuesday.

It will be live-streamed on SooToday starting at 5 p.m.