County inches closer to short-term property rental regulations

By James Matthews

Local Journalism Initiative Reporter

After about a year in the making, Haliburton Council got a look at bylaws that guide the regulating and licensing of short-term property rentals.

Stephen Stone, the county’s planning director, walked council through those draft bylaws and possible next steps to implementation during its June 28 meeting.

Council agreed to revisit the issue at some point in the future, but not until after much discussion.

It’s been a long road indeed. A sense of that lengthy process is in the fact that you’ll read almost 300 words of recap before you get a single new quote.

The previous county council hired consultant J.L. Richards (JLR) to look into options on how to govern short-term rental properties. A subsequent report provided insight into policies and regulations of similar sized municipalities.

Comparison practices offered a framework of options for the county’s own possible regulations and means of licensing.

Council in October 2022 considered a staff report titled Haliburton Short Term Rental Review Final Update. Included in its appendices were the JLR options report and draft bylaws.

The first was a draft registration bylaw which would require STR operators to register their properties in the near term in order to determine the magnitude of this type of business activity on Haliburton’s lakes.

The second was a draft licensing bylaw which had the effect of regulating STRs over the long term.

The previous administration received the consultants final report after considerable discussion as to whether the regulation of STRs should be the responsibility of the four townships or the county.

Following various updated reports and more directions to staff, registration and licensing bylaws were refined.

In February, the law firm of Aird Berlis LLP was retained to provide council with a legal opinion on the functionality of the draft registration and licensing bylaws. They presented their legal opinion with respect to mechanics of implementing the draft short-term rental bylaws on May 10.

The solicitor authored a further legal opinion which was considered in June 14.

Aird Berlis LLP billed the county $18,418 for the work.

When council initiated the study, a number of municipalities were already engaged in regulating short-term rentals, Stone said.

“Since then, there’s been a number of third-party services arising to help assist municipalities in rolling out the program and regulating the program,” he said.

Those are monitoring-type services that would work hand-in-hand with municipal staff, he said. Basically, they’ll pinpoint where the short-term accommodations are within a municipality based on those property’s advertising.

The most recent information the county has indicates there are close to 1,500 short-term properties for rent in Haliburton County. Third-party service providers will engage those operators, inform them that short-term rentals are now regulated by a municipality within the county and they need to be licensed.

Those third-party service providers will ensure compliance to regulations about bedroom restrictions, fire alarm performance, and septic system effectiveness.

“From a monitoring perspective, it takes the burden of responsibility off of municipal staff,” Stone said. “It doesn’t take them out of the administration side of things.”

He said the service is more of a partnership with the municipal staff when it comes to bylaw enforcement.

Regardless of whether the short-term rental program is administered at the county level or the municipal level, there needs to be an effective inspection program, said Michael Rutter, the county clerk/CAO.

“Almost like an audit process,” he said.

Without sharing specific prices, Rutter said the cost of the third-party service would “be significantly less than the fees generated from the licensing program.”

Further, the third-party service would ensure somebody is on hand to respond to late-night complaints about neighbours having large parties.

“Bylaw enforcement staff would be aware of it and then they can follow up at a later date,” he said.

Councillor Murray Fearrey, the mayor of Dysart, said he’d like to see the county council pursue the third-party service.

“I think it’s got a lot of possibility,” Fearrey said.

Coun. Cecil Ryall, the deputy mayor of Highlands East, said property inspections could be tied into a demerit points system.

“You want to earn an inspection, just do it wrong,” Ryall said. “We will make sure that you’re inspected. That’s kind of an incentive to be compliant.”

An owner who gets a demerit may be inspected. Inspections are at the discretion of council, he said.

“If you don’t want to follow the rules, we’ll spot-check to make sure that you do,” Ryall said.

Coun. Bob Carter, Minden Hills’ mayor, said one thing that he absolutely insists on is that no taxpayer money goes toward finding the program.

“This program should be totally funded by those who are the short-term rental folks,” Carter said.

Rutter said if there were 1,300 active rental properties that pay a $500 licensing fee. That would generate $650,000. And, he said, the third-party service cost of which he’s aware is pegged at less than $100,000.

“So that would leave a significant amount of money left,” he said.

Fearrey asked if an accommodation tax will be applied to short-term rentals.

Warden Liz Danielsen, the mayor of Algonquin Highlands, said that’s putting the cart before the horse.

“First we need to decide who is going to be responsible for what,” she said.

Coun. Dave Burton, the mayor of Highlands East, said he supports an accommodation tax.

“Parking has been an issue all the way through for me,” he said. “I’m adamant that we are going to be able to get our first responders in to these places.”

Coun. Walt McKechnie, Dysart’s deputy mayor, said parking is going to be an on-going issue with short-term rentals. He said people who break vehicle limits will lose demerit points.

“We would just set a standard that if you’re going to break our parking bylaws, then you’re going to be punished and maybe you’ll lose your (rental) license,” McKechnie said.

Rutter said an accommodation tax couldn’t be done at the county level. That would have to be done at the local municipal level.

Carter said he hopes licensing of rental operators could get underway before January. And then the accommodation tax could be discussed by at least January.

“So that all of next year would be covered,” Carter said. “Or sometime in the first quarter of next year so that we would have the (accommodation) tax in place for next year’s rentals.”

Rutter said the third-party could assist with collection of the accommodation tax and forward it to the respective municipality.

Stone said it’s time consuming for a municipality to try to collect an accommodation tax from a STR owner. Using 1,300 hosts as a baseline for the number of STRs, he said perhaps 400 who would report what they’re making off STRs.

“Even then there’s no verification method to say how much money they actually collected and how they are remitting,” Stone said.

Carter said, given the introduction of employing a third-party service, more time is needed to look closer at service providers.

Danielsen agreed that it adds a new dimension to be considered by council.

Ryall said taking time isn’t procrastination. Rather, he said, it’s council’s due diligence to make sure they choose the best means to license and regulate STRs.

“At the end of the day we make a good decision that accomplishes something,” Ryall said.

“I don’t want to defer it for too long,” Danielsen said. “There’s an awful lot of pressure out there that we land somewhere and we make a decision on this. We can’t just keep kicking it down the road.”