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Canada's largest city, facing low apartment vacancies and soaring real estate prices, is considering regulations of short-term home rentals.
Why? Concern that companies such as Airbnb Inc. are removing much-needed supply.
The City of Toronto released a report Wednesday that lays out potential control measures for short-term rentals, including a licensing system, updated zoning bylaws and additional tax requirements.
The report, which will be considered by policy makers next week, recommended consultations with the public and stakeholders early next year to help decide whether regulation is needed.
"Toronto residents have raised questions and concerns about whether short-term rentals are permitted in the city and whether short-term rentals should be subject to further regulation," according to the report, submitted by the city's planning and licensing departments.
"Cities around the world are facing similar issues and are in various stages of researching and regulating short-term rentals."
Cities are grappling with how to handle home-sharing services and their effect on neighborhoods, housing affordability, tourism and taxes.
The Toronto report comes a month after Vancouver, another Canadian city with a tight housing market, announced it would begin steps this fall to regulate short-term rentals, which that city estimates is withholding 5,000 properties from the market.
San Francisco enacted a rule this year barring platforms like Airbnb from collecting fees from hosts who haven't registered units with the city, and New York is considering a state bill to regulate the service.
Airbnb use in Toronto almost doubled last year, according to the report, showing the growing popularity of the service at a time when rising home prices are squeezing housing availability. The apartment vacancy rate in Toronto was 1.6 percent as of October 2015, and in Vancouver it was almost zero, according to the most recent data from Canada Mortgage & Housing Corp., the national housing agency.
"There is a general issue of affordability in Toronto, but we don't know what is causing that beyond market forces," Toronto Mayor John Tory said by phone last month in a wide-ranging conversation about the city's housing market.
"We are looking at first trying to determine what's causing the challenge of affordability in this market and then saying, "all right, now that we understand what's causing it, what do we do about it?'"
An Airbnb spokesman didn't immediately respond to an e-mail and phone call with comment.
There were 9,460 Airbnb listings rented in Toronto last year, up from 4,780 a year earlier, according to company data cited in the report. Of the 2015 listings, 6,440 were entire condominium units or homes.
The City of Toronto has about 228,000 condos, according to data provider Urbanation Inc.
Canadian cities may find it costly to regulate the service. Airbnb has sued San Francisco and Santa Monica, Calif., and is threatening to sue New York.
Anaheim, Calif. dropped its effort to regulate the service after the world's fourth-most valuable startup pursued legal action.