Short-term rentals: defend the licensing, add the cap, earmark the revenue

Orillia already licenses short-term rentals. Municipal Code Chapter 730 (Short-Term Rental Accommodations) has been in effect since January 1, 2024. The annual licensing fee — a flat $2,040 in 2024–2025 — was restructured in July 2025 to a per-bedroom model ($680 per bedroom, to a $2,040 maximum) effective for the 2026 licensing year. That regime is real, and it is the foundation any further STR policy has to build on.

Council has since directed staff to study a cap or replacement schedule for 2026 budget deliberations (July 2025 direction). That work is in progress. The policy debate going forward is not whether to start licensing — that ship has sailed — but whether to defend the existing licensing regime against rollback pressure, whether to add a meaningful cap, and what to do with the revenue.

A reasonable framework has three elements.

First, defend the licensing. Every STR operator registers annually. The fee is set at a level that supports actual enforcement and reflects the housing-supply pressure STRs exert. The regime requires basic safety and insurance compliance. This is enforceable and standard practice in Ontario.

Second, a cap. The number of licensed STR units should not exceed 1.5% of total housing stock — a number drawn from comparable municipalities where evidence suggests displacement becomes material above that threshold. The cap is set annually; existing licensed operators are grandfathered with a path to renewal as long as they remain compliant.

Third, the revenue is dedicated. License fees and any future municipal accommodation tax revenue from STRs are ring-fenced for the City's affordable housing reserve. This is the version of the framework I can defend in public: STRs continue to exist, they pay for the housing supply pressure they exert, and the revenue does not vanish into general operations.

I am open to changing the cap number. The 1.5% figure should be tested against Orillia-specific data, which staff have, and which I have not yet seen in full. If the data points to a different threshold, I will revise.