The proliferation of Airbnb-style rentals hasn’t caused the decline in the development of traditional hotels in downtown Toronto, a land economist has told a provincial tribunal that’s hearing an appeal of the city’s short-term rental bylaw.

Peter Thoma, founder of urbanMetrics, said Toronto is facing an accommodation crunch — one that will be worse if the city’s bylaw is allowed to take effect because it will drive out short-term rental operators who manage multiple units, which attract visitors who might not be able to afford or want to stay in a traditional hotel.

“Toronto doesn’t have adequate tourism accommodations to support its growing profile on the international stage,” he told the tribunal.

He was testifying Monday at the Local Planning Appeal Tribunal (LPAT) that will decide whether the short-stay accommodation rules approved by city council in December 2017 will ever be enforced.

The bylaw would restrict short-term rentals to the principal residence of the landlord, driving multiple-property operators out of business. Short-term stays of no more than 27 days would be limited to 180 days a year for a whole home but individual rooms could be let on an unlimited basis. As well, the bylaw would prohibit property owners from using their legal secondary suites as short-term rentals. Only a long-term tenant would be able to rent that accommodation for short stays.

Thoma appeared as a witness for Airbnb superhost Alexis Leino, who rents his basement apartment on a short-term basis but doesn’t want a long-term tenant. His legal fees at the tribunal are being paid by Airbnb, the biggest player in Toronto’s short-stay sector.

In response to questions from Leino’s lawyer Sarah Corman, Thoma told the tribunal that, “The lack of new hotels rooms that are in the pipeline should be sending a really strong message to policy-makers at the City of Toronto. The policies that have been prepared clearly indicate the city has not responded adequately to the pending shortfall of hotel rooms.”

“The hotel industry are asleep at the switch,” he said. “The root cause has everything to do with land economics and has nothing to do with short-term rentals.”

It’s more profitable to build condos than hotels, Thoma said.

He also told the tribunal that Airbnb guests brought about $292 million and supported about 470 jobs in Toronto in 2016.

Thoma said there were about 300 fewer rooms in 2016 than 15 years earlier. Toronto will continue to see the redevelopment of downtown hotels to different operating models, including the conversation to condos and suites accommodation, he said.

Thoma said there was an absence of “a meaningful long-term forecast” into Toronto’s tourism industry. But passenger volumes at Pearson airport, which are predicted to grow from 44 million in 2016 to 90 million by 2045, suggest there is an inadequate supply of hotels in the pipeline.

A witness from the city’s economic development department has already testified, however, that many of those airport users will never come into the city, much less stay overnight. Most of those Pearson landings will be travellers connecting to other cities, the tribunal heard.

In his cross-examination of Thoma, lawyer Eric Gillespie, who is representing the tenant and hotel worker coalition Fairbnb, said that, based on Thoma’s own evidence, the city would be down 259 downtown hotel rooms but is due to gain about 2,000 units total across Toronto, including the west-end casino project Woodbine Live.

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“To suggest all these proposed units are actually going to materialize is, in my estimation, being very optimistic,” Thoma told Gillespie.

No more witnesses are expected to appear before the tribunal being chaired by Scott Tousaw. The LPAT reconvenes for final statements from the city, landlords and Fairbnb on Oct. 15.