Airbnb says a Toronto condo building is the first in Canada to sign an agreement with the short-term vacation rental company.

Neptune condominiums, located near the city's waterfront, is also the first outside the United States to sign on to the Friendly Buildings program in an effort to regulate short-term rentals.

The agreement between Neptune and Airbnb takes effect Nov. 1. Put simply, the program — piloted in the U.S. and made a permanent offering earlier this year — gives condo boards an option to more strictly control who hosts and keep tabs on renters.

"There was a large number of people concerned about security and not knowing who was in their building," said Nick Bednarz, vice-president of the building's condo board, adding hosts were not comfortable welcoming guests as a result.

"It was not a good experience for the host and the guest."

Nick Bednarz, vice-president of the Neptune condo building's board, said there was support to allow short-term rentals. (Lisa Xing/CBC)

Acknowledging there was also overwhelming support to allow short-term rentals, Bednarz reached out to Airbnb for a solution. In turn, the short-term vacation-rental company suggested Bednarz explore the idea of regulating who comes and goes in the buildings more vigilantly.

The result was an agreement that was tailored to the building, including these measures:

Security will have access to a website showing who is hosting and who their guests are at any given time.

Guests must have government-issued ID on file with Airbnb.

The condo board can request Airbnb to kick someone off the platform if too many complaints are incurred, on a case-by-case basis.

Airbnb shares five per cent of revenue from rentals with the condo board

Property insurance up to $1 million for personal units and common areas.

Hosts pay $50/month for building upkeep.

"If there's ever a problem, there's no question we'll know exactly who is involved and we can deal with it," said Bednarz, estimating about 80 units in the building are actively rented out on Airbnb. "When you have a [lot] of traffic coming in, it takes a toll on your hallways, pool, sauna. That's why the [$50 fee] was required."

'We find this is really a lifeline." Aaron Zifkin, regional director, Americas, Airbnb

However, residents who choose to only rent out a room or their unit without allowing guest access to common areas can forgo paying the fee.

Agreement comes amid heated debate

The agreement comes amid a heated debate in Toronto, and in large cities across the continent, about whether to allow or ban Airbnb rentals, and how municipalities can regulate them.

In Vancouver, city council is set to consider a proposed bylaw that would require hosts to obtain a special licence and only allow them to rent out their primary residence. The move was prompted by complaints from residents that services like Airbnb were further depleting the availability of long-term rentals.

Vancouver city staff has indicated the regulations are expected to be in place by April next year.

Beyond consequences for the rental market, many residents in condos in Toronto say the units are being rented out to people who have loud parties and don't follow condo rules.

Bednarz said his building has not run into any issues and doesn't suspect problems will crop up in the future.

Most residents don't treat the building like a hotel, he added.

"They're here living alongside the guest they're hosting. You don't want someone raising problems right beside you. It's just not going to happen."

Airbnb cites more than 80 per cent of people who are hosting are doing so in their primary residence.

'We think we're really going to get a lot of traction,' Aaron Zifkin of Airbnb says about the project. (Mark Boschler/CBC)

'Economic lifeline'

The regional director of the Americas for Airbnb said the Friendly Buildings program, which was created two years ago, is necessary, especially in cities where the cost of living is continuing to skyrocket. "We think we're really going to get a lot of traction," said Aaron Zifkin.

"It's getting more and more expensive to live in the city of Toronto. We find this is really a lifeline."

Neptune resident Joanne Downs tried to supplement her mortgage by finding a roommate for her two-bedroom condo when she first moved in more than two years ago, but decided to give Airbnb a try after they didn't get along and the roommate moved out.

"I listed the apartment. It was so popular. I had a lot of demand," said Downs, 29, who rents out one of the bedrooms in her unit. "I'm always vigilant. I only have guests who have good reviews."

Downs said she hopes the new agreement will help neighbours who aren't happy with accommodating Airbnb rentals in the building to have more peace of mind.

"It'll increase transparency," she said. "They'll know who is coming and going."

One of the shots of Downs's home that she uses on Airbnb. (Joanne Downs)

City regulations in the works

In June, the City of Toronto's municipal licensing and standards division released a series of proposals following months of consultations looking at implementing regulations of its own including:

Banning people from listing units where they don't live.

Amending zoning bylaws to create a separate category called "short-term rental."

Licensing companies like Airbnb and others.

Starting a registry of anyone operating a short-term rental unit.

Condo lawyer Denise Lash, who is consulting on these regulations and was also involved in brokering Neptune condo's agreement with Airbnb, said the proposed "principal residence" restriction would then further limit who can do short-term rentals on the condominium.

"I don't think this will be of concern to the [condo] corporation, only the investor who may have wanted to use their unit on that basis," she said.

As for the city, some key players are raising red flags about agreements between condo buildings and Airbnb.

Ward 20 Coun. Joe Cressy stressed that Toronto is currently facing an affordable housing crisis.

"People are having a hard time finding homes," he said. "And a system of investor-driven Airbnb purchasing for the purpose of ghost hotels creates all sorts of problems."

Mayor John Tory echoed a similar sentiment, saying the city needs every available housing unit for people to live in — and said many condo owners probably don't want a hotel-style operation in their building.

"The good news is this is happening before we come forward with our proposed regulations, so there is still time to take this kind of thing into account," Tory said.