Toronto’s proposed registration and licensing system for Airbnb-style short-term rentals will proceed to public consultations after Mayor John Tory’s executive committee approved city staff’s draft plan on Monday night.

By regulating the burgeoning short-term rental market, Toronto will demonstrate it is a forward-looking, innovative city that isn’t trying to turn back the hands of time, Tory said Monday.

“We have to deal with these emerging technology issues as they change the way we do business and live our lives.”

City staff will submit a final set of proposals to council later this year.

After months of research and stakeholder input, city staff produced a report proposing that short-term rentals be legal for up to three rooms or an entire home in Toronto as long as it is a person’s principal residence.

The “One host, one home” rule has been proposed or adopted in several jurisdictions, including New York City, San Francisco and Vancouver. The intent is to discourage commercial operators from offering multiple listings, a practice that has been blamed for driving up rents and pushing out long-term tenants.

Property owners or tenants hosting short-term rentals will have to register with the city, pay an annual fee and remit a tourist tax at a rate still to be determined. The city’s report defines a short-term rental as one lasting up to 28 days.

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Chris Lehane, Airbnb’s head of global policy and public affairs, was among several dozen people who waited all day to share their views Monday evening with the executive committee. The majority of speakers were in favour of the recommendations.

That includes Airbnb. The dominant platform in the short-term rental market welcomes the proposed regime, believing “we need to be regulated” and pay our “fair share of taxes,” Lehane said.

“This is a new thing — the same way you went from a horse and buggy to a car — and you need new rules for a new thing,” said Lehane, a lawyer and political consultant who served as a spokesperson during former U.S. president Bill Clinton’s administration.

Lehane called the company a “platform for the middle class” that is “democratizing tourism” by making travel more affordable. It’s also a “tool of economic empowerment in a time when there’s economic stagnation,” he said.

The staff proposals also won the qualified approval of one of Airbnb’s chief nemeses: the city’s hotel industry.

Terry Mundell, president of the Greater Toronto Hotel Association, said the organization is pleased that the proposals establish an “important difference between traditional home sharing, which has been around for years, and illegal commercial activity.”

The association would, however, like staff to consider a cap on the number of nights a property can be rented out.

Leading the call for regulation has been Fairbnb, a coalition of groups started by Unite Here Local 75, which represents hospitality workers in the GTA.

The group’s chair, Lis Pimentel, said that while Fairbnb is encouraged by the proposed regulations, they must be strengthened to protect Toronto’s strained rental market.

The city should not rely on “self-declaration,” but require that people provide proof of principal residence, she said, adding that there should be significant fines for each illegal listing and that the city must take action when rules are broken.

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“Enforcement, enforcement, enforcement,” Pimentel said.

She also wants staff to reconsider a proposal allowing short-term rental companies to have access to secondary suites, such as basement apartments. These need to be available as long-term housing for Toronto residents, Pimentel said.

Correction – June 20, 2017: This article was edited from a previous version that misstated the name of Unite Here Local 75, the union that represents hospitality workers in the GTA.