VOL.10 NO.3 • JULY/AUG 2017
R E N TA L E X E C U T I V E S N AT I O N A L T H I N K TA N K
RENTT ASPHALT & CONCRETE
& LANDSCAPING...OH MY!
LPMA: 50 YEARS OF RENTAL HOUSING ADVOCACY
CMHC RENTAL CONSTRUCTION FINANCING INITIATIVE:
HOW GOOD IS IT? Canada’s #1, most widely read publication for Apartment Owners, Managers and Association Executives
What a crazy summer DEPENDING ON WHERE YOU LIVE, it’s either blistering hot or constantly raining. at’s been my experience, and the experience of people I know. Canadians seem to love complaining about the weather, and normally I don’t bother, but I think we have a case this summer. It could be an aberration or symptoms of global warming. It’s hard to say, but the outlook does not look good for the weather getting “better” any time soon. e best we can do is enjoy the outdoors by dressing for whatever happens to be going on at the time. e July/August issue of RHB Magazine features a diﬀerent version of RENTT than we’ve ever done in the past. Instead of a panel of people answering questions and discussing issues around a central topic, we engaged two experts from diﬀerent parts of the country and asked them their views on three key topics related to building maintenance – asphalt, concrete and landscaping. e panelists come from BC and Ontario, so their experiences should be very diﬀerent. Make sure to give it a read. e LPMA is celebrating its 50th anniversary, so we wrote an article about this influential landlord association. After half a century, they’ve been at the forefront of many issues aﬀecting Ontario landlords, so it was great to take a look back and reminisce… and see how little has actually changed in the province’s rental housing landscape. is issue also looks at CMHC’s Rental Construction Financing Initiative, and includes (as per usual) CFAA’s newsletter, National Outlook, and the Regional Association Voice. Make sure to read right up until “Spin Cycle” at the end of RHB Magazine. As usual, we enjoy hearing from our readers and support two-way communication. If you have any comments or questions, send them to email@example.com. I look forward to hearing from you.
Co-founder, Director Juan Malvestitti firstname.lastname@example.org
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Editorial David Gargaro firstname.lastname@example.org
Contributing Editor John Dickie, President CFAA email@example.com
Design Maria Arangio Creativo Advertising
Oﬃce Manager Geeta Lokhram
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Opininons expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the CFAA Board or management. CFAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher. P.O. Box 6967, Maple, ON L6A 1S7 416-236-7473 Produced in Canada
Enjoy the issue! David Gargaro Senior Editor 4 | j uly/aug 2017
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VOL.10 NO.2 2017
LPMA: 50 years of rental housing advocacy
RENTT: Asphalt & concrete & landscaping... Views on maintenance, repair and use within specific areas.
Looking back and forward at LPMA's role in representing the rental housing industry.
32 New CMHC Rental Construction Financing Initiative: How good is it? î “e Rental Construction Financing Initiative will provide direct loans for the construction of rental housing, mostly for the middle class.
35 National Outlook CFAA Rental Housing Conference 2017: Awards and Conference recap.
Regional Association Voice
News and views from LPMA, HDAA, EOLO and WRAMA.
A summary of industry topics and headlines.
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PRESIDENT’S CORNER CMHC AND THE GOVERNMENT OF CANADA are in the last stages of making decisions about the new National Housing Strategy (NHS.) Will the NHS be more of what we have seen for decades, or will it include transformative moves like a nation-wide portable housing benefit, or new relationships with social housing providers? e Government has already taken steps to incentivize the provision of aﬀordable housing by the private sector. e new Rental Housing Construction Initiative is open to for-profit developers, as well as municipalities and social housing providers. The initiative offers low cost financing for 10 years from the beginning of construction, thus addressing a significant barrier to new development for many builders. e initiative includes modest requirements for aﬀordability for 20 to 35% of the rental units within a project, but the rest of the units can be at full market rent for new construction. e initiative should help developers meet inclusionary zoning requirements, another objective CFAA has advanced. See page 28 for more details.
and an equitable social assistance program, or poverty reduction program, needs to address those huge diﬀerences in rents (since rents consume a large part of the budget of low-income households). CFAA Rental Housing Conference 2017 addressed many issues facing the rental housing industry, including Ontario’s expanded rent controls, other investment issues, competition for employees, new technology, rental development, marketing, leasing and building science innovations. See page 38 for what you have missed. See page 35 to find out the winners of the CFAA Rental Housing Awards for 2017. Plan to attend CFAA RHC 2018 in Vancouver, in mid-May 2018, to learn about the most important issues for residential landlords of all sizes at that time. The CFAA-Accompass Rental Housing Employee Compensation and Benefits Survey is about to be released. To order or for more information, contact firstname.lastname@example.org.
To promote a national portable housing benefit, CFAA took a leading role in the National Housing Collaborative (NHC), which is a group of associations across the housing sector, including the homebuilders, advocates for the homeless, and charitable foundations. CFAA emphasized the differences in rental market conditions between different provinces, and indeed within most provinces. Rents in large cities are often twice or three times as high as rents in most of Atlantic Canada or in small towns in Quebec and other provinces. That brings two critical consequences: new rental supply is needed in some areas but not others;
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John Dickie CFAA President
IN THIS ISSUE...
35. CFAA Awards Program 2017 - A Great Success
38. Report: CFAA 40. CFAA Suppliers 2017 Rental Housing Council Members ank you to all of CFAA’s Suppliers Conference
Congratulating this year’s CFAA Rental Housing Finalists and Award winners, including rental employees, buildings, rental housing suppliers and apartment associations from across Canada.
A recap of CFAA Rental Housing Conference 2017 held from June 6-8 at the Westin Prince Toronto.
Council members for your continued support.
NATIONAL OUTLOOK – DIGITAL EDITION available at www.cfaa-fcapi.org
CFAA Member Associations Eastern Ontario Landlord Organization (EOLO) www.eolo.ca P: 613-235-9792 Federation of Rental-housing Providers of Ontario (FRPO) www.frpo.org P: 416-385-1100, 1-877-688-1960 Greater Toronto Apartment Association (GTAA) www.gtaaonline.com P: 416-385-3435 Hamilton & District Apartment Association (HDAA) www.hamiltonapartmentassociation.ca P: 905-632-4435
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Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572
Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560
LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604.733.9440 Victoria Office P: 250-382-6324
Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224
London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999
The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $480 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.
Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703
ASPHALT & CONCRETE & LANDSCAPING…
OH MY! This issue’s version of RENTT (Rental Executives National Think Tank) follows a slightly different formula than the usual panel approach. This time, we broke the discussion into specific topics of interest to owners of rental properties – asphalt, concrete and landscaping. For each topic, we spoke to two experts – one in British Columbia, one in Ontario – to get their views on maintenance, repair and use of these specific areas in their buildings.
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Nicolas Denux President, Residential, Castera Investments
Joseph Kappel Director, Capital, Timbercreek Asset Management
Sally Tenenbaum Managing Partner, Tenen Investments
rentalhousingbusiness.ca | 15
Nicolas Denux: Reducing future costs and aesthetics are the two main motivators.
RHB: What should you do to maintain your parking lots to extend lifespan?
RHB: Re-paving can be very disruptive. What communication strategies do you recommend to decrease tenant complaints?
Joseph Kappel:You should do regular cleaning of the parking lot along with inspections and sealing of cracks. Seal the asphalt as needed based on the inspections to try and prevent water infiltration and further deterioration. I believe a good rule of thumb is in the spring to clean up all the winter debris and seal any new cracks, then in the fall to get ready for the winter months.
Joseph Kappel: This is more of an operations question. However, good communication early and often with the operations team and tenants goes a long way. That way there are no surprises when the project starts and, with good lead time, operations and residents have time to make alternative arrangements if needed during the disruption.
Nicolas Denux: Having properties mostly on the west coast, we have almost no frost issues, but we are strong believers in crack sealing and preventive maintenance such as repairing potholes early on.
Nicolas Denux: Nothing in particular, save ample notice and communications with the residents of the affected property.
RHB: What types of issues have had a negative impact on your parking lots and/or forced you to tear up your asphalt? Joseph Kappel: The biggest factor that reduces the lifespan of a parking lot I have seen in my career is inadequate drainage. Water trapped in the granulars of a pavement structure, especially during the beginning of winter, leads to frost heave. If you have ever seen parking lots with alligator cracking, especially around the low points (catchbasins & manholes), it is due to water trapped in the granulars. An easy and cheap solution is to always trench subdrains in the subgrade around the catchbasins and manholes and connect them. This allows the water to drain out of the granulars, keeping them dry and thus preventing the frost heave and cracking.
RHB: What steps should owners take to ensure they are working with a competent and reliable company?
Joseph Kappel: For the most part, we use contractors that we have built relationships with over the years. We are confident in the work they perform and know the job will be done right. We continually add new contractors that we vet through our approval process (i.e., WSIB, insurance).
Nicolas Denux: Clay fill can definitively be a problem for asphalt. One has to ensure proper road base is used. Frequent heavy vehicle traffic, such as garbage trucks, often causes premature failure of the asphalt. The garbage and recycling bin areas have to be repaved with more road base earlier than the rest of the parking lot or replaced with cement pads in some cases. RHB: What is your largest motivator for being proactive with asphalt maintenance â€“ aesthetics, liability or to reduce future costs?
Nicolas Denux: References from prior work and testing them on a smaller job before giving them a larger project. RHB: What kind of insurance, safety certificates and credentials should a reliable contractor provide? Joseph Kappel: We ask for their WSIB forms and that they carry a certain amount of insurance. They should also be able to provide references if asked and a portfolio of the previous work they have performed. Nicolas Denux:The usual letter of compliance with WCB and liability insurance. RHB: With respect to asphalt repair, maintenance and replacement, how do you allocate your budget â€“ per building/per year? Joseph Kappel: We review the budget on a yearly basis per building and look at the expected 10-year capital plan. Nicolas Denux: We do it on an as needed basis.
Joseph Kappel: I believe it is a combination of all those factors. We want our parking lots to be safe and not full of potholes and create a positive resident experience for those that do use the parking lots. But with proper maintenance you can extend the longevity of a parking lot, reducing your capital expenditures in the long run.
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CONCRETE RHB: What are the top contributors to concrete deterioration? Joseph Kappel: Concrete is very durable. Poor installation can lead to quick deterioration; an example is not protecting freshly placed concrete from rain, leading to spalling of the concrete. Salt used for de-icing can also deteriorate concrete. Good reason for spring cleaning around the site!
Nicolas Denux: Road salt is enemy #1.
RHB: Where else within your building exterior does it make sense to use concrete?
RHB: What preventive maintenance measures can owners take to extend the life of their concrete? Joseph Kappel: Again, concrete is very durable. Cleaning off the concrete at the same time as the parking lot can go a long way to keeping your concrete in good condition. Nicolas Denux: Appropriate membranes and good spring sweeping with a hose rinse once a year to remove excess salt and sand. RHB: When would you recommend the use of protective coatings/sealers?
Joseph Kappel: I would recommend concrete for the pads in garbage enclosures and about three metres in front where the garbage truck does maneuvering. I have seen numerous instances where on a hot day, with all the weight on the front of the truck moving around the bins, it has literally dug up the asphalt in that area. Concrete can withstand this much more effectively. Nicolas Denux: For walkways and patios, concrete is a durable, cost-effective solution.
Joseph Kappel: Personally, I am not a big fan of concrete sealers. All the ones I have seen used in the past have made the concrete shiny and slippery when wet. Not a good scenario when you have residents using the walkways all the time. So I have not used them.
RHB: What kind of impact has your landscaping had on curb appeal and attracting tenants?
Nicolas Denux: Inside buildings absolutely.
Sally Tenenbaum: We always consider the "big picture" approach to landscaping. It is always an integral part of the whole, and part of every building and reno project. Property landscaping is our calling card, the first greeting upon the residents’ “coming home” experience. It also has the greatest impact on the neighbourhood, enhancing the area in general.
RHB: In case of underground parking rehabilitation, should owners rely solely on the advice of concrete restoration contractors or should a structural engineer be consulted?
Nicolas Denux: It is part of the first impression, so the property owner has to be mindful of this.
RHB: Are there any trees, shrubs, flower beds, etc. you would recommend staying away from based on the needs of apartment communities?
Nicolas Denux: It depends on the location of the building, as species vary according to the local climate. On the west coast, we garden year round so we tend to think of the appeal of certain plants in the winter as well.
Joseph Kappel: Contractors who perform the work do not have the in-depth knowledge of structural engineering and therefore should not be solely relied upon for rehabilitation. As an owner, you would be taking on substantial risk and liabilities if anything were to happen. Always engage a structural engineer who has expertise in that field and can make sound engineering recommendations for concrete restoration to protect yourself and your residents.
Nicolas Denux: Getting a structural engineer on board is best in our experience to ensure the quality of the work and help protect the owner.
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Sally Tenenbaum: We stay away from labour-intensive plantings, avoiding perennials and annuals that are labour intensive. The designs we create are regulated and well defined. We always look to create a garden that requires low maintenance, mostly clipping and trimming. RHB: What are some of the most effective (initial cost and ongoing maintenance) ways to enhance your building’s landscapes? Nicolas Denux: Nice lawns are the most cost-effective, upfront and easiest to look after, but they are the most plain, so finding the right balance is key. Sally Tenenbaum: We favour simple evergreens and well-delineated hedges that define property boundaries and create barriers and pathways so the grounds are not easily damaged. We prefer ornamental trees to create grid-like patterns, an orchard effect or a courtyard appeal on those properties that can support it. It is always a simplified palette, and the impact of using the same material en masse helps creates the dynamic effect.
Tips on maintaining drains, interceptor pits and electric submersible pumps Over a one-year period, dirt and debris will find its way into your buildingâ€™s sanitary sewer system. Automobiles parking in the garage will come in with snow, ice and rainwater, which will leave dirt and debris that will find their way into the drains. Garages are usually swept and washed on an annual basis. After performing this cleaning, some dirt and debris will end up in the drainage system. So what should you do to maintain your buildingâ€™s drainage system?
3. Underground garage drains should be cleaned regularly and TV camera inspected to make sure they are running freely with no obstructions.
The electric submersible pumps in these pits must be serviced regularly. Never service or replace an electric submersible pump without vacuuming and cleaning all the debris from these pits.
4. Since most underground garages are well below the city's sewer system, there are two to three compartment interceptor pits with electric submersible pumps that pump the water up into the city sewer. These interceptor pits need to be vacuumed and cleaned on a regular basis.
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If you are not sure of the condition of the underground drains, TV camera inspection is always an affordable option.
RHB: When it comes to walkways, what is your preferred finish (gravel, interlocking, cement, etc.)?
RHB: Describe ways in which you have used your building’s outside space to promote community building.
Nicolas Denux: We prefer cement for durability.
Nicolas Denux: We’ve organized resident BBQs and picnics and we’ve even installed “smoking gazebos” far from the building for the occasional smokers in our nonsmoking buildings. This works on the west coast year round, but it is harder to do in a colder winter climate.
Sally Tenenbaum: Depending on the specific property and installation, our preference is to use natural stone for our hardscape, including granite and precast concrete products.
RHB: How do you incorporate recreational facilities into your properties so that tenants get the greatest use out of them?
Nicolas Denux: It is building dependent. For example, kids’ playgrounds are popular in suburban townhouse complexes with a lot of available land, whereas rooftop decks and rooftop pools are popular in more urban environments with less land. We sometimes find many residents do not use the recreational amenities but simply like the idea of having it available.
Sally Tenenbaum: Our properties incorporate well thought out and carefully designed features that serve utilitarian requirements. They enhance the use of the property, yet are situated as to not detract from the beauty of the property and the grounds. They are tucked away but well integrated, and practically accessible.
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Sally Tenenbaum: Merging with the natural surroundings to create a sense of "place" is as important as the buildings' architecture and finishes. The landscape tells a story. It reflects pride of ownership. It is a place to enjoy, to appreciate the changes of season, a place to gather, a place that enhances the feeling of "coming home." LED lighting is another component of a beautifully landscaped garden, highlighting walkways, trees, and creating an overall feeling of safety. It adds a touch of magic to a well-designed garden. RHB: Is it worth investing in outdoor areas for dogs? What have you done to address this issue? Nicolas Denux: No large investment yet, but in one building we’ve installed “doggy bag” stations to distribute compostable plastic bags to resident dog owners to keep lawns clean. Sally Tenenbaum: Our dedicated dog enclosures provide the necessary disposal materials which helps maintain the beauty of the rest of the grounds, as well as providing a meeting place for the residents. They have been highly successful.
Canada is celebrating its sesquicentennial this year, and celebrations abound across the nation. The representatives from Nova Scotia, New Brunswick and the Province of Canada came together with British Parliament to build a “powerful, united, wealthy and free country that spanned a continent.” Today, that vision rings true, as Canada is regularly ranked as one of the best places to live in the world. One century after Confederation, the founding members of the London Property Management Association (LPMA) came together to create a forum in which to share information that would enable members to more effectively run their rental housing properties. Half a century later, the organization is still going strong, acting as the voice for its almost 600 members and lobbying various levels of government on issues that affect the rental housing industry. Fifty years is a milestone for any business, and even more so for a local industry association. LPMA has survived and thrived due to the willingness of its members to work together, share ideas, educate other members and focus on creating a better rental housing environment for everyone involved. “I feel that LPMA has succeeded as we have always had very dedicated Board members who meet once a month,” said Shirley Criger, Property Manager, Gateway Property Management Corporation. “We hold several seminars through the year as well as monthly meetings October through May.” Cont’d on page 26
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Looking back The founding members of LPMA—Sheldon Aaron, George Avola, Mike Arnsby and others— originally came together to discuss the costs involved in constructing new rental properties. Even though the landlords were competitors, sharing information on the price of electrical work, plumbing and other services made sense in running their respective businesses. Both large and small landlords benefited from these interactions, as they were able to learn about operating costs, dealing with tenants and addressing common issues in running their buildings. However, one central issue united the LPMA members and encouraged them to work together against a common cause. In 1975, the Ontario government introduced rent control legislation, which would affect every landlord in the province. As rent control was relatively new, there was a lot of confusion about how the legislation would affect different landlords. At the time, there was no provincial rental housing association, so LPMA took up the mantle to be at the forefront of lobbying the provincial government to ensure that the legislation treated landlords fairly. “There was no federal or provincial landlord association at the time, so the LPMA worked to get people involved to help fight for landlords’ rights at all levels of government,” said Sean McNally, Owner, MCI Properties (and LPMA Director). “Over the years, LPMA has helped to bring other associations into the fight against unfair rental housing practices. They’ve provided submissions to government on how to improve rent control, and educated its members on how the legislation affects them.” Rent control legislation has remained a challenge for all Ontario landlords, and LPMA has led the way in uniting other associations in lobbying the government to make the laws more equitable. Every LPMA president since its inception has
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had to deal with rent control in its various forms and the approaches of different governments to the legislation. For example, Barry Parker, who was president of LPMA from 1982 to 1984, chaired an ad hoc provincial landlord association (Committee of Concern) that represented landlords’ interests at a provincial inquiry into rent controls. Even today, LPMA continues to educate its members and lobby the government on making rent control legislation fairer to landlords. LPMA has also had to deal with a lot of local issues that affect its members in London, such as difficult tenants, the Ontario Fire Code, municipal taxation of rental properties and more. One central issue was landlord licensing, which would require landlords to pay a licensing fee to operate a rental property. LPMA challenged the issue at the local level and was deeply involved in changing the legislation to be fairer to its members. As it stands, only landlords with four or fewer units need to be licensed and must pay the licensing fees. Looking forward The more things change, the more they stay the same. Issues that have affected Ontario’s rental housing industry in the past continue to recur or pop up in different forms. For example, in April 2017, the Ontario government passed the Rental Fairness Act, which expands rent control legislation to all private rental units, including those occupied on or after November 1, 1991. Landlord licensing has also become a growing issue of concern, as licensing fees continue to increase for owners of rental properties, with municipalities offloading fees that are passed on to landlords. Regardless of the challenge, new or old, LPMA plans to continue lobbying the various levels of government to make legislation fairer for landlords. The association has always been at the forefront of representing its members and the rental housing industry, as well as educating lawmakers and landlords. Education will continue to be central to LPMA’s mandate, as it will continue to educate members on making good decisions and offer seminars that spread knowledge to small and large landlords alike. “We want our landlords to learn and avoid making the same mistakes of past landlords,” said McNally. “We will also ensure that everyone knows what’s going on at municipal meetings and when they are occurring so that our members can attend and provide their input to ensure that the industry is properly represented.”
Conclusion LPMA has been at the forefront of representing landlords and owners of rental properties in Ontario since its inception. It has always focused on serving the interests of both small and large landlords, and has built its strength upon education and the willingness of its members to share information with each other. With a strong membership base, and the drive to continue fighting for landlords’ rights, LPMA will continue to represent the rental housing industry for years to come.
“I congratulate the London Property Management Association on its 50th anniversary,” said John Dickie, President, Canadian Federation of Apartment Associations. “A 50-year run makes LPMA one of the longest-standing landlord associations in Ontario and across Canada. As CFAA President, I work with many landlord associations across Canada. LPMA stands out as a sterling example of an engaged and active association.” — By David Gargaro, in collaboration with Sean McNally and Shirley Criger
rentalhousingbusiness.ca | 27
The new CMHC Rental Construction Financing Initiative:
How good is it? In Budget 2016, the federal government allocated $2.5 billion over four years for a program of direct loans to for-profit rental developers, social housing providers and municipalities. Details were announced on April 20, 2017. CMHC and the government have gotten several things right in the program. However, there are significant impediments to taking up the loans, and some key unknowns. In principle, the program is open to all communities across Canada, but CMHC will likely select projects in communities where rents are relatively high and vacancies are low, or where the rental supply has fallen behind population growth. CMHC has been receiving applications since April 20, and has already received a large number of applications compared to the number they can fund with the $625 million available in 2017. They are still accepting applications to choose the ones that will â€œhave the greatest impact for Canadians.â€? At $25 million per project, CMHC can accept 25 projects. As well, applications can be made in 2018 for 2018 funding, and so on for the next three years after 2017. Projects that are not accepted can be re-submitted in a subsequent year, as long as construction has not begun.
Program advantages The Rental Construction Financing Initiative will provide direct loans for the construction of rental housing mostly for the middle class. There are some affordability requirements, but they are relatively modest and developers can apply them to 20 to 35 per cent of the suites, leaving the rest at full market rents. The total intended rent for the building needs to be set at least 10 per cent below the potential revenue for the building (i.e., what could be obtained if all the units were rented at the market rent for similar new rental units in
the community). The key program advantage is that the benchmark rent is the market rent for newly constructed units with similar amenities to those of the project. That rent can be far above the average rent for existing units with the same bedroom count As a second test regarding affordability, a developer needs to keep at least 20 per cent of the units at rents below what the median household in their community can pay (spending 30 per cent of their pre-tax income). Table 1 shows some examples of that requirement, and related rent levels.
Table 1: Affordability levels (monthly rent) City
Minimum requirement (100%)
<70% (3 points)
Average existing 2-bedroom apartment (for comparison)
$2,149 $1,957 $2,190 $2,047 $1,998
$1,504 $1,370 $1,533 $1,433 $1,399
$1,063 $1,327 $1,037 $1,068 $1,450
Halifax Toronto Hamilton Winnipeg Vancouver
Notes: 1. The rents in columns 2 and 3 are based on 2015 median household incomes, according to Statistics Canada. The thresholds will increase over the life of the program. 2. The units that meet the chosen affordability standard cannot consist only of small units, but it is not clear what mix of unit sizes will satisfy the requirements or gain the project an extra priority. 3. Only 20 to 35 per cent of the total units will be subject to these requirements.
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4. See the discussion of the Social Outcome Scoring Grid below for the reason why projects will likely need to provide the units at 70 or 80 per cent of the minimum affordability requirement. (Ninety per cent gains one point, 80 per cent gains two points and 70 per cent gains three points.)
Contâ€™d on page 32
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The program provides for loan advances starting from an early stage of construction, and so it can largely or entirely replace construction financing. That is a huge benefit given the cost of construction financing. For projects with sufficient priority, the loan can be for 100 per cent of the construction cost, another substantial advantage. The interest rate is to be about 50 basis points above the interest rate paid on 10-year Government of Canada bonds at the date of the first advance. If interest rates rise, that will lock in a good interest rate for the entire term of the loan, which is to be 10 years from the date of the first advance.
program, and the cut-off may be 20 or 21 points in some areas. This may be difficult for a for-profit developer to achieve. For energy consumption, a for-profit developer is likely to be able to achieve savings of 25 per cent over the building code, thus gaining two points. (Fifty per cent would get three points and a net-zero building would get five points.) Enhanced accessibility should get a developer four points. Access to transit should get two points in a city with good transit.
While interest payments begin immediately, principal payments begin after one year of stable operating income. The amortization period can be up to 50 years. At the term of the loan, CMHC mortgage insurance will be provided at no cost to the borrower. All of those features are very positive. However, some problems exist.
Collaboration may get a developer one point easily (for a partnership, even if it is between a developer and a rental owner/manager). Up to four more points are available for a donation of land or for other government support or concessions on property taxes or development charges. (Social housing providers may well rack up all five points in that area.)
Program problems To apply, developers need to have a shovel-ready project, on which construction has not yet begun, and does not begin until underwriting is complete. Processing delay may lose construction time, which is no small thing with Canada’s constrained construction season.
Counting those areas, many developers can readily achieve nine points out of 16. To reach 18 points, a developer will need all nine points that are given for enhanced affordability. To do that, the proposal needs to guarantee affordability at the 70 per cent level for 21 years, for the basic 20 per cent of units plus at least 11 more units.
While relatively modest requirements have been set for basic eligibility, the program is already heavily over-subscribed. As a result, only projects that exceed the basic requirements by a considerable margin are likely to be selected for funding. The basic requirements are the affordability standards described above, AND • a minimum 15 per cent less energy use and greenhouse gas emissions than the 2015 National Energy Code for Buildings or the 2015 National Building Code, and • at least 10 per cent of the units must meet or exceed accessibility standards for the municipality, province or territory, or if no local standards exist, the 2015 National Building Code. In addition, access to the project and all common areas must be barrier-free. However, given the volume of applications, our current information is that to actually receive funding, a developer is likely to need to propose a project in an area that needs new supply, which reaches higher standards than the minimums for program eligibility. The Social Outcome Scoring Grid CMHC has created a Social Outcome Scoring Grid to determine the loan prioritization, and whether the financing will be available for 90, 95 or 100 per cent of cost. One hundred per cent financing requires a score of 19 points or more. Out of a possible total of 25 points, a score of at least 15 to 19 is likely to be needed to receive financing under the
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Social housing providers would likely meet those affordability standards, and also gain points for having other government supports and donating land. However, they may not have many shovel-ready projects. Key unknowns As of the date of publication, the key unknowns are: • The exact interest rate (or interest rate savings) • The speed of processing and underwriting • What geographic areas will qualify in practice • What point count will be needed in different areas (or overall) Conclusion CFAA is in favour of incentives for new rental construction in areas where new rental construction is needed, such as Toronto, the Greater Golden Horseshoe and Greater Vancouver. However, as Table 1 shows, the current affordability test works in the wrong direction for Toronto and Vancouver. CFAA will monitor the program results, and provide input to CMHC and the government on what is needed to make the program more successful. CFAA invites you to provide input at email@example.com. — John Dickie, CFAA President
CFAA Awards Program 2017 — a great success On Wednesday, June 7, CFAA recognized the winners of its second Rental Housing Awards Program at the CFAA Awards Dinner in Toronto. The winners included leading landlords, rental housing suppliers and British Columbia’s apartment association, LandlordBC.
Please join CFAA in congratulating this year’s CFAA Rental Housing Awards finalists: Maintenance Person of the Year recognizes a maintenance person, who has demonstrated excellence and professionalism in the rental-housing industry. Winner: Jason MacLean of Vertica Resident Services “Going the extra mile is just the way Jason approaches his job. He has a 95 percent satisfaction rate from tenants on completing maintenance requests within 48 hours, leaving the work area clean and making tenant experience a positive one. He even helps with groceries or by boosting a resident’s car! ” Finalists: Cedric Abreu of Sterling Karamar Property Management Inc., and John Paul Lavellee of Globe Property Management
Resident Manager of the Year recognizes a resident manager (or team of two), nominated by their employer, who has demonstrated excellence and professionalism in the rental-housing industry. Winner: Mavis Waruk of Skyline Living “Working hard to make sure the residents feel heard and are well served, Mavis Waruk has had great success in a very challenging market. Working far from head office, Mavis reduced the vacancy rate to just 1% in a market with an average vacancy rate of 10%. She also reduced the turnover to 10% in a market where 30-40% of units turnover on an annual basis. ” Finalists: Anthony Kushniruk of Towers Realty, and Betty & Robert Giaschi of Realstar Management
Property Manager of the Year recognizes a property manager, nominated by their employer, who has demonstrated excellence and professionalism in the rental-housing industry. Winner: Dragana Lazic of CAPREIT “Dragana stood out as the winner because of the creative solutions she applied to Property Management challenges and the positive impact her decisions had on the surrounding communities. Despite taking on a very significant increase in responsibility, she continued to care for people, properties and the organization with great professionalism. ” Finalists: Cathie Wilson of M&R Holdings, and Michele Carr of Vertica Resident Services
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JULY/AUG 2017 Off-Site Employee of the Year recognizes an individual off-site employee, nominated by their employer, who has demonstrated excellence and professionalism in the rental-housing industry. Winner: Beatrice Clivet of Skyline Living “Beatrice supervises Skyline’s team of 21 team leaders and property management administrators (PMAs). She also hires, trains and supports them strongly, as well as acting as a PMA for a region. Through new training programs and collection methods, and her leadership, Beatrice dramatically reduced aged A/Rs and dramatically increased recoveries for tenant damage for the whole team.” Finalists: Lin Purvis of Hollyburn Properties Limited, and Rhodora Dorado of CAPREIT Renovation of the Year recognizes a company which has achieved excellence in the renovation of an existing rentalhousing building, or a building being converted into a rental building. Winner: Seaview Towers - 450 Dallas Road, Victoria by Starlight Investments “Tasteful yet simple, this renovation successfully captures the architectural essence of the 1960’s building while embracing the local picturesque views through the installation of glass balconies and clear ground floor fencing. A highly creative approach was taken in transforming an underutilized outdoor pool and patio into a resident barbecue and entertainment area.” Finalists: Parklea Apartments - 151 Keith Road East, North Vancouver by Starlight Investments, and The Skyline - 1305 West 12th Avenue, Vancouver by Hollyburn Properties Limited Rental Development of the Year recognizes a company which has achieved excellence in the development of a new rental housing project. Each finalist for this award has demonstrated outstanding design, curb appeal, amenities, environmental quality, efficient use of space and functionality. Winner: Bridgewater - 175 West 14th Street, North Vancouver by Hollyburn Properties Limited “Hollyburn's Bridgewater development was mindful of the environment throughout construction and also with its offering to tenants, including a well laid-out waste system for best-in-practice diversion and LED lighting. The building features a rooftop terrace with a fire pit and community gardens, a resident lounge with fireplace and kitchen. There is bicycle parking, a gym,
and electric vehicle charging stalls. In-suite amenities include washer/dryer, and a second full bath in 2BR units. The Bridgewater offering is further enhanced by collaboration with the community, while always keeping their staff in the forefront. ” Finalists: Alto - 1544 Dundas Street West, Toronto by Sun Life Financial, and St. Joseph's Square - 5450 Kaye Street, Halifax by Paramount Management & Dexel New Product or Service of the Year recognizes a rental housing supplier who has launched an innovative product or service which has proved very useful to rental housing providers. This new service or product has demonstrated innovation, usability, and value for the rental-housing industry. Winner: Gryd.com Platform by Gryd “Gryd.com is innovative in the rental industry. Gryd.com digitizes content, creating an interactive experience for consumers. In particular, it engages prospective tenants who rely on their mobile phones (and other devices) to procure products and services. Gryd.com is user friendly and available to all sizes of landlords.” Finalists: RentSync 2.0 by Landlord Web Solutions, and SuiteHeat by SensorSuite Inc. Association Achievement of the Year recognizes an apartment association which has: Successfully launched an innovative campaign or initiative of great usefulness to rental housing providers, OR successfully opposed a government proposal detrimental to the rental sector. Winner: Landlord Registry™ by LandlordBC “Rarely does one campaign achieve so much. LandlordBC’s Landlord Registry™ not only improved the standards of practice of the industry, but also demonstrated to tenants and tenant associations and government at all levels, the strides that landlords are making to self-regulate and improve industry standards and practices. Originally geared at helping small landlords, Landlord Registry™ has been so well received that large established professional property managers and owners have incorporated the training program and certification into their training programs.” Awards sponsors CFAA thanks its the Awards 2017 sponsors: Kijiji, Lumenix, Rogers, and Wyse Meter Solutions. CFAA also thanks the many entrants, and judges, who made the CFAA Award Program possible. For more information about CFAA or its Awards Program, contact: Jeremy Newman at firstname.lastname@example.org.
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Want to stay up to date? Sign-up for CFAA’s National Outlook e-newsletter and receive up-to-date news on what is happening across Canada, as well as industry insights and insider information on CFAA happenings. Email email@example.com to start receiving National Outlook today!
Report: CFAA Rental Housing Conference 2017 Delegates from all across Canada attended CFAA Rental Housing Conference 2017 from June 6 to 8 at the Westin Prince Toronto. CFAA RHC is Canada’s only national rental housing conference run by the rental housing industry, for the rental housing industry.
The Conference also included CFAA’s Awards Dinner, held on June 7, which celebrates excellence and industry leading standards at the CFAA’s second annual Awards Dinner. To read more about CFAA’s Awards Program see page 35. CFAA thanks it Principal Conference sponsor, Yardi Systems Canada for its longstanding support of the conference, and all other conference sponsors who continue to make the CFAA Conference possible. This year saw a record number of attendees, who are also critical to making the Conference a success. One attendee stated that they enjoyed “meeting people from many different cities in Canada and the great variety of topics covered in the round tables and presentations,” while others enjoyed the “quality networking opportunities” and the “very warm atmosphere.” Attendees described the event as “very informative and educational” and “well worth attending.” Because of CFAA’s role as an advocacy organization and a forum for establishing and sharing best practices, CFAA is uniquely positioned to deliver a conference that provides the best view of the rental housing industry in Canada and where it is headed.
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The Future of the Industry Where is the rental housing industry headed, and what can landlords do to stay competitive in the rapidly changing rental landscape? CFAA sought to answer that by hosting a number of forward looking sessions. Lively debate was sparked by hearing the perspective on how housing policy could be shaped to help younger generations from Dr. Paul Kershaw, founder of Generation Squeeze. Also on the agenda was the presentation Future of the Rental Housing Industry in Canada, which featured information on the changing markets and demographics, the changing regulatory framework and evolving land use planning issues.
Another panel of experts spoke about the looming legalization of marijuana, including what impact it will have on the rental industry, and what landlords can do to mitigate some of the negative consequences of smoking and growing marijuana in rented residences. Industry experts explained how to prevent data overload, and process operational data to find the information that is key to making good, well-informed operational decisions. From Gryd, delegates got to experience firsthand virtual reality and augmented reality, and how useful those technologies can be in marketing and leasing rental housing units. Contâ€™d on page 41
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CFAA Suppliers Council
CFAA would like to thank all of its Supplier Council members for their continued support.
If you would like to join CFAAâ€™s Supplier Council, email firstname.lastname@example.org for more information. 40 | july/aug 2017
JULY/AUG 2017 Market and investment updates Every year, CFAA aims to give attendees the national outlook â€“ to keep landlords up to date on what landlords from across Canada are experiencing, and how they are approaching it. Renowned economist, Benjamin Tal, gave his Economic Update on the economy six months into the Presidency of Donald Trump, and what it means for landlords in Canada.
In Steps to Success, Kris Boyce of Greenwin and BJ Santavy of Skyline recounted their journey from entry level positions to positions high in their companies. Randy Daiter presented his method for building a vibrant corporate culture by leading minds. Colleen McCarville outlined how she keep employees engaged using results-based performance.
At the Executive Roundtable, Operations Roundtable, Marketing Roundtable, and Development Roundtable, attendees also had a chance to hear from leading thinkers hailing from Canadaâ€™s leading rental providers, including: CAPREIT, Homestead, Northview REIT, Timbercreek, Skyline, Killam REIT, Minto, Effort Trust, Morguard and Concert. But that was just a taste of what happened at CFAA RHC 2017. The conference also covered topics on human resources, marketing and leasing, and building science. Leadership Every year the Conference brings together innovative leaders to inspire and inform those who are leading our industry forward. Henry Burris, Grey Cup-winning quarterback, recently retired from the Ottawa Redblacks, gave an engaging keynote speech about what leadership meant to him over the course of his career.
Vancouver 2018 CFAA will be holding its 10th Annual Rental Housing Conference in Vancouver in 2018. Sign-up with email@example.com for more information as it becomes available.
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Possible City of Ottawa moves to regulate Airbnb Airbnb rentals are a growing concern for Ottawa’s landlords as some tenants seek to earn a good part of their monthly rent through daily rentals of their apartments. This presents security issues and sometimes noise and damage issues at rental buildings. Most landlords would prefer not to have to deal with “home sharing” and consider it a form of illegal subletting. If the right evidence is presented, the Landlord and Tenant Board will order a tenant to stop Airbnb rentals, failing which their tenancy will be terminated. Now the City of Ottawa is considering getting involved, thanks to complaints from homeowners about other homeowners or renters. On July 12, City Council adopted a motion directing city staff to report on whether existing bylaw and zoning rules can deal effectively with concerns about safety, parking, noise and land-use conflicts that come with the growing popularity of Airbnb and similar short-term rental operations. The motion was triggered by complaints received by Councillor Diane Deans from a group of residents about an Airbnb listing in Hunt Club Park. Residents complained about “loud noises, people yelling at night, throwing beer bottles over the fence, throwing cigarette butts on the street," Deans said. Councillor Rick Chiarelli told City Council, "When students go away from student housing in the spring to return to the fall, there's a gap where people are trying to … turn individual residences into mini hotels.”
Other cities are also moving to license Airbnb operators. Toronto's Airbnb rules would use licensing to reduce "neighbourhood nuisances" from short-term rentals. The city could deny applications or remove problem operators from the city registry if there is criminal activity or a threat to public health and safety at a listing. Both Toronto and Vancouver want to limit Airbnb rentals to primary residences to keep people from buying housing stock to use as Airbnb income properties. However, that is not the problem that concerns Ottawa’s City Councillors and landlords. In response to questions about the issues at the listing in Hunt Club Park, Airbnb pointed to its recently-launched "neighbour tool," which allows people to contact Airbnb about problems with listings in their community. Airbnb works with the host to resolve the issue. Airbnb’s spokesperson added, "Hosting is a big responsibility and those who repeatedly fail to meet our standards and expectations will be subject to suspension or removal." While there are some divergent views among rental housing providers, most landlords in Ottawa want to stop short-term rentals by tenants in their buildings. EOLO will be working with city staff to address the shortterm rental issue in a way that addresses the concerns of landlords as well as homeowners. We also want to make sure the response to problems with Airbnb rentals does not lead to landlord licensing.
BECOME AN EOLO MEMBER NOW! EOLO invites Ottawa area landlords to join the organization. Have your interests and concerns heard, and benefit from EOLO’s support. As an EOLO member, you will: • Receive prompt email notification of relevant City rule changes • Be able to attend two networking receptions each year • Be able to attend two free education events each year
• Receive EOLO’s newsletter with more information about new issues and developments at the City and in provincial funding programs and landlord-tenant laws. To apply for membership, go to www.eolo.ca, download the membership application form and send it to us at the contact info on that website. rentalhousingbusiness.ca | 45
Ottawa’s apartments mostly held by private corporations CMHC reports that across Canada’s cities, 49% of purpose-built rental units are owned by individual investors, and 40% are held through private corporations, and 11% are held through REITs, public companies, pension funds and real estate investment funds. Ultimately, all units are owned by individuals whether by direct ownership, or through shares in companies, units in REITs or REIFs, or interests in pension funds. However, shifting patterns of ownership are of interest, and in some cases come with different income tax implications. The report is available through a link from CMHC’s Newsroom for July 2017. Quebec is very different from the rest of Canada in the degree of ownership by individual investors. Of the seven census metropolitan areas (CMAs) with a higher degree of individual ownership than the Canadian average, six are in Quebec. The seventh is Toronto. Charlottetown is tied with the Canadian average, and St. Catharines-Niagara is close. Every other CMA in English Canada falls below the average. Instead, in English Canada, the largest part of rental units is held through private corporations. See examples in Table 1.
Table 1: Rental ownership structures City Winnipeg Ottawa Kitchener-Waterloo London Kingston Halifax Vancouver Edmonton Toronto
• Toward tax fairness for tenants and rental providers • To charge high-rise tenants and landlords lower amounts for waste collection (reflecting the lower cost of bin collection) • To keep water charges fair for tenants and landlords • To avoid landlord licensing • To adopt direct financial assistance to low-income tenants EOLO needs the support of all residential landlords in Ottawa to keep the City from imposing new or unfair costs on landlords, since too many people take the view that (rich) landlords pay those costs rather than tenants. In fact, usually when landlords win, tenants also win, and EOLO has been successful at communicating that key message. EOLO looks forward to continue to advocate for the interests of tenants, landlords and those who supply the rental housing industry.
Other issues in rental ownership and management structures CMHC’s reporting on the ownership structure of rental housing just began this year. In EOLO’s view, the information which has been collected in the first run of the new ownership questions is probably not the most important information. We believe that whether an
% by private corporations
% by individual investors
% in other ownership (mostly REITs)
80 69 61 60 58 56 53 42 38
18 23 32 23 33 28 36 29 50
2 8 7 17 9 16 11 19 12
Table 1 Source: CMHC
Of special interest to EOLO members is the position of Ottawa. Except for Winnipeg, Ottawa has the highest proportion of purpose-built rental units held through private corporations across Canada. That reflects the importance in Ottawa of well-established family-held private owner-managers and management groups such as Homestead, Paramount, Osgoode, Ferguslea, Urbandale, CLV, Regional and District. (Minto was in that category as well, although many of its properties are now being held in real estate investment funds.) Along with many others, those families and corporations have been instrumental in creating and supporting EOLO. By having a strong and united support, and being well resourced, EOLO has been able to move the City of Ottawa:
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individual owns a rental property directly or through a private corporation is typically driven by tax planning and liability concerns, and does not necessarily correlate with significant differences in behaviour in the management of a property. It would be more interesting to know answers to questions like the following: • Is a property owned by a limited family group (whether directly or through a corporation), or is it owned by a syndicate or partnership consisting of more than two unrelated people (again whether directly or through a corporate structure)? • Is a property self-managed by the owners, or managed by a third party?
• In each case, how big is the management operation, measured by the number of units managed, and also by the number of employees? • Is the operation centred in the city where the units are located, or is it headquartered elsewhere? Those issues seem more correlated with industry re-structuring and on the likely willingness to adopt technological change or new systems. For example, large companies sometimes have process teams, whereas small ones do not. Small and medium-sized companies can innovate too, but that is very much a function of the interest in innovation of the company’s leadership.
positions, in part due to the work EOLO has done as a member of the City of Ottawa’s Housing System Working Group. We look forward to learning the decisions on the National Housing Strategy this fall, probably in November.
EOLO expects to ask CFAA to suggest those questions or similar questions to CMHC, to use either as a pilot in Ottawa or nation-wide. As always, we invite your input at firstname.lastname@example.org.
National Housing Strategy at a critical point The federal government and CMHC are in the final stages of deciding the contents of the National Housing Strategy. An important part of that strategy is the direct lending program discussed at length at page 28. Other issues still to be decided include: • Other measures to encourage new rental supply and new affordable rental supply • Measures to preserve and rehabilitate the existing stock of affordable housing, including moderate rent accommodation in the for-profit sector • Rent subsidy approaches, including the extent and form of a national portable housing benefit • Programs to replace the social housing operating agreements as they expire • Programs which will be implemented by the provinces and territories (and in Ontario, the cities) CFAA is dealing with those issues with input from member associations like EOLO, and direct landlord members such as Minto and Osgoode Properties. EOLO’s information has helped to inform the national
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CFAA - RHC 2017: An overview Larry Smith and Andrew Macallum attended the CFAA Rental Housing Conference 2017 in Toronto, representing WRAMA members and connecting with property managers and landlords from across Canada. With a multitude of workshops, guest speakers and keynotes, the event was enriching and relevant. Discussions reflected a demand for creative housing products and solutions as well as challenges and opportunities resulting from the recent Rental Fairness Act 2017 that was passed by the Ontario Liberal government. CFAA President John Dickie kept workshops, receptions and the Awards Dinner on time, achieving an atmosphere of high standards and professionalism expected by the industry. In particular, the awards dinner and subsequent award presentations celebrated the efforts of those whose work makes a difference in the lives of tenants. It also reminded landlords and property managers both big and small that they are constantly working to a high standard of practice. Landlords in Waterloo Region ranging from homeowners renting out a room in their house to those managing tens of thousands of units strive to provide professional service and positive tenant experience. Attending the CFAA Rental Housing Conference provided exposure to a range of products and services in the industry that aligned with WRAMA’s mission – to actively and positively develop and sustain the integrity of its members’ business, the provision of private residential rental accommodation – in the Golden Triangle. Common themes that emerged in the many conversations among different landlords and property managers included treating tenants with dignity and respect; responding professionally to concerns and issues that arise; and striving to meet the high standard of responsibility that comes with providing rental housing in Canada. The following points and takeaways provide a sense of the hot topics that are currently confronting the industry. Photos Courtesy of Andrew Macallum
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Government legislation is creating challenges for the rental provider industry. The passing of the Rental Fairness Act in April, 2017 in Ontario seemed to reflect a few sensational media reports of landlords abruptly increasing rent at the property they owned. This legislation has applied rent control across the province to all residential rental units. The task of balancing capital improvements and emergency repairs while meeting tenant expectations for service will be even more complex. Landlords and property managers are meeting these challenges with optimism.
Conference takeaway #1 Renting a home is seen as a viable and desirable approach in Canada’s city centres.
The nature and definition of “home” changes depending on where a person lives in Canada. Most Canadians live outside of a major city centre like Toronto and Vancouver, and have embraced the range of affordable housing solutions that are offered, including lower rents and house prices. The urban lifestyle is unmatched in suburban and small town communities across the country. With public transit, professional sport teams, community services and a spectrum of diversity, many Canadians opt to rent a home that is a short walk or ride away to these experiences. Landlords and property managers are striving to keep home offerings updated and aesthetically pleasing to meet the high standard of expectation and remain competitive in the marketplace. Given the price of owning a residence in some city centres, different living arrangements are emerging as an alternative to straight home ownership including house sharing, second-suite construction and renting privately owned condos.
Photo courtesy of www.vancouver.ca
Photo courtesy of Shutterstock
Discover the benefits of being a member of our association: e mission of the Waterloo Regional Apartment Management Association is to actively and positively develop and sustain the integrity of its members’ business – the provision of private residential rental accommodation – in Waterloo, Kitchener, Cambridge, Guelph and surrounding areas. To view the full range of valuable property management resources we oﬀer our members, or to apply online go to http://wrama.com/, or contact WRAMA at 519-748-0703. 50 | july/aug 2017
Conference takeaway #2 The increasing use of social media and software platforms are providing tenants a greater ability to provide feedback to landlords, make rental payments, view potential units and create communities in their buildings.
Payment and property management apps hold a key role in providing a positive tenant experience. Continually pushing to a higher standard, these products are being incorporated into property management plans more and more. Comments from some property managers highlighted a change in their role over the past decade, from a focus more on the business side of things to one that includes a more socially supportive approach like holding tenant consultation meetings and community events.
Conference takeaway #3 It is worth investigating where technology can provide efficiencies and support your business. Staff use of mobile apps and handheld devices is changing the way property managers deliver services to tenants.
In other news, the September meeting for WRAMA will include a panel of local experts who will speak about the various facets of residential rentals in Waterloo Region. Panel members will have no trouble speaking to the growth and excitement that continues to fuel our diverse community. The region continues to move closer to completing the LRT; development continues in Cambridge with the new Gaslight District; and the King Street corridor yields a lot of construction with building occurring through downtown and midtown Kitchener through to uptown Waterloo. Student property managers are gearing up for another school startup at Conestoga College, Wilfred Laurier University and University of Waterloo. Photo courtesy of www.therecord.com
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Staying informed of new developments President’s message We work in an industry where property managers can’t blink or they will miss important developments. The changes to the Residential Tenancies Act will be featured in a discussion at our general meeting on October 10. Be sure to watch LPMA’s Facebook page and website for details. Additionally, LPMA is hosting the annual Night at the Knights on October 13. Network with colleagues and cheer for the London Knights as they take on the reigning Memorial Cup champions, the Windsor Spitfires. November is Property Management 101 month. The seminars offer an opportunity to hear some of the best in the industry discuss topics such as the legal requirements of landlords and tenants, rental applications and leases, maintenance, as well as renting and marketing properties. LPMA has added November and February to our dinner and general meetings. Click on the events tab of the LPMA website to stay informed of upcoming speakers. — Shirley Criger, Property Manager, Gateway Property Management Corporation
Steps for avoiding problems in a new tenancy In an ideal world, landlords would screen prospective tenants thoroughly, communicate well and operate their businesses professionally. The end result would be solid landlord-tenant relationships founded on mutual respect. However, not following common-sense principles can create serious problems for landlords, not the least of which are wasting time and money, and creating legal issues for themselves. London lawyer Joe Hoffer says it’s important for landlords to keep the relationship on a professional, formal level and not to try to become the tenant’s friend.
“That sets the tone for the relationship and I think it encourages both parties to respect each other through the course of the relationship,” Hoffer says. Screening prospective tenants carefully is the first step and entails using a proper rental application and doing credit and reference checks. Many small landlords don’t screen applicants properly. “Maybe they’re desperate to rent and they make a hasty decision or they feel sorry for somebody,” Hoffer says.
A properly drafted industry lease recognized by the industry and Landlord and Tenant Board members is another critical tool. If a dispute arose, the lease or the Residential Tenancies Act (RTA) would provide direction for resolving the problem because there is consistency in its interpretation, Hoffer says. That isn’t the case, however, with private agreements that some landlords draft on their own or generic leases. They don’t comply with the Ontario legislation “and that’s where you run into substantial problems,” Hoffer says. Issues often arise when small landlords and tenants agree to add clauses to the lease. Hoffer says one of the worst involves landlords who lower the rent in exchange for the tenant’s agreeing to perform maintenance duties. The tenant then doesn’t do the agreed-upon work, but wants to deduct the cost of the materials purchased for the project from the rent and the two parties get into a dispute. “You can see how, when things aren’t done professionally and in accordance with best practices, the relationship can get off the rails pretty quickly,” Hoffer says. Many small landlords claim that the tenant has agreed to maintain the unit, even though the RTA stipulates that landlords must maintain and repair their premises. The RTA takes precedence over any private agreement, which means landlords can’t impose restrictions on tenants that aren’t permitted under the RTA.
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“It’s really these loose arrangements that they sometimes enter into with tenants that cause the most problems,” Hoffer says. “Often, they’re not well defined.”
also be placed in the tenant’s file. Using forms that are mandatory under the RTA gives tenants confidence that the landlord is complying with the legislation.
Due to an amendment to the RTA on April 20, a provision will require all landlords to use a prescribed form of lease once the province’s regulation takes effect. However, landlords will still be able to add their own clauses to the lease, Hoffer says.
“The tenant may never read it (a specific form), but they take some comfort from it. It’s adopting and maintaining professional best practices during the course of that relationship,” Hoffer says.
“It is still likely that we will see some odd terms and conditions which are sufficiently ambiguous so as to lead to problems.”
Hoffer advises landlords to communicate with tenants if there is an upcoming event that will affect the tenant’s daily routine. If it’s major work, such as balcony renovations, landlords need to give advance notice and indicate how they will minimize the inconvenience.
Another problematic area concerns small landlords who levy charges prohibited under the RTA. They include charging interest on late payments of rent, or charging the tenant for repairing components, such as a leaking faucet, that they claim the tenant damaged. Documenting interactions with tenants is pivotal, Hoffer says. Industry leases, for example, usually have a requirement that tenants complete a maintenance request form. The landlord has a process for responding to that form, including documenting what was done to rectify the problem, who did it and when. The landlord then gives the tenant a copy, places one in the landlord’s own records and another into the tenant’s file. The tenant’s file should also include any correspondence, requests and complaints from the tenant, particularly complaints about another tenant and a record of the landlord’s response. The rental application, lease and correspondence from the landlord, including notices of rent increase and copies of inspection notices, should
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Getting off to a good start with new tenants helps to ensure a respectful tenancy and even positive references. And if problems do arise, landlords are in a much stronger position if they have to appear before the Board, Hoffer says.
“The appropriate documentation that you have in the tenant’s file will typically satisfy the Board member that you’ve been running your operation professionally and that the unreasonable party is the tenant. That goes a long way to achieving a successful outcome in those cases where things fall apart,” Hoffer says. Property Management 101 seminars, aimed at helping landlords navigate landlord-tenant relationships, will be held on November 7 and November 20 in London. Visit www.lpma.ca for more information.
London Property Management Association (LPMA) is a non-profit organization, located in London, Ontario, Canada, that provides information and education to landlords.
Membership is open to landlords and property management professionals who own or manage one or more residential rental units.
LPMA represents the interests of both large and small property owners. e association has more than 400 landlord members representing approximately 35,000 rental units.
Sign up online www.LPMA.ca, or call Brenda Davidson at 519-672-6999 for more information.
LPMA golf tournament supports Ronald McDonald House Charities Southwestern Ontario When members tee off at the 14th annual LPMA golf tournament on September 11, they will be helping to provide a home away from home for families with sick children. Funds from the tournament will benefit Ronald McDonald House (RMH) Charities Southwestern Ontario, which provides a welcoming home environment for out-of-town families whose children are receiving medical care. RMH Southwestern Ontario is part of a global network of Ronald McDonald Houses. It offers three core programs – RMH London, RMH Windsor and the Ronald McDonald Family Room inside London Health Sciences Centre (LHSC). “We like to reach out to as many local charities as we can and this one is really dear to many of us,” says golf tournament chair Brenda Trineer. “It gives us an opportunity to help families whose lives have been uprooted because of a health crisis. You just want to do whatever you can to support them during such a difficult time.” Last year, the tournament raised $14,000 for Merrymount Family Support and Crisis Centre. This year’s event is off to a record-setting start, says Trineer, with registration and sponsorships selling out in only 10 days. “We’ve created new sponsorship levels just to keep it coming and we have a waiting list to play as well.” The tournament provides a valuable opportunity for LPMA members and associate members to get to know each other.
“The relationships that develop when you join LPMA are incredible and this event really brings everyone together,” Trineer says. The funds raised will support RMH Southwestern Ontario’s mission to ease the financial and emotional burden on families with a hospitalized child. Last year the chapter provided 14,083 overnight stays and served 2,789 families with sick kids. RMH London is located less than 200 steps from Children’s Hospital, LHSC. The average visit is seven nights, but families are able to stay as long as they need, with some staying up to a year depending on the type of treatment their child is receiving. To qualify, families must live at least 30 kilometres outside the city.
Families are asked to pay $10 a night, but no one is turned away due to an inability to pay, notes RMH communications associate Brianna Evans.
“Here in London we grew from a 17bedroom home just over five years ago to 34 bedrooms today and have an occupancy rate of over 90,” she says. Local families with a sick child can access the RMH Family Room London, located inside LHSC. Here, they can take a quick break from the hospital environment, refresh themselves with a shower or catch up on some sleep in one of three bedrooms. RMH Windsor opened its doors in May and is the first Canadian RMH located inside a hospital. The charity receives no government funding and relies on community donations and third-party events such as the LPMA golf tournament for more than 45 per cent of its annual revenues. “Some of our families spend months and months living here, not knowing how things will end,” Evans says. “We try to provide a sense of normality to our families who are going through such a chaotic and stressful situation. Every donation makes an impact.”
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Rental housing industry under attack The rental housing industry is again under attack.The attacks are coming from a number of sources, they are coming fast and they are well organized.
Association) has been working hard to achieve that, as have many other landlord organizations across the province and country.
ACORN (Association of Community Organizations for Reform Now) is getting more active on rental housing issues in Hamilton and elsewhere. Despite its name, ACORN primarily consists of low-income people. Many live in public housing.
One of the major hurdles we face is connecting with landlords. We know the large landlords and most of them are members, however there are large numbers of smaller landlords we are unable to reach. Many smaller landlords have one or two rental properties, either single-family homes or condominiums. These are their investment but their main occupation is not renting housing.
It is unfortunate that ACORN’s leaders do not see that the problems their members experience stem from a lack of skills to earn good income, and a lack of choice in housing. What they need to be better housed are more landlords who want to supply their members. Instead, ACORN petitions Hamilton City Council for landlord licensing. That would make fewer people willing to invest in rental housing and result in fewer options for their members. Other groups take similar counter-productive approaches. In June last year, a tour of Hamilton was organized to show investors the potential for investing in Hamilton. About 20 disguised anti-gentrification protesters ambushed tour-goers at Tim Hortons Field, pushed some around and sprayed them with apple juice and other liquids. So much for encouraging investment in Hamilton. The provincial government recently tightened rent control by making all buildings subject to the guideline rent increase limit of 1.5% (for 2016, and 1.8% for 2017), regardless of how much more landlords’ operating costs increase. Various groups call for the elimination of above-guideline rent increases and the elimination of vacancy decontrol. Unfortunately, all of the changes that are being suggested are counterproductive. There are two major issues with this industry: first, the shortage of new purpose-built rental construction, and second, the lack of funds to pay for the upkeep of buildings. What is needed to address both problems is more investment in rental housing, not less. Yet tenant advocates want measures to keep tenants’ costs down today, raising landlords’ costs, which works against the need to encourage investment in rental housing. Tenant groups and tenant advocates are getting more active, and landlords need a unified voice and more engagement. HDAA (Hamilton & District Apartment
I find that some people who invest in rental properties do not talk about being in the industry with friends and colleagues who are not in the industry. They don’t want to say that they are landlords. As well, many of the small landlords did not understand the need to be politically active either individually or working through an association. As an industry, we need to make a concerted effort to engage all landlords in HDAA and Ontario, as well as Canada’s other apartment associations.This is not something that can be achieved through action by the association board or staff alone. We need all members to be proud to be a landlord and proud of the work of the associations. All members need to talk to other rental owners and to encourage every owner to participate. — Arun Pathak, President, HDAA
Small/Medium Landlord Issues Roundtable One panel at this June’s CFAA Rental Housing Conference discussed internal and external challenges that affect medium and small landlords, and how they address those concerns. They also discussed how to grow your business, and provided key takeaways and suggestions. Panelists included Arun Pathak, President of HDAA and President of SMAR Holdings Ltd. and Gloria Salomon, CEO of Preston Group, while Patti-Jo McLellan Shaw, President of Hapfield Development, moderated. A common challenge for medium and small landlords is staffing, as each person has to handle a number of different roles (i.e., wear many hats) rather than be specialists. They can address these shortcomings by joining a landlord association, which will help them to learn best practices in human resources, marketing, social media, tenant relations, health and safety, and more. For example, HDAA offers seminars on a wide range of topics that would benefit superintendents and other employees who work for medium and small landlords.
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Municipal licensing has become a growing concern, particularly in Hamilton. The government believes that licensing will fix a number of problems throughout the rental housing industry, although the real issues are around student housing. Landlords cannot control student behaviour, and the lack of available housing for students has made the issue worse. Connected to licensing is the anti-landlord mentality, which is tied to the quality of housing and the cost to maintain properties. Tenants want better properties but don’t want to pay higher rents that come from upgrading properties. Affordability is a real issue, and forcing people to pay a registration fee to offer basement apartments and rental units in their homes has prevented growth in this area. Following from the anti-landlord mentality is the rise of “tenant schools,” where tenants are learning about rental housing regulations, and how to take advantage of them. This is a growing concern, as tenants are using the rules to push for rent strikes, stay in units for months without paying and force landlords to upgrade units without increasing rents. Training is key to dealing with these types of issues, as well as providing a high level of customer service and maintaining tenant relations. Staff are involved in many different aspects of running a rental property, and are key to the success of your business. However, because they are always at the building, superintendents can turn a blind eye to little issues (like broken locks) that can become an epidemic. That’s why it’s important to hire good people, and train them well. Being a member of a rental housing association can help with staying on top of the laws enforced through the Landlord-Tenant Board, as well as human rights legislation.
living in newer units. Landlords could also grow by providing third party property management services to other landlords in their area. There was some debate about whether or not to purchase similar buildings where the owners of family-run businesses are divesting for succession planning purposes. While it can be a good model for growth, lower cap rates indicate that potential buyers should exercise caution before jumping into a purchase. There was also discussion about how best to make use of excess land. With lower interest rates and good financing options, property owners could add more units by expanding rental properties or constructing new buildings on that land. Another option is to sell vacant land to other developers, as the numbers will not work in certain areas unless higher densities are obtained. Panelists offered advice to new landlords, which included investing in their education to understand all aspects of running their business. Joining a local association is a good step in the right direction, as it will allow them to gain knowledge and develop relationships with experienced landlords, as well as get support when needed. It is also important to be comfortable with staff, and vice versa, and to be hands on with taking care of your assets.
Another topic was growing your business with limited financial leverage, which is an issue for medium and small landlords competing with newer condos. One suggestion was to use down time (when units were empty) to invest in new kitchens and bathrooms to obtain increased rents, and attract tenants who are interested in
Hamilton and District Landlords Since 1960, the Hamilton and District Apartment Association has grown significantly. Our member landlords and property managers manage in excess of 30,000 units throughout Hamilton, Burlington, Brantford, Guelph, Mississauga, Oakville, St. Catharines and into the Niagara Peninsula. e association is a highly respected organization, sought out regularly by government, industry, media and the public. To join, submit the application form available at www.hamiltonapartmentassociation.ca, or contact HDAA at 289-208-5445. 58 | july/aug 2017
Recent Events June Golf tournament on June 13 – HDAA had another fantastic golf day with new games and sponsor trophy for best hole. BEST HOLE SPONSOR: HCS Contracting Inc. They had a fun “Scrub it off” contest at their hole.
CLOSEST TO THE PIN: Jen Daniel & Joe Hoffer Morning education seminar: Human Rights Code on June 28 – Ronnie had another informative session about the human rights code. We plan on doing it again so if you missed it make sure you sign up for the next one!
Upcoming Events September Dinner cruise on September 13 – Join us to see Hamilton from a different view – from the Harbour! Dinner, music and cruising around – it should be a fantastic night!
TOURNAMENT WINNERS: The Mark Loeffler Team (Mark Loeffler, Sebastien Dussault, Brandon Dyment, Kaely Hurren) won with a score of 54!
October Dinner meeting on October 18 – Joe Hoffer, Cohen Highley: Bill 124, The Fair Housing Act
November LONGEST DRIVE: Steve Ford & Julie Maue
Dinner meeting on November 8 – Topic: TBA
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