FE Magazine - Spring 2023

RENTAL DEMAND SURGED IN 2022, LEAVING THE VACANCY RATE AT A NEAR-HISTORIC LOW

WORDS MATTER: CHANGING WHAT WE SAY IN PROPERTY MANAGEMENT

REVOLUTIONIZING RESTORATION

THE VOICE OF THE FEDERATION OF RENTAL-HOUSING PROVIDERS OF ONTARIO

President's Message

After an unusual winter for many, spring is in the air and with it more sunshine and reason to be optimistic for the year ahead! FRPO has been hard at work in many areas and I always appreciate the opportunity to provide an update to our members in this column.

I am thrilled to share that FRPO welcomed the return of our annual CHMC Rental Market Breakfast in-person. In partnership with our friends at GTAA, over 200 people came out to listen to insightful presentations from Dana Senagama and Jeremy Tessier from CMHC. I would also like to thank Kellie Speakman from Preston Living, Margaret Herd from Park Property Management, and Jonathan Brimmell from Oxford Properties for participating in a spirited panel discussion. We received tremendous feedback from many attendees.

As part of FRPO’s ongoing participation in public policy discussions regarding Ontario’s housing crisis, I was honoured to join a panel with Romy Bowers, CEO of CMHC, Tim Hudak, CEO of the Ontario Real Estate Association, and Ene Underwood, CEO of Habitat for Humanity GTA at a roundtable event put on by the CD Howe Institute called Brick by Brick, Building Ontario’s Housing Supply. These are important opportunities for FRPO to educate and advocate for between much-needed rental housing supply and specific polices to encourage and incentivize purpose-bult rental housing.

Registration for our 2023 RTA Sessions is now open and we have received a positive response with virtual and in-person options. As one of FRPO’s most popular events, I know this year will prove to be an invaluable update on landlord and tenant law with our expert presenters, so don’t miss out.

TONY IRWIN President & CEO FRPO

FRPO continues to engage with government officials in the Office of the Premier, as well as the Ministry of Municipal Affairs & Housing and the Ministry of the Attorney General. We expect the government to introduce another Housing Bill this spring, and FRPO has provided advice to support more supply and improve operations at the Landlord & Tenant Board, which we know requires urgent attention. Finally, I would like to address staffing at FRPO. Over the past six months, Lechelle Cohen, Chloe Hill, and Ted Whitehead have departed the organization. All made valuable contributions to FRPO, and we wish them well. I want to assure our members that while we are in a time of transition, FRPO is operating as usual. We have recently welcomed Melanie David to the team as Executive Assistant and Administrative Co-ordinator. I'm sure many you will meet her in the coming weeks. Don't forget we have the Spring Social coming up on April 20 immediately following Springfest. We hope you can join us. Thank you for your support, and don’t hesitate to reach out with ideas, feedback, or just to say hello!

2023 RESIDENTIAL TENANCIES ACT SESSIONS

An essential review of landlord tenant law With the many provisions contained within the Residential Tenancies Act and its regulations, it can often be difficult to navigate changes, especially in the current operating climate. As rental housing providers, it’s important to understand your rights and responsibilities under the RTA. This year, our sessions will focus on a variety of relevant topics including intertenant conflicts, recovery of rent arrears, unauthorized occupants, AGIs, and the Human Rights Code. Our presenters will also provide important updates from the Landlord and Tenant Board and current timelines for various hearings. Our sessions will also look at case examples from the LTB and Divisional Court that have significantly affected residential tenancy law this past year.

For registration information and full topic list: VIEW EVENT BROCHURE HERE

EVENT DATES

We are pleased to provide virtual and in-person options for this year’s RTA sessions. Our webinars will take place throughout the month of April in two parts, and on May 10, we will return to the Old Mill Toronto for our half-day format. All registrations include electronic materials that will be circulated to attendees in advance of their sessions. Space is limited, so register early!

Webinars

These sessions will take place in two parts:

Part 1: Wednesday, April 5, 9:30 am – 11:45 am

Part 2: Tuesday, April 18, 10:00 am – 11:15 am

Part 1: Thursday, April 13, 9:30 am – 11:45 am

Part 2: Tuesday, April 18, 10:00 am – 11:15 am

Part 1: Tuesday, April 25, 9:30 am – 11:45 am

Part 2: Friday, April 28, 10:00 am – 11:15 am

In-person session

Includes full breakfast

Wednesday, May 10, 8:00 am – 12:00 pm at the Old Mill Toronto

PM SPRINGFEST

Date and Time: April 20, 2023

9:00 am - 2:30 pm

EXCLUSIVELY FOR PROPERTY MANAGEMENT PROFESSIONALS

Equip yourself with new information and technologies to better position and optimize your buildings as well as expand your professional network! PM Springfest brings together property management professionals to connect with leading suppliers, explore new innovations, and learn from industry experts about the latest regulatory, health, and life safety changes; efficient energy management strategies; retrofitting aging buildings; essential capital planning details; and much more. Find out more here.

FRPO SPRING SOCIAL SPONSORED BY WYSE METER SOLUTIONS

Date and Time: April 20, 2023

2:00 pm – 5:00 pm

Please join us at this year's Spring Social proudly presented by Wyse Meter Solutions. This exclusive FRPO Member event will take place immediately following SpringFest. Advance registration is required and space is limited. We hope to see you there.

CFAA-RHC 2023

Date and Time: June 14 – June 16, 2023

8:00 am – 4:00 pm

Registration is now open for CFAA-RHC 2023 in Halifax, June 14 to 16 at The Westin Nova Scotian. Click here for more information.

2023 FRPO CHARITY GOLF CLASSIC

July 18, 2023

9:00 am – 7:30 pm

This popular event will take place on Tuesday, July 18 in support of Interval House. We are pleased to announce this year’s tournament will take place at Lionhead Golf Club. More information about this event will be provided later this spring. Save the date!

Yes, we can!

Since MetCap Living established itself as a leader in property management, we have routinely been asked one, simple question; “Can you help us run our property more effectively?” And, for well over thirty years, the answer has remained — Yes, we can! Our managers are seasoned professionals, experienced in every detail of the day to day operations and maintenance of multi-unit rental properties. From marketing, leasing, finance and accounting, to actual physical, on-site management, we oversee everything.

Guaranteed vacancy reduction, revenue growth and net profitability — when you’re ready to discuss a better option; we’ll be there. You can count on it.

Kazi Shahnewaz Director, Business Development

Office: 416.340.1600 x504

C. 647.887.5676

k.m.shahnewaz@metcap.com

www.metcap.com

GOVERNMENT RELATIONS UPDATE

By Tony Irwin, President & CEO, Federation of Rental-Housing Providers of Ontario

Members of the Legislative Assembly returned to Queen’s Park on February 21 for a new session. Since then, FRPO has increased our engagement with officials in the Office of the Premier as well as the Ministry of Municipal Affairs & Housing and the Ministry of the Attorney General. We expect the government to introduce another Housing Bill this spring, and FRPO has provided advice both to support more supply and improve operations at the Landlord & Tenant Board, which we know requires urgent attention. Specific recommendations include:

• A density incentive program for purpose-built rental projects in communities with low vacancies to help improve project economics for rental versus condominium

• “As of right” infill development on existing purpose-built rental sites that could accommodate an additional 176,000 units through infill development

• Changes to the tax system to incentivize more attainable housing by rebating or deferring HST to a later period in the project lifecycle, such as when the building is sold

• The Ministry of the Attorney General and Ministry of Municipal Affairs & Housing should conduct an analysis on the precise resourcing increase required to meet the LTB’s own service standards and commit to providing the necessary funding

In addition, FRPO has also recommended government-exempt rental operations registered as condominiums from oversight from the Condominium Management Regulatory Authority of Ontario until a unit is sold as a condominium. On March 8, Private Member’s Bill 47 entitled Protecting Human Rights in an Emergency Act was defeated on a Second Reading vote in the Legislature. If passed, the Bill would require all rental housing providers and condominium corporations to have emergency power generators so that in the event of a power outage, including the ones outside of your control, certain services and facilities are functional for at least two weeks, and not recoverable with an AGI. During debate, the Parliamentary Assistant to the Minister of Municipal Affairs and Housing Kevin Holland quoted a statement from our President and CEO Tony Irwin opposing the Bill, which was also provided to the Ottawa Business Journal.

On the research front, FRPO recently partnered with the Building Industry and Land Development Association to release a report on the current state of the market for purpose-built rentals in the GTA. The report found that renter households grew more than three times faster than the number of owner households in the last 10 years. Within renter households, purpose-built rentals are the most common form of housing, but only 9% of the share of total rental supply in the past 10 years was purpose-built rental. The report determined we need more than 300,000 rental units over the next decade to meet demand, and rental projects are taking an average of 100 months between initial application and project completion. Work is also under way with KPMG to complete an updated economic impact study of the rental housing industry in Ontario, as well as housing policy paper with the C.D. Howe Institute.

Trusted Advisors

ƒ Philip Sarvinis | Bill Gladu | Jeremy Horst | Michael Pond | Duncan Rowe Jack Albert | Beau Gaudreau | James Cooper | Michael Park | Tim Van Zwol

INTERVAL HOUSE GRATITUDE REPORT 2022 UNLOCKING LIFE’S POTENTIAL

Partner Spotlight: Tricon Residential Inc.

“We want to provide safe havens where moms can raise their children, reintegrate into the workforce, and build a strong and supportive community.”

- Sarah Hicks, Senior Director, Operations

The visionary women who founded Interval House 50 years ago had the courage to innovate to make their dream a reality. Today, our valued community partners keep their mission alive, adapting and innovating to better serve women seeking safety from violence.

Tricon Residential is a rental housing company dedicated to providing an exceptional rental experience to every resident they serve. We’re thrilled that Tricon has partnered with us to refer clients to affordable rental housing units among their developments in the City of Toronto.

Like Interval House, Tricon is committed to bettering the lives of the people who live in our community. The company understands that women recovering from intimate partner violence need safe and affordable places to live, and that housing is a basic need that goes far beyond just bricks and mortar – it also provides community, safety, and opportunity.

“We believe that quality rental housing can unlock life’s potential,” says Sarah Hicks, Senior Director, Operations. “We want to provide safe havens where moms can raise their children, reintegrate into the workforce, and build a strong and supportive community.”

Tricon is offering 21 units to clients in our BESS program at a subsidized rate of either 40% or 80% of Average Market Rent. The first set of these units will be available to our clients starting in spring 2023.

Behind the spark of every great idea is someone who shares the same passion for the vision, sees its potential, and provides the means to propel it forward.

We’re so grateful to Tricon Residential for being an exceptional community partner. Thank you for standing alongside Interval House to help survivors of intimate partner violence rebuild their lives with dignity and security.

To view the 2022 full Gratitude Report, please click here

National Apartment Group - Ontario

Ontario’s multi-residential sector remains one of the most resilient segments of commercial real estate capital markets. Notwithstanding broader market volatility, investor sentiment for multifamily assets remains positive. Through Q1 2023, values have weathered the impact of higher borrowing costs and are well-positioned to counteract higher inflation and interest rates through stable and continued cashflow growth. Please see below for a summary of recent deals as of Q1 2023. For additional info on cap rates, current valuations, and market trends in a changing investment landscape, please reach out to a member of our team.

800 Eagleson Road, Ottawa

143 Units | $426,573 Per Suite

Closed February 2023

SOLD FOR $61,000,000

3171 Bathurst Street, North York

47 Units | $289,362 Per Suite

Closed January 2023

SOLD FOR $13,600,000

For more information, please contact:

David Montressor * Vice Chairman

(416) 815-2332

david.montressor@cbre.com

2303 Eglinton Avenue East, Scarborough

169 Units | $295,858 Per Suite

Closed December 2022

SOLD FOR $50,000,000

Tom Schuster * Associate Director

(416) 847-3257

tom.schuster@cbre.com

69 Old Mill Terrace, Etobicoke

26 Units | $326,923 Per Suite

Closed January 2023

SOLD FOR $8,500,000

Scan to receive Apartment Listings and Market Research

* Sales Representative

NEWS RELEASE

MINISTRY OF HOUSING AND MUNICIPAL AFFAIRS

Ontario Announces Housing Supply Action Plan Implementation Team Members

TORONTO — Today, the Ontario government announced the members of the Housing Supply Action Plan Implementation Team. The new members join Chair Drew Dilkens, the Mayor of Windsor, and Vice Chair Cheryl Fort, the Mayor of Hornepayne. The team will evaluate progress and provide advice on implementing Ontario’s Housing Supply Action Plans and tackling Ontario’s housing supply crisis.

The new members are:

• Marlene Coffey, Chief Executive Officer, Ontario Non-Profit Housing Association

• Simone Swail, Senior Manager, Government Relations, Co-operative Housing Federation of Canada

• Adam Brown, Founding Partner, Sherman Brown

• Jim Harnum, Founder, Municipal VU Consulting Inc.

• Tony Irwin, President and CEO, Federation of Rental-housing Providers of Ontario

• Richard Lyall, President, Residential Construction Council of Ontario

• Paula Tenuta, Senior Vice President, Policy and Advocacy, Building Industry and Land Development Association

“I’m pleased to appoint seven experts to our Housing Supply Action Plan Implementation Team,” said Steve Clark, Minister of Municipal Affairs and Housing. “Their advice and broad range of experience in municipal planning, the notfor-profit sector, and the housing industry will get more homes built faster and help us reach our goal of 1.5 million new homes by 2031.”

The government recently introduced a series of measures, including More Homes for Everyone and More Homes Built Faster, to deliver both near-term solutions and long-term commitments to build more homes faster to put home ownership within reach for all Ontario families.

“We’ve developed policies and reduced red tape to help address Ontario’s housing supply crisis,” said Michael Parsa, Associate Minister of Housing. “The Housing Supply Action Plan Implementation Team will help us assess how those plans are working and help more Ontarians find a home that meets their needs and their budget.”

The team will have its first meeting in the coming weeks.

RENTAL DEMAND SURGED IN THE VACANCY RATE AT A NEAR-HISTORIC

This February, CMHC released its annual Rental Market Report for large population centres across Canada. According to the report, the vacancy rate for primary rental apartments in the Greater Toronto Area fell to 1.7% in 2022, from 4.4% in the previous year. This was a level more consistent with the 10-year pre-pandemic (2010–2019) average of 1.5%.

Higher net migration and costs of home ownership are among the drivers of higher rental demand across Ontario. Strong growth in rental demand across the province reflects:

• Significantly higher net migration, as flows continue to benefit from relaxed COVID-related travel restrictions (new immigrants have a high tendency to rent)

• Stable employment conditions for those aged 15–24, supporting demand from young households, which also have a higher tendency to rent

• A higher overall propensity to rent (caused by mortgage rate increases and relatively high prices, which increased the costs of transitioning to home ownership)

Rent growth surges in the GTA

There’s little doubt that increased competition for fewer units causes strong rent growth in the primary market. The same-sample average rent for a two-bedroom apartment has grown by 6.5% in 2022, well surpassing the 1.5% increase recorded in 2021. When isolating for units in the same structure that turned over to a new tenant, the change in the average two-bedroom rent is markedly higher, at 29%. Rent increases for most units that didn’t turn over are limited to the provincial increase guideline (1.2% in 2022). This reflects the fact that, once a tenant vacates a unit, landlords are generally free to increase asking rents to current market levels. Landlords can also take the opportunity to renovate between tenants. In doing so, they raise unit quality and can then ask for higher rents from new tenants.

Tight rental market conditions symptom of low supply

While the recovery in the labour market brought vacancy rates in the GTA back to pre-pandemic levels, it highlights again the underlying issue of low rental supply. The GTA’s primary rental apartment universe has increased by 2.1%, or 7,175 units, in 2022 from the previous year. This is the strongest increase in recent decades and is due to elevated rental completions in recent years. While rental supply increased, it hasn’t offset the growth in demand. Moreover, access to affordable supply remains a challenge for low and middle-income renter households (the second- and third-income quintiles). For instance, units affordable to these households have the lowest vacancy rates in the GTA. Meanwhile, the average rent for new supply entering the market is 45.4% higher than the average rent for all units. Newer units can only be affordable to households in the higher (fourth and fifth) income quintiles.

CMHC can help to increase supply

To provide housing choice for Canadians, CMHC offers financial incentives to create the needed supply of purpose-built rental units. With many challenges affecting project viability, our programs can help to ensure projects move forward.

IN 2022, LEAVING NEAR-HISTORIC LOW

CITREX Attn: Vladyslava Kapustina

T: 800-643-6922

C: 416-877-9229

info@citrex.ca

COHEN HIGHLEY LLP

Attn: Kristin Ley

T: 519-672-9330

F: 519-672-5960

100 Sheppard Avenue

Toronto, ON M2N 6Z1

On February 22nd, 260 FRPO and GTAA members gathered at Parkview Manor for the annual CMHC Rental Market Survey Breakfast. This event was very well- supported and it was great to be back in-person. Dana Senagama and Jeremy Tessier presented on behalf of CMHC and provided a through summary of the market conditions as well as programs available to rental housing providers.

301 Matheson Boulevard

ley@cohenhighley.com

Our session concluded with a panel session featuring Margaret Herd of Park Property Management, Kellie Speakman from Preston Group and Jonathan Brimmell of Oxford Properties. This panel was moderated by our President and CEO Tony Irwin and gave our audience valuable insight into what they are seeing in the market. Thank you to everyone who attended this event as well as our speakers and panelists.

Mississauga, ON L5R

Our Rental Construction Financing Initiative (RCFi) provides low-cost funding to eligible borrowers during the riskiest phases of product development of rental apartments (construction through to stabilized operations). Through this initiative, the CMHC continues to work diligently with new and existing clients by offering solutions and flexibilities to support projects that can increase new rental supply in Canada.

consultation process with participants from across the country, we are pleased to offer MLI Select. Industry consultations revealed that borrowers are interested in providing affordable and climate compatible units to the marketplace as long as their organizational and business goals are still achievable.

DELTA ELEVATOR CO. LTD.

Attn: Jeff Righton

T: 905-828-4423

RCFi has generated significant interest in the housing industry, which has led to multiple expansions of the program. Through Budgets 2018, 2019, and the 2020 Fall Economic Statement, the Government of Canada increased the total amount available in low-cost loans to a total of $25.75 billion.

F: 519-745-7587

jrighton@delta-elevator.com

Last March, CMHC launched a new multi-unit mortgage insurance product. Following an extensive

With MLI Select, borrowers are offered a range of incentives such as reduced premiums and longer amortization rates based on their level of commitment to affordability, accessibility, climate compatibility, or a combination of the three. This choice-based offering is designed to maximize outcomes in accordance with the fiscal realities and challenges different borrowers, projects, and markets face. Thus, any costs or forgone revenue required by the product parameters can be reasonably offset by the flexibilities provided.

366 Westpark Crescent

Waterloo, ON N2T 3A2

MLI Select and RCFi are key products to help us achieve our 2030 aspiration of ensuring everyone in Canada has a home that they can afford and that meets their needs. To find out more about these or other CMHC products, reach out to the Affordable Housing Centre Ontario at ahc_ON@cmhc-schl.gc.ca

WORDS MATTER: CHANGING WHAT WE SAY IN PROPERTY MANAGEMENT

By Theresa Lapensée, Regional Manager, London & Hamilton, Medallion

Property managers have long understood the importance of effective communication with their residents. From the initial leasing inquiry to the information we provide during an emergency, effective communication sets the tone for a positive relationship.

In today’s rental market, the choice of words and how we use language carries a renewed importance. Identity politics continue to shed light on how language has power in social relationships. As rental providers, we understand the importance of providing flexible housing and services to varied groups of residents. In particular, COVID-19 led to a deeper understanding of resident experience and needs. But, sometimes the “older way of doing things” prevails in property management.

Consider these examples:

• Company A markets their communities as inclusive but when a new client visits the leasing office, they are told that building one is for students and building two is for immigrants.

• Company B has a varied workforce but the site staff use phrases such as maintenance men and the office lady when communicating to residents.

In both of the above examples, assumptions, stereotypes, and bias are at play and they portray a non-inclusive environment to a customer. The above scenarios have the potential to make new or existing residents feel excluded or discriminated against.

Take as another example the word “landlord”. The origin of the word is male and refers to a master or feudal system of land ownership. This is not reflective of the quality of housing, amenities, and on-site services that rental providers offer in today’s market.

Consider how replacing the word “tenant” with “resident” alters the perception of the power dynamics in the rental relationship. Being inclusive with language is not only socially conscious but also helps to retire the long-held narrative that landlords hold power over tenants and tenants lack rights. This is a common refrain among tenant advocacy groups. Let’s use language to convey the fact that rental providers and residents can and do support each other. We take care of rental homes and communities and residents care and stay in their homes.

So how can we change our words for the better in property management?

A few ideas include educating employees on diversity and inclusivity, updating notices and signage to include inclusive language, being open with employees on these topics, and creating policies on verbal and written communication.

The use of inclusive language provides an environment of belonging to residents and employees alike and reiterates the leadership role the rental industry plays in our communities.

Theresa Lapensée

LET’S BUILD ONTARIO CAMPAIGN UPDATE (MARCH 2023)

Over the past weeks and months, the Let’s Build Ontario campaign has continued its efforts to promote inclusive ideas for more rental housing supply as the solution to the current housing supply and affordability crisis. The main focus was promoting through traditional and social media conversations some of the challenges and issues rental housing providers face. The campaign did this in two main ways.

The primary way was to be proactive with social media communications, highlighting challenges and solutions in Ontario’s purpose-built rental housing market. As part of this approach, Let’s Build Ontario continued to educate the public at large about some of the key topics and components of the rental market. Some of the main topics included education about the role and current situation of the Landlord and Tenant Board, the need for more skilled trades jobs and training to build the housing supply we need to meet demand and provincial goals, and highlighting challenges in the current market, from low availability of units to rising costs. It is the goal of the campaign to provide a broader view of the purpose-built rental housing market with all its components and generate healthy debate around rental housing that goes beyond sensationalistic headlines.

In the same vein, Let’s Build Ontario continued with efforts to provide a voice for rental housing providers in traditional media outlets as well. After the release of the FRPO-BILD Report on the need for more rental housing in the GTA, Let’s Build Ontario helped amplify the voice of rental housing providers by coordinating media appearances for FRPO President and CEO Tony Irwin on CBC and Newstalk 1010 among others. Mr. Irwin also appeared in Rentsync’s Sync or Swim podcast to talk rental housing, as well as being quoted in a recent Storeys piece on the

challenges rental housing providers are facing in the current overheated market. Let’s Build Ontario is also continuing efforts to highlight stories and solutions more proactively from the purpose-built rental housing perspective in traditional media.

The campaign also helped promote important industry-wide events on the need for more housing supply of all types, such as the C.D. Howe Institute roundtable luncheon on building more housing supply in Ontario, which was attended by Mr. Irwin, OREA CEO Tim Hudak, Habitat for Humanity GTA CEO Ene Underwood, and CMHC President and CEO Romy Bowers. All-inclusive events featuring different players in the housing market are important for creating a balanced discussion around the need for more housing supply.

Moving forward, Let’s Build Ontario will continue to seek opportunities to promote fair solutions to the housing crisis that work for all Ontarians. The campaign continues to encourage everyone to get involved by offering their opinions, advancing the challenges they are facing, and joining the campaign in calling on all stakeholders, as well as the general public and all levels of government to work together to ensure all Ontarians have a quality home that fits their needs. For more information on the campaign, or to get involved, visit the Let’s Build Ontario website at https://letsbuildontario.ca/ Let’s Build Ontario together.

AVERAGE ONTARIO RENT INCREASES TO Q4 - 2022

By John Dickie, President, Canadian Federation of Apartment Associations (CFAA)

As has been reported in the media, rental demand is strong and rents are rising. However, for most renters who renew their tenancies, increases are limited to the annual guideline, which was 1.2 per cent in 2022.

That guideline increase is significantly below the current rate of inflation, which was 6.0 per cent to year end 2022. (Since December 2019, the cumulative guideline increase has been 3.4 per cent, while inflation in Ontario has been 12.3 per cent.) Many rental providers have faced even higher increases in insurance costs, repair costs, and financing costs.

Ontario’s rent control system allows rental housing providers to catch up with those excess cost increases by moving rents to market when renters vacate and new renters move in at a rent they negotiate. Each month that move to market applies to a small fraction of the units in each portfolio, but over time it serves to allow overall rental income to rise more in line with cost increases than the guideline alone allows. In turn, the increase in total income pays for building upkeep, modernization, and renewal, making for better and more plentiful rental supply.

For the last year, Yardi Systems has been reporting on the average rents of their customers in each large CMA. Inplace rents are all the rents in each building. Turnover rents are what the name indicates. Table 1 shows the rental data for Quarter 4 – 2022.

As readers will know, CMHC reports on vacancies, rents, and rent increases only once per year, and four months after the effective date of October 1 each year. CFAA is in contact with CMHC to see whether it can produce more up-to-date rental data for the whole of the rental market. CMHC is interested in obtaining data by uploads since the largest cost of its current system is in data collection.

The rental industry expects CMHC will do a better job of explaining the increase in average rents than the media does now, when news stories often report every month on asking rents, focused on the secondary rental market rather than purpose-built rental stock.

Table 1: Yardi rental data at Q4 – 2022 (all unit sizes)

Source: Yardi Multifamily Canadian National Report – Q1 2023

CFAA-RHC 2023: CANADA’S RENTAL HOUSING INDUSTRY VISITS HALIFAX

By John Dickie, President, Canadian Federation of Apartment Associations (CFAA)

CFAA Rental Housing Conference 2023 will take place from June 14 to 16 at the Westin Nova Scotian in downtown Halifax. Register at www.cfaa-rhc.ca, and book a hotel room now before the room block runs out!

CFAA-RHC 2023 - Schedule in brief

Wed., June 14

Building Innovations Tour

Welcome reception

Special social event

Thur., June 15

Breakfast

Education sessions, including Economic Update with Benjamin Tal Awards reception

Awards dinner

Fri., June 16

Breakfast

Education sessions

Closing address

CFAA and its partners are excited to visit Halifax, a city transformed in recent years by record-setting development. This year’s conference will feature many new projects in downtown Halifax, and the great minds behind Halifax’s modern renaissance.

Explore new trends and discuss new ideas with peers from leading organizations in Canada’s rental housing industry.

CFAA-RHC 2023 will include many timely sessions on issues that matter. Sessions will address rental development, rental operations, operational and investment risks and opportunities, human resources, EDI, and technology.

Benjamin Tal has agreed to give his Economic Update. Other sessions will likely include:

• Executive roundtable

• Operations roundtable

• Developing land or properties for mixed uses

• Converting office buildings into apartments

• ChatGPT

• Marketing

• The latest in leasing technology

• Residential smart tech and strategy

• What EDI programs work

• Cultural interactions for the best results

• Labour market strategies and trends

• The industry’s political problems, and how to deal with them

• Addressing operations issues created by new government rules

• Energy and GHG reporting and solutions

• The magic of heat pumps for buildings of all sizes

A few topics might vary as CFAA organizes speakers, and the speakers provide input on the most critical current issues facing rental housing.

Conclusion

Whether you are a rental housing owner, executive or manager, a hands-on owner or a rental industry supplier, there will be great information, ideas, and contacts for you at CFAA Rental Housing Conference 2023. Meet with other engaged individuals in the rental housing industry, exchange ideas, and see how we benefit from working together. For more information, or to register for CFAA-RHC 2023, please visit www.CFAA-RHC.ca

Act now to ensure your registration and hotel room!

Benjamin Tal

Phil Fraser

FRPO ENERGY PROGRAM PROVIDING MEMBERS WITH GREAT VALUE

By Sasha Giurici, Client Account Specialist, ECNG Energy

Over the past two years, both the natural gas and electricity markets have experienced increases and volatility that have not been seen in over 10 years. Fortunately, for those members who have been working with the FRPO Energy Program, this run-up in market prices and volatility has been a non-issue. Working closely with our energy partner, ECNG Energy Group, FRPO members have enjoyed low stable prices and weathered the uncertainty.

Currently, there is some temporary relief due to the recent, warmer than expected winter. However, we do not expect prices to return to the lows of 2020 as the demand for cheaper North American natural gas in the form of Liquified Natural Gas (LNG) continues to increase. Globally, markets like Asia and Europe pay significantly more for natural gas, and are willing to incur the marginal cost of moving LNG around the world to secure a significant discount over this domestic supply. For this reason, ECNG expects longer-term gas prices to rebound and remain strong well into the future.

With the shorter-term buying opportunity, we encourage members to look out for the FRPO Natural Gas Program, which will be coming out in early July 2023 for a November 2023 start.

In the meantime, if you have any questions or would like to learn more, please reach out to Sasha Giurici at 905-516-4588 or sgiurici@ecng.com.

LAUMAR DESIGN LTD.

L a u m a r D e s i g n i s a l e a d i n g a n d r e p u t a b l e c o n t r a c t i n g c o m p a n y b a s e d i n T o r o n t o F o r t h e p a s t 1 5 y e a r s w e ' v e t a k e n a c o m p r e h e n s i v e a p p r o a c h t o p r o j e c t m a n a g e m e n t , p r o v i d i n g c l i e n t s w i t h a w i d e r a n g e o f s e r v i c e s D e d i c a t e d s p e c i a l i s t s i n c a r p e n t r y , d r y w a l l , f l o o r i n g , d e s i g n & m o r e , L a u m a r D e s i g n L t d p r o v i d e s p r o f e s s i o n a l , e f f i c i e n t a n d r e l i a b l e s e r v i c e s f o r b o t h r e s i d e n t i a l a n d c o m m e r c i a l c l i e n t s

REDUCING RENT ON EXPIRY OF WEIGHTED USEFUL LIFE OF CAPITAL EXPENDITURES

By Heather Waese, President, SPAR Property Paralegal Professional Corporation

Any landlord who received an Order justifying capital expenditures under the transitional period of the Tenant Protection Act (TPA) and the Residential Tenancies Act (RTA) after 2006 may be required to issue rent reductions on the expiry of the weighted useful life of the capital expenditures. Most Orders issued under the TPA did not require future rents to be reduced due to a capital expenditure allowance. Only after the passage of the RTA was this section enacted. During this transition period, the wording of the Board’s Orders varied greatly. It is imperative that a landlord review the wording of their Order carefully to determine the requirements for issuing a rent reduction. This article will review the requirements for issuing a rent reduction upon the expiry of the useful life of capital expenditures.

The amortization of the capital expenditures in any given Order is based on the Schedule of Useful Life in Ontario Regulation 516/06 and can range from 10 to 25 years. The expiry of the allowance is determined by the calculation of the weighted average of the useful lives for all items claimed in the application. Given that the majority of the Orders commenced in 2008 and the average weighted life in an application is 15 years, it is only now, in 2023, that the useful life period has begun to expire. The onus is on the tenant to notify the landlord that they are entitled to the reduction. For a tenant to qualify for the reduction, the tenant who was subject to the AGI Order must continue to occupy the same rental unit under the same lease terms at the time the useful life expires. If the tenant qualifies, the landlord must reduce their rent by the same percentage rent increase that was charged pursuant to the Order. If the Order, however, included an allowance for an extraordinary increase in municipal taxes, this component would not form part of the rent reduction.

Although the awarded AGI may have been issued over a period of up to three years, the total rent increase must be reduced from the rent upon the expiry date. The date the rent reduction takes place will also depend on the date the AGI was effective for each tenant. Although some tenants may have received their rent increase at the commencement of the First Effective Date (FED) in the application, many of the increases could be delayed as much as 11 months from the FED. The date for determining when the reduction is to be given will be the day before the date of the tenant’s first rent increase under the Order, plus the number of years for the weighted useful life for capital expenditures for that unit. For example, if the tenant’s rent was increased pursuant to the Order on June 1, 2008, and the weighted useful life for the capital expenditures was 15 years, then the tenant’s rent would be reduced in 15 years less one day, on May 31, 2023.

Before responding to a tenant’s request for a rent reduction, a landlord should confirm the following criteria are met:

• The landlord should verify the tenant was in fact a party to the application and still in possesion of the unit on the expiry of the useful life. Their name would be noted in the Schedule of Parties in the Order. In addition, the Order may include Schedule 3, which will list the applicable units and the corresponding rent increase that was awarded for capital expenditures. It may be prudent to review the rent roll filed with the application to verify this information.

• The landlord should confirm the effective date of the increase in the Order for that tenant. This may not be consistent with the tenant’s current anniversary date. Economic conditions resulting from the pandemic or the legislative change eliminating the statutory guideline increase in 2021, in some cases, instigated a change in tenant anniversary dates. The reduction is required to take place based on the anniversary date at the time the AGI originally took effect. Using the example above, we will assume this tenant’s anniversary date was deferred in 2021 to January 2022. The landlord would be eligible to increase the tenant’s rent on January 1, 2023. In this example, notwithstanding the change of the anniversary date, the landlord would be required to reduce their rent as at May 31, 2023 due to the expiry of the useful life in that original Order.

• The landlord must confirm the amount of the reduction required to be given. This would be based on the actual rent increase taken by the landlord pursuant to the Order. If the Board awarded a 9% AGI, and the landlord gave notice for 9% above the guideline, then the landlord must reduce the tenant’s current rent by the full 9%, at the expiry of the useful life. If, however, the landlord only gave notice for 5% of the 9% awarded, then the landlord is only required to issue a reduction for 5% at the expiry of the useful life.

Landlords who purchased a property that was subject to an Order to increase rents above the guideline for capital expenditures under the TPA or the RTA are still obligated to reduce rents on the expiry date of that Order. It would be prudent to require that a copy of the original application, schedule of parties, and rent roll be provided upon closing to ensure you have all necessary information to make rent reductions.

The issuance of this type of rent reduction is a relatively new requirement. The procedures and methodologies discussed in this article are subject to Board interpretation. We are not aware of any decisions rendered by the Board that address this issue; therefore, we will have to be mindful of the possibility that the Board may adopt alternative approaches.

BETTER TOGETHER - FRPO MEMBERS CONTRIBUTE TO EARTHQUAKE RELIEF FUND

The devastating earthquake that struck the border between Türkiye and Syria has resulted in an urgent need for international aid. The scale of the destruction has left tens of thousands of people homeless, without access to necessities and struggling to survive. The situation from early February continues to require immediate intervention to ensure that the affected individuals receive the necessary support and care to recover from the disaster.

International aid is essential in situations like these, where the local infrastructure and resources are unable to meet the needs of the affected individuals. PAC Building Group has contributed with Zgemi on their Earthquake Relief Fund for food and resources. The companies’ $5,000 contribution will go a long way in providing food, water, shelter, and medical care to those affected by the earthquakes. It serves as a reminder of the power of community coming together to create real change. In times of crisis, it is crucial to work collaboratively toward a common goal, and community support can make all the difference in the recovery process. The collective effort and contribution from various individuals, organizations, and communities can help rebuild the affected areas and bring hope to those who have lost everything. We’re stronger together!

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REVOLUTIONIZING RESTORATION

By Stephanie Carmichael, Regional Sales Manager-Commercial, Paul Davis

How Applied Structural Drying Is Transforming the Industry

As the spring season approaches, Canadians brace themselves for potential flooding hazards caused by snowmelt and heavy rainfalls. The rise in temperature signals an alarm for the nation, reminding everyone of the potential danger that comes with the changing seasons. Spring storms can cause significant damage to buildings, occupants, and equipment, resulting in costly repairs and prolonged downtime. If this happens to you, it’s important to consider your approach no matter your location or climate because water damage can occur anywhere.

Extensive water damage doesn’t go away with time. It doesn’t dry out and go back to normal. When water damage occurs, it can quickly lead to serious structural damage, chemical and biological contamination, mould, health issues, and significant mitigation costs. In this article, we will introduce the technique of Applied Structural Drying (ASD), also known as drying in place, and explore how this advanced method can help minimize downtime and reduce costs associated with water damage.

Water damage restoration has transformed into a sophisticated area over time. In the past, restoration professionals relied on traditional methods such as air drying and the use of fans and heaters to dry out waterdamaged buildings. Traditional methods typically require the removal of materials such as carpeting, drywall, and flooring, which could take weeks or even months to complete.

Applied structural drying, on the other hand, can significantly reduce restoration times by eliminating or reducing the need for extensive demolition work. Instead, specialized equipment, such as high-powered air movers, dehumidifiers, and moisture meters, are used to dry out

the affected areas of the building. This advancement is largely dependent on the principles of psychrometry, or the science of drying. By understanding the correlation between the air temperature and water vapour levels in a given environment, psychrometry enables professional restorers to make adjustments within the drying chamber. The application of psychrometry, along with specialized monitoring equipment, enhances the ability to identify accurate remediation objectives and track progress during water damage restoration initiatives. One of the main benefits of this approach is that it can reduce restoration times, often by 50% or more, resulting in both saved time and money.

Another advantage is increased precision. Applied structural drying has enabled restoration professionals to assess the extent of water damage more accurately. By leveraging the ability to detect moisture in hard-toreach areas, such as behind walls or under flooring, your restoration provider can effectively identify areas of a building that have been impacted by water damage, even if there are no visible signs. This precision allows restoration professionals to create more targeted restoration plans, focusing only on the areas of the property that require restoration work.

Applied structural drying can also prevent secondary damage, such as mould growth, which can be costly and time-consuming to remediate. It is a well-known fact that water damage can create an environment that is ripe for microbial activity, which can negatively impact air quality and deteriorate materials. ASD aims to prevent the growth of mould and other microorganisms that thrive in moist environments. By removing excess moisture, inhibiting the growth of microorganisms, removing odours, preventing the spread of airborne particles, and improving ventilation, ASD can significantly increase the air quality in a building. When done correctly, this technique ensures a safer and healthier environment for occupants and property owners.

Over time, the field of water damage restoration has developed into a complex and advanced technical area. Applied structural drying has become an essential tool for any restoration project, helping to restore properties to pre-loss conditions quickly and effectively. It is more important than ever to source mitigation experts that have experience, training, specialized products, and the means to apply intense effort immediately. Experts like Paul Davis, with locations throughout Canada and the United States, assist by offering:

• 24/7 emergency response

• Structural stabilization

• Water extraction and structural drying

• Mould remediation

• Document drying and restoration

• Contents cleaning

• Complete buildouts and remodelling

With call centres open 24/7 for your emergency needs and a promise to be onsite within hours, Paul Davis supplies everything that’s needed for large loss mitigation. When the worst happens, this is no time for second best®

About Paul Davis Restoration:

For more than 55 years, Paul Davis Restoration, Inc. has restored residential and commercial properties damaged by fire, water, mould, storms, and disasters. Paul Davis is a one-stop shop for disaster damage and restoration and is quickly approaching 350 franchises in the United States and Canada. The professionals at Paul Davis are certified in emergency restoration, reconstruction, and remodelling. For more information, visit the company website at www.pauldavis.com.

2023 PAINT & COLOUR DESIGN TRENDS

Design trends have always been a reflection of cultural movement. So much of what comes next is a direct mirroring of what transpired in recent years and even the past decade. The driver of our 2023 Dulux trend colours forecast is the idea of reflection: reflecting on what matters to us most, our relationship to the planet, and even the way we engage with others – Serenity, Origin, Duality.

2023 Colour of the Year

Dulux is proud to announce our 2023 Colour of the Year: Vining Ivy (DLX118-46). A beautifully robust and refined bluegreen teal, the dark and muted tonality of the Dulux 2023 Paint Colour of the Year is symbolic of the deepest depth of a body of water. An enchanting aqua representing contemporary and traditional styles, it perfectly marries a touch of the past and a taste of the future. An elegant colour, use Vining Ivy in rooms where you wish to relax and unwind, such as a living room or bedroom. Add an infusion of comfort with warm metal, along with deeper toned wood and off-white elements.

2023 trending theme: Serenity – gentle / soothing / renewing

This graceful palette consists of milky pastels, watery tones, and warm neutrals. Serenity is about prioritizing the important things in life and taking precedent to find internal peace. It is a design theme that reflects on our relationship with ourselves and our need for sanctuary and calm. Combining the styles of quiet design and warm minimalism, the Serenity decor aesthetic focuses on creating a mental reset. Use these serene colours in the spaces where you retreat for sanctuary and calm.

2023 trending theme: Origin – grounding / connected / authentic

This design theme expands on our evolving relationships with the environment. Origin is a grounding and magical palette that captivates the beauty of the natural world. It is a decor theme that creates a sense of safety and a desire to push into unfamiliar territories. With nature determining architectural lines and boundaries, the Origin palette of dark, earthy tones adds embellishment through colour, creating a mood of abundance in any room. Stone and marble, in natural hues, and mid-tone woods bring warmth to clean contemporary spaces.

2023 trending theme: Duality – bold / adaptive / blended

This design theme celebrates our relationships with each other and how we show ourselves to the world. Duality decor sees retro-futuristic shapes blended with colour-blocking, creating a playful design spirit that applies well to offices, stores, and the home. Blurring the lines between traditional and contemporary, Duality is old-school glamour for the modern age. Add colourful accessories in matte, lacquered, and metallic finishes for a sense of playfulness and to amplify the drama.

We are pleased to announce a renewed partnership with Dulux Paints to provide our members with a paint program exclusive to FRPO. Dulux Paints has been a longtime partner and we look forward to working with them. Among other value-added services, Dulux will be offering all FRPO members:

• Preferential Pricing

• Account creation services

• Store & Sales Rep account support

• Colour & Design trend information

• Painting tips & tricks

On behalf of Dulux Paints, we are thrilled to be partnering with FRPO & its members. If you have any questions or inquiries, please contact me directly. My information can be found below:

Donny Goettler

Corporate Accounts Manager

Dulux Paints/PPG

Telephone: 905.572.0582

goettler@ppg.com