RHB Magazine Sept/Oct 2018 by Marc Cote

Vol. 11 No. 4 Sept-Oct 2018

Canadaâ&#x20AC;&#x2122;s #1 most widely read publication for Apartment Owners, Managers and Association Executives

The official publication of:

The six-alarm blaze at 650 Parliament Avenue should be a wake-up call for all building owners. Are you prepared for a building fire?

CFAA is now engaged in a direct membership drive to increase its reach, engagement and political strength.

There are several underlying demographics that could have an effect on the rate of homeownership in Canada. â&#x20AC;&#x201C; Aled ab Iorwerth p. 25

Canadians are starting to tip the scales toward renting.

CBRE takes a closer look at the Edmonton market.

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Editor’s notes What are you thankful for? The hottest summer I can recall is over, although it’s been up and down by at least 10 degrees over the last week. What would feel comfortable on a normal September day now feels really cold. But I’m thankful that I can enjoy this great weather, and that my daughter has started grade 3, and that life in general is good. Thanksgiving is just around the corner (as of this writing), as well as my birthday, so I have plenty to be thankful for. What about you? This issue of RHB Magazine features an examination of rental rates across Canada. According to Statistics Canada, rental rates have increased nationally for the first time in 45 years. The article contains breakdowns by province, as well as a list of cities with the highest and lowest rental rates. It also takes a look at cities that had declining rental rates over the last five years. We have an article that describes how to protect you, your building and your tenants against fires in your rental property (using the extreme case of 650 Parliament Avenue in Toronto), as well as what you should do to protect yourself after a fire. This issue also discusses CFAA’s move to direct membership, and its impact on members and the industry. Remember to read through CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. Make sure to check out CBRE’s overview of the Edmonton market at the end of the magazine. As usual, we enjoy hearing from our readers and support two-way communication. If you have any comments or questions, send them to david@rentalhousingbusiness.ca. I look forward to hearing from you. Enjoy the issue! David Gargaro

Enjoy the issue! David Gargaro Senior Editor

4 | Sept-Oct 2018

Co-founder, Publisher

Marc Côté marc@rentalhousingbusiness.ca

Co-founder, Director

Juan Malvestitti juan@rentalhousingbuisness.ca

Editorial

David Gargaro david@rentalhousingbusiness.ca

Contributing Editor

John Dickie, President CFAA jdickie@rentalhousingbusiness.ca

Design

Wendy Tabor

Director of National Sales Nishant Rai

Regional Sales Executive (RAV) Ranjna Bhardwaj

Office Manager Geeta Lokhram

Subscriptions

One year $49.99 Cdn Two years $79.99 Cdn Single copy sales $9.99 Cdn Opinions 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 696, Maple, ON L6A 1S7 416-236-7473 Produced in Canada All contents copyright © RHB Inc. Canadian Publications Mail Product Sales Agreement No. 42652516

CFAA Rental Housing Conference 2019

May 13-15 The Canadian Federation of Apartment Associations (CFAA) invites you to join us next at Canadaâ&#x20AC;&#x2122;s Rental Housing Conference in Toronto in Spring 2019 www.CFAA-RHC.ca Thanks to Principal Sponsor:

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VOL.11 NO.4 2018

contents CFAA makes the move to add direct memberships

CFAA is now engaged in a direct membership drive to increase the work it can do for the rental housing industry.

Rental rates are on the rise for the first time in over 40 years The national home ownership rate declined for the first time in 45 years – which means that the number and percentage of rentals increased.

RHB’s forum for rental housing associations to share news, events and industry information

Hot Topics: WRAMA highlights their annual panel discussion, which gathered experts from various fields to discuss the rental housing market in Waterloo Region, and featured closing remarks by Kitchener Mayor Berry Vrabnovic. – p. 45 EOLO reports on the improvements to the City of Ottawa’s Rent Supplement program, and the recent discussion on Ottawa’s hot rental market that took place at their Fall Education Event on September 20. – p. 49 HDAA explores the unique supplier/customer relationship between housing providers and tenants, and solutions to conflicts based on understanding, education and fairness. – p. 53 LPMA explains what landlords can do to restrict marijuana use in their building, and the benefits of housing mediation between students and their landlords. – p. 57

The Member Associations

Regional Association Voice Regional Association Voice features the latest industry news from four member associations.

Fires happen – are you prepared? Fires in apartment buildings are more common than you think. They often occur in rental units, due to a hoarding situation or an accident.

6 | Sept-Oct 2018

Suite Count A strengthening of Edmonton’s multifamily market has been evident.

rentalhousingbusiness.ca | 7

president’s corner For Canada’s rental housing providers, the big news this month is that CFAA has launched a direct membership program. Until recently, CFAA has relied on its 11 member associations for the bulk of its funding. Now, after careful consideration, the CFAA Board has decided to expand CFAA’s lobbying and member services, and to interact directly with Canada’s major rental providers. Now is a great time to do that. Under the National Housing Strategy (NHS), there is $22 billion in total spending open to forprofit rental providers in Canada. That is an average of close to $6,000 per rental unit. By meeting certain standards for energy efficiency, accessibility and affordability (for some units), landlords can access grants and loans to perform major repairs and retrofits, and to build new rental housing. CFAA wants to make that money work well for rental providers. So do rental housing providers.

access to additional, new areas of the CFAA website, to new education and training opportunities, and to discounts on registrations for the CFAA Conference and other international apartment events. To join CFAA, or to receive updates on federal opportunities for rental providers from CFAA, see page 35, and email admin@cfaa-fcapi.org. CFAA Rental Housing Conference 2019 will be held at the Hyatt Regency Hotel in downtown Toronto from Monday, May 13, to Wednesday, May 15. As usual, the Building Tour will take place on the first day (Monday), followed by two days of extensive education sessions. Please save the dates, and e-mail events@cfaa-fcapi.org for updates.

The NHS also promises a Canada Housing Benefit for some low-income tenants. The program design and target populations may be with us for decades. Now is the time to make sure that new program works for private sector rental providers, as well as low-income tenants. A key benefit of the direct membership model for CFAA is that the additional funding will enable CFAA to engage a well-connected, national government relations firm to assist on key federal issues. To date, most of CFAA’s government relations work has been conducted in-house. That in-house work will continue, but the funding will help to hone the rental housing industry’s positions and win support from key federal contacts to get the decisions this industry needs. More effective government relations will mean better federal funding programs for retrofits, for new rental construction where it is required, and for housing benefits for low-income private market tenants to help them pay their rent in full and on time. Other benefits for members will include

8 | Sept-Oct 2018

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In this issue of... National Outlook 35. New CFAA Direct Membership Drive Until now, CFAA has functioned as a federation of landlord associations. Now, CFAA is urging all of Canada’s rental housing providers to join directly. Find out more about CFAA’s direct membership program.

40. Incentives for New Rental Construction CFAA supports incentives for new rental construction in some areas, and opposes incentives in other areas. Find out why and send your feedback on that dual position.

41. CFAA Rental Housing Conference 2019 CFAA Rental Housing Conference 2019 will take place from Monday, May 13, to Wednesday, May 15, in downtown Toronto.

To subscribe to CFAA’s e-Newsletter, please send your email address to communication@cfaa-fcapi.org.

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.

10 | Sept- Oct 2018

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 Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572 LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604-733-9440 Victoria Office P: 250-382-6324 London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999 Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560 Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 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

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Rental rates are on the rise for Owning a home has always been popular in Canada. According to Statistics Canada, more than 2/3 of the population now owns their home. Home ownership rates have been increasing since 1971. However, according to the 2016 Statistics Canada survey, this trend has now reversed. The national home ownership rate declined for the first time in 45 years – which means that the number and percentage of rentals increased during this time. What’s perhaps more interesting is that, from 2011 to 2016, the percentage of renters increased in 88 of Canada’s 100 most populous cities.

Time to RENT!

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The big picture

14 | Sept-Oct 2018

Figure 1: The progression of rental rates in Canada, 1971 – 2016

2021

2016

2011

2006

2001

1996

1991

1986

1981

1976

So, if you flip these numbers around (as shown in Figure 1), you can see that the percentage of people who rent their home started at a high of 39.7 per cent in 1971, and has declined until 2011, when it was 31 per cent – an overall decline of 8.7 per cent over 40 years. The graph also shows a sharp decline in rentals from 1995 to 2005 (nearly 5 per cent in 10 years). According to the 2016 Statistics Canada survey, the national average of rentals increased to 32.2 per

“I believe that we have reached a peak in the home ownership rate,” said Benjamin Tal, Deputy Chief Economist, CIBC World Markets Inc. “I think that the affordability issue is the primary reason and I do not see it improving in any significant way. I think that, for that reason, renting will become a more acceptable option for young families and older Canadians. What’s left to do is, from a policy perspective, to pave the way to allow for this transition.”

1971

“The rate of homeownership has declined marginally over the last decade but Canada continues to have one of the highest rates of homeownership in the world,” said Ale ab Iorwerth, Deputy Chief Economist, Canada Mortgage and Housing Corporation (CMHC). “For years, record low interest rates helped aspiring homebuyers but also contributed to rising house prices and record levels of household debt.”

cent – an increase of 1.2 per cent. As of the last Census, there are 4.6 million Canadians renting.

1966

Home ownership and renting are two sides of the same coin. As the home ownership rate increases, the percentage of people renting their homes decreases, and vice versa. According to Statistics Canada, home ownership has been on the rise since 1971, when it was 60.3 per cent, and has risen steadily for 40 years, reaching a high of 69 per cent in 2011. In 2016, this number dipped to 67.8 per cent, marking a decrease of 1.2 per cent.

the first time in over 40 years Time to BUY!

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pushed people who would normally buy a home into the rental market, leading to the increase in the national rental percentage. “One factor is the sharp rise in home ownership costs, especially in Toronto and Vancouver,” said John Dickie, President, Canadian Federation of Apartment Associations. “Another is the availability of new rental units in many centres. A third is the growth in immigration and, in particular, the growth in the intake of refugees, who almost always rent their homes initially and for many years.”

Provincial and territorial breakdown

What caused home ownership rates to drop over that five-year period… or, conversely, what led to the increase in the percentage of people deciding to rent? There are rarely singular causes to these types of demographic changes. However, according to a 2015 Maclean’s article (see www.macleans.ca/ economy/economicanalysis/how-canadaseconomy-went-from-boom-to-recessionso-fast/), China’s economic meltdown – specifically, the bursting of its speculative bubble – had a significant impact on the global economy. This had a very specific affect on Canada’s economy, which relies upon exported resources. As oil prices fell, and exports to Asian nations declined, Canada went into recession. This pushed wages down, which had a negative effect on Canadians’ purchasing power. “There are several underlying demographics that could have an effect on the rate of homeownership in Canada,” said Iorwerth. “For example, an aging population moving towards rental properties, an increase in immigration, and higher house prices are some of the factors that could have an impact over the short and long term.” However, home prices continued to increase (particularly in larger cities), which made home ownership much less affordable for people looking to enter the market. This

Only Quebec and the Northwest Territories experienced a decline in the percentage of people renting their homes from 2011 to 2016 (see Figure 2). However, both these regions have two of the lowest home ownership rates (or highest rental rates) in Canada. In 2016, Quebec’s rental rate was 38.7 per cent, while the Northwest Territories was 46.3 per cent. Nunavut has the highest rental rate in Canada, at 80 per cent. However, according to the Nunavut Housing Corporation, there is a severe housing shortage in the region, and it is very expensive to own a home, which both contribute to the high rental levels. Even with the increases in the rental rates in 2016, the provinces with the lowest proportions of renters in Canada are Newfoundland and Labrador (23.3 per cent), New Brunswick (25.6 per cent), and Alberta (27.6 per cent). Many factors contribute to these numbers, including the relative affordability of homes (which makes home ownership more attractive), fewer imbalances between housing supply and demand, and higher average incomes relative to home ownership costs. “A stable supply of rental housing is important to ensure that more Canadians have access to housing that meets their needs and that they can afford,” said Iorwerth. “In certain markets, owning a home is becoming

rentalhousingbusiness.ca | 15

Figure 2: Provincial and territorial rental rates, 2001 – 2016

British Columbia 2001: 33.7% | 2006: 30.3% | 2011: 30% | 2016: 32%

Alberta 2001: 29.6% | 2 006: 26.9% | 2011: 26.4% | 2016: 27.6%

Ontario 2001: 32.2% | 2006: 29% | 2011: 28.6% | 2016: 30.3%

Saskatchewan 2001: 29.2% | 2006: 28.2% | 2011: 27.4% | 2016: 28%

Manitoba 2001: 32.2% | 2006: 31.1% | 2011: 29.9% | 2016: 31.3%

Quebec 2001: 42.1% | 2006: 39.9% | 2011: 38.8% | 2016: 38.7%

New Brunswick 2001: 25.5% | 2 006: 24.5% | 2011: 24.3% | 2016: 25.6%

Nova Scotia 2001: 29.2% | 2006: 28% | 2011: 22.5% | 2016: 23.3%

Newfoundland & Labrador 2001: 21.8% | 2006: 21.3% | 2011: 22.5% | 2016: 23.3%

Prince Edward Island 2001: 26.9% | 2006: 25.9% | 2011: 26.6% | 2016: 29.7%

Yukon 2001: 37% | 2006: 36.2% | 2011: 33.5% | 2016: 36.4%

Northwest Territories 2001: 46.9% | 2006: 47.2% | 2011: 48.5% | 2016: 46.3%

Nunavut 2001: 75.8% | 2006: 77.3% | 2011: 79% | 2016: 80%

16 | Sept-Oct 2018

increasingly less affordable for first time buyers. Under the National Housing Strategy, 100,000 new housing units will be created and 300,000 existing housing units will be repaired or renewed, which respectively represents four and three times as many units built under federal programs between 2005 and 2015.”

Cities with the lowest rental rates Ontario leads the way with the most cities that have the lowest rental rates (see Figure 3). In fact, 15 of the 20 cities are located in Ontario. Caledon has the lowest rental rate in Canada as of 2016, at 9.2 per cent. The other cities on the list are located in Alberta, British Columbia and Quebec. Quebec is known for having low home ownership rates, so the appearance of Blainville on this list is a bit unusual, but it is a suburban municipality that has experienced rapid growth recently. “A factor working in the opposite direction is the growth in condominiums, often condo apartments, which allows people to become homeowners, while still living in an apartment building,” said Dickie. “Blainville’s recent population and housing growth was concentrated in condos. In BC, condos are known as strata title properties, or stratas.”

Cities with the highest rental rates As expected, Montreal and other cities in Quebec rank as the cities in Canada with the highest rental rates in Canada (see Figure 4). Nine of the 20 cities on the list are located in Quebec, with Montreal sitting at 63 per cent. The rest are in British Columbia, Ontario, New Brunswick and Nova Scotia. According to the Quebec Federation of Real Estate Boards (QFREB), Quebec residents have always had less interest in home ownership than other cultures – home ownership is not indicative of status, from a cultural and historical background. “Young people see the North American homeownership culture on TV or in movies,” said Dickie. “Average incomes are rising. Young parents want to provide

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Figure 3: Top 20 cities with the lowest rental rate, 2016

Figure 4: Top 20 cities with the highest rental rate, 2016

Caledon, ON

Montreal, QC

Vaughan, ON

Victoria, BC

Clarington, ON

Vancouver, BC

Pickering, ON

Saint-Hyacinthe, QC

Ajax, ON

Sherbrooke, QC

Markham, ON

Toronto, ON

Milton, ON

Quebec City, QC

Halton Hills, ON

Granby, QC

St. Albert, AB

Longueuil, QC

Aurora, ON

Saint-Jerome, QC

Whitby, ON

Cornwall, ON

Kawartha Lakes, ON

Drummondville, QC

Airdrie, AB

Saint John, NB

Langley Township, BC

Trois-Rivières, QC

Richmond Hill, ON

New Westminster, BC

Oakville, ON

Fredericton, NB

Blainville, QC

Moncton, NB

Brampton, ON

Kingston, ON

Maple Ridge, BC

London, ON

Newmarket, ON

Halifax, NS 0

ground-oriented housing, so that their children can play in their yards, or in their own swimming pools. On the flip side, decades of rent control and poor tax treatment have meant that there was little development of new rental buildings with the amenities that well-off young people want.” Two of the largest cities in Canada – Toronto and Vancouver – also appear on this list. Economic factors figure into these results, as it is very expensive to own a home in these two cities, which means that people are more likely to turn to renting. Toronto and Vancouver are also important financial centres, and have a large proportion of business and job opportunities. People looking for work in these cities will tend to turn to renting for the flexibility and financial aspects. “Canada’s highest-priced economic regions of Toronto and Vancouver represent particular housing challenges for young families,

18 | Sept-Oct 2018

those migrating from lower-cost cities, low- to modest-income families and singlemember households,” said Iorwerth. “We are committed to working with our partners to facilitate access to housing and promote financial stability in those markets.” Prices for single-family homes in these two cities have also risen sharply. According to the CMHC study Examining Escalating House Prices in Large Canadian Metropolitan Centres, there are very low elasticities of supply for housing in Toronto and Vancouver, which is the main ongoing reason for the skyrocketing house prices. “In Edmonton, a 10 per cent rise in house prices produces a 20 per cent increase in supply – that is a supply elasticity of 2.0,” said Dickie. “However, in Toronto, the supply elasticity is 0.4, so that a 10 per cent rise in house prices produces a 4 per cent increase in supply. In Vancouver, the supply elasticity is 0.3, so a 10 per cent rise in house prices produces only a 3 per cent increase in supply.” CONTINUED ON PAGE 22

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Four cities went the other way A number of cities had decreases in the proportion of renters in the period from 2001 to 2016 (see Figure 5). Four cities that used to have more renters than homeowners in 2001 (Quebec, QC, Sherbrooke, QC, SaintJerome, QC, and New Westminster, BC) have flipped the script in 2016 – they are now below 50 per cent in the proportion of renters. Two of those cities had decreases in rental rates greater than 10 per cent.

municipalities in question are fast growing suburbs, and much of the growth in the number of homes is in condo title (strata title in BC).” Milton had a very large decrease in its share of renters over this 15-year period, although it has one of the lowest rental rates in Canada. As shown in an earlier table, its rental rates have been on the rise since 2011. New Westminster, Burnaby, Saint-Jean-sur-Richelieu and Saskatoon have seen significant declines in their share of renters over this period as well.

“My understanding is that the sharp increases in the home ownership rates in those cities is due largely to the development of new condos,” said Dickie. “Except for Montreal itself, the

Figure 5: Cities with decreases in renters, 2001 – 2016

Rental rate, 2001

Rental rate, 2016

Decrease in share of renters

60 50 40 30 20

20 | Sept-Oct 2018

Victoria, BC

Laval, QC

Longueuil, QC

Vancouver, BC

Sherbrooke, QC

Montreal, QC

Quebec City, QC

Levis, QC

Gatineau, ON

Richmond, BC

Red Deer, AB

Vernon, BC

Saint-Jerome, QC

Edmonton, AB

Ottawa, ON

Saskatoon, SK

Saint-Jean-surRichelieu, QC

Burnaby, BC

New Westminster, BC

Milton, ON

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Figure 6: Cities with largest 5-year increases in rentals, 2011-2016

Rental rate, 2001

Rental rate, 2016

Increase in share of renters

50 40 30 20 10

According to the Canadian Rental Housing Index, demand for rental housing has increased to the point that it is outpacing demand for home ownership for the first time since the early 1970s. This could be an increasing trend due to the current economic situation, although time will tell if this will continue. Even with these increasing rental numbers, only four Canadian cities have more renters than homeowners.

Cities with the largest 5-year increases in rental rates Even with 88 out of 100 cities showing increases in their rental rates since 2011, no city crossed the threshold from ownermajority to rental-majority (see Figure 6). While Montreal, Vancouver, and Victoria are renter-dominated, they do not show up on this list because their rental percentages did not grow very quickly. The cities with the largest increases in rental percentages over this five-year period include Milton, Ontario (40.0 per cent), Airdrie, Alberta (30.8 per cent), and Waterloo, Ontario (28.6 per cent). However, all three cities have very low rental rates (below 20 per cent). It is interesting to note that Milton and Airdrie experienced large growths in

22 | Sept-Oct 2018

Cornwall, ON

Vernon, BC

Fredericton, NB

Halifax, NS

Peterborough, ON

London, ON

Kitchener, ON

Lethbridge, AB

Saanich, BC

Medicine Hat, AB

Richmond, BC

Brossard, QC

Kelowna, BC

Nanaimo, BC

Abbotsford, BC

Barrie, ON

Waterloo, ON

Richmond Hill, ON

Airdrie, AB

Milton, ON

population during this time (32 per cent and 46 per cent, respectively). In Airdrieâ&#x20AC;&#x2122;s case, there is a mitigating factor â&#x20AC;&#x201C; the financial insecurity resulting from the large changes in oil prices. Alberta was greatly affected by the decreases in oil prices, so many people in the industry are choosing to rent during times of financial uncertainty.

Conclusion At the national level, rental rates are on the rise for the first time in more than four decades. From 2011 to 2016, the percentage of renters increased in 11 out of 13 provinces and territories,and 88 out of 100 of Canadaâ&#x20AC;&#x2122;s most populous cities. However, most cities are still dominated by home ownership, and some cities had decreases in renters, including many in Quebec. Whether this is a growing trend or a temporary economic or demographic blip remains to be seen, but it does leave cause to ask some interesting questions about the future of rental housing in Canada.

By David Gargaro, in collaboration with Benjamin Tal, Aled ab Iorwerth and John Dickie Graphs and figures sourced from Statistics Canada

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Fires happen – are you prepared? Fires in apartment buildings are more common than you think, as they don’t always make the news. They often occur in rental units, due to a hoarding situation or an accident involving a cooking fire. Damage is often limited to the affected area and adjacent units. Then there is the extreme case of 650 Parliament Avenue, located in the St. James Town neighbourhood of Toronto. On August 21, a six-alarm blaze (which started in the basement) forced the evacuation of 1,500 residents. The fire caused significant damage to the building’s electrical system, which will have to be repaired before tenants can return to the building. Tenants must live in other accommodations until the building is again fit for occupancy. It’s a very unfortunate scenario for the tenants, who have to find a new place

24 | Sept-Oct 2018

to live, deal with getting to work or bringing their children to school, and replacing the belongings that were damaged. It is also a terrible situation for the building owner, as they are certain to face extensive repair costs, as well as potential claims from the displaced tenants. Although it’s a rare occurrence, building owners and managers should prepare for this type of disaster. To follow is advice from various experts on how to prepare rental properties before a major fire – and how to deal with a fire after it has occurred.

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Two high-risk behaviours that are becoming increasingly more prevalent are hoarding and marijuana grow-ops.

Electrical engineering For most rental properties, the building owner should conduct regular inspections and maintenance of electrical components. Electrical systems that are either new or in very good condition should undergo maintenance at least once every five years. Older systems, and systems with issues, should go through an annual maintenance process. Building owners should hire qualified professionals to do a visual inspection and operational test on all components, and to perform interior cleaning of the electrical distribution equipment. Removing dust and debris from electrical equipment will reduce interior resistance of air gaps and help to reduce fire hazards. The inspection should also check the tightness and security of all electrical connections, and perform infrared scans of electrical connections and electrical feeders to ensure that overheating is not occurring. “The electrical engineer should also provide an arc-flash study, which indicates safe clearances for maintenance of the electrical equipment,” said Ed Porasz, P.Eng., President, M & E Engineering Ltd. “With older buildings, they should also conduct a Megger test of the cables’ insulation for major electrical feeders. Improper electrical insulation can cause electrical short conditions and can be a fire hazard.” If severe fire damage occurs at a property, it’s a priority to repair and replace all

26 | Sept-Oct 2018

damaged electrical systems as soon as possible. This will expedite the return of tenants to the building. When the damage is less severe, the building owner should have electrical engineers provide temporary electrical panels with temporary electrical feeders to restore the functionality of essential building electrical loads, which includes life-safety loads. “The electrical engineer will then replace damaged electrical equipment and feeders,” said Porasz. “They can then connect building loads that were not damaged in the fire to restored permanent electrical equipment, remove any temporary electrical equipment and feeders, and clean the site.”

Tenant and unit inspection Many building fires occur inside rental units. Some occur due to an accident that is difficult to prepare for or prevent, such as a stove fire or a knocked over candle. You can mitigate the damage from these types of situations by regularly testing and maintaining smoke alarms. If your building has a laundry room, make sure your staff clean out the lint catchers in the dryers daily, since tenants often overlook that when using the dryers and lint can fuel fires. Regular inspections of rental units can mitigate many potential fire hazards. Two high-risk behaviours that are becoming

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All building owners should have insurance coverage for the full replacement value of their building (to cover major repairs) and liability (if the landlord becomes liable to the tenants).

increasingly more prevalent are hoarding and marijuana grow-ops. Some of the most common threats posed by a hoarded unit include overloaded electrical outlets or extension cords, and articles placed up against radiators, baseboard heaters or space heaters. The excessive stuff collected acts as an accelerant, and creates a hot spot in a working fire. Due to overcrowding of the unit, hoarders will use stovetops as a place to store things and an accidental turn of the knob can start a fire. With recreational marijuana becoming legal this October, marijuana grow-ops in rental properties will likely become a more common concern. Landlords can take preventive measures by updating the lease to make it illegal to smoke or grow marijuana in their properties. However, that might not prevent tenants from growing marijuana in their units. That’s why property managers are advised to conduct regular inspections of rental units. “Quarterly inspections will interrupt the growth cycle of a marijuana crop, which is an extreme fire hazard,” said Jim Garnett, President, Canadian Tenant Inspection Services Ltd. “Sophisticated grow operators will tamper with the electrical and plumbing, which increase odds of an electrical fire.”

28 | Sept-Oct 2018

Litigation and insurance The best thing a building owner or manager can do to avoid liability and litigation is to ensure that they’re never in that position in the first place. Inspect regularly for potential problems, such as faulty wiring or furnace issues. Address these issues as soon as you become aware of them to prevent fires and prevent the attribution of a fire to landlord negligence. Establish a program of regular inspections and maintenance for all building components that could require maintenance. That will help to protect the building owner from liability if something does go wrong due to a previously unrecognized defect. “As soon as a landlord become aware of tenant behaviour that could lead to a catastrophic event like a major fire, it's incumbent on the landlord to take whatever steps, such as arranging with the fire department for a fire safety inspection of the unit, and follow-up proceedings at the Landlord and Tenant Board if necessary, that are available to them,” said Robert Rose, Partner, Mathers-Prior Professional Corporation. “The 2010 fire at 200 Wellesley Street East was attributable to a tenant who was a major hoarder of combustible materials.” All building owners should have insurance coverage for the full replacement value of their building (to cover major repairs)

and liability (if the landlord becomes liable to the tenants). Landlords should also make sure that they insure to the full replacement cost of the building and its systems, or they might be forced to accept partial payments of claims due to the principle of co-insurance.

know it started with the building electrical system, but I believe they're still in the process of determining why it started.”

Conclusion

Work with an insurance professional to ensure that you have proper coverage for your needs. If a fire or other serious event that causes serious damage to the building and renders it uninhabitable for a long time is not the landlord’s fault, the doctrine of frustration of contract might apply to end the tenancies and terminate any further obligations of the landlord and tenants to each other. “Of course, whether the doctrine of frustration applies will turn on the facts of each case,” said Rose. “With the St. James Town fire, they

You cannot protect against every potential cause of fires in your rental properties. And there will be extreme cases, much like the St. James Town fire, that will cause hardship for the landlord and tenants. But you can make your building safer for your tenants. Insure your building against fire damage, and do your due diligence to keep your building in good condition before a fire occurs. This will help to protect you and your tenants against a fire and against the consequences after the fact.

By David Gargaro, in collaboration with Jim Garnett, Ed Porasz, and Robert Rose

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CFAA makes the move to add direct memberships Until recently, the Canadian Federation of Apartment Associations (CFAA) has relied on its 11 member associations for the bulk of its funding. As the national representative for Canada’s rental housing providers, CFAA maintains constant communication with the federal government and the Canada Mortgage and Housing Corporation (CMHC) about landlords’ needs and interests, as well as the value that rental housing provides to the economy. CFAA is now engaged in a direct membership drive to increase the work it can do for the rental housing industry. The goal is to gain greater engagement from rental housing providers by communicating with them directly, rather than through provincial or regional associations. CFAA wants to hear from executives of major and mid-size companies and REITs, to get them directly involved in CFAA’s government relations decisions. CFAA will continue to receive the input of small landlords through the directors nominated by several member associations. “CFAA will consult with our direct members to make sure we are seeking the program improvements that will serve them best,” said John Dickie, President, CFAA. “With more direct members, we expect to be able to represent the rental housing industry more effectively.”

Goals of direct membership CFAA believes that direct memberships, as well as the information and resources they

32 | Sept-Oct 2018

will generate, will open additional significant opportunities at the federal level. Under the National Housing Strategy, there is $22 billion, or about $6,000 per rental unit, in total spending open to for-profit rental providers in Canada. By meeting certain standards, landlords can receive grants and loans to perform major repairs and retrofits, and to build new rental housing. CFAA’s goal is to remove the red tape for landlords, and focus construction incentives on the areas where there is the greatest need for new rental construction. “CFAA has also got the federal government to see that it should make more use of direct financial assistance to tenants, which has been an industry goal for 30 years,” said Dickie. “The Canada Housing Benefit is still to be designed with the provinces. Some people are pushing for that to be used mostly for particular social housing tenants, but CFAA, and groups we are working with, think the Housing Benefit should go mainly to tenants in the private market, who are struggling to pay their rents because of their low incomes.”

Benefits to association and members A key benefit of the direct membership model is that the additional funding will enable CFAA to engage a well-connected, national government relations firm to provide greater monitoring of federal initiatives, and assist on key federal issues. To date, most of CFAA’s work has been conducted in-house. The in-house work will continue, but the funding will

help to hone the rental housing industry’s positions, messaging and contacts at the federal level. More effective government relations will mean better federal funding programs for retrofits, new rental construction where it is required, and housing benefits for lowincome private market tenants to help them pay their rent in full and on time. Other benefits for members include access to member areas of the soon-to-be redesigned CFAA website, new education and training opportunities, and discounts on registrations to the CFAA Conference and other international apartment events. “The operations and returns of every landlord are substantially affected by the governments and laws of the municipality, the province and the federal government,” said Margaret Herd, Senior Vice President, Residential Property Management, Park Property Management Inc., and Chair, Federation of Rental-housing Providers of Ontario (FRPO). “Every rental provider in Canada

has a stake in what CFAA can achieve in lobbying the federal government. That is why Park Property Management supports CFAA through direct membership even though we only operate in Ontario. The value proposition is abundantly clear and overwhelming.”

Conclusion While CFAA represents Canada’s rental housing providers at the national level, it has moved to a direct membership drive to increase the work CFAA can do for the industry. This strategy will enable it to engage more directly with members, including key executives who can help direct and add their voices to the lobbying efforts. Direct memberships will provide CFAA with additional funding to give rental housing providers a stronger presence at the federal level, and better member services.

By David Gargaro, in collaboration with John Dickie and Margaret Herd

rentalhousingbusiness.ca | 33

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New CFAA Direct Membership Drive By John Dickie, CFAA President CFAA has launched a major drive to expand our direct membership program, so that we can achieve more for Canada’s residential landlords. For the last few years, CFAA has raised its funding primarily through membership dues from landlord associations. CFAA is now reaching out to rental housing providers directly to ask you to become direct members. The annual membership fee is $100 plus 50 cents per rental unit. We urge all of Canada’s rental housing providers to join now, or to budget now to join in 2019. Direct memberships will gain access to improved member services and enable CFAA to add substantially to our government relations work, to gain more for for-profit rental housing providers from the National Housing Strategy. Resources permitting, we also expect to address emerging issues such as the “human rights approach to housing”, and our long-term plan to reduce taxes on rental housing. As an added incentive for landlords to become direct members, CFAA is enhancing our membership services. Watch this space for more details.

MESSAGE FROM THE CFAA CHAIR Geoff Younghusband, Vice-President – Residential, Osgoode Properties: CFAA has achieved great results for rental providers in the National Housing Strategy. However, there is much work still to do to achieve the best possible program designs and roll outs. That is why I urge all rental providers to join CFAA directly, to provide the funding needed for that work through membership fees. Since many provincial rental housing programs are driven by federal

housing policies and programs, your profitability depends on federal policies and programs on housing. CFAA is the voice of this industry to the federal government. Here are comments from two of my colleagues: Daryl Chong, President and CEO, GTAA: I have sat on the CFAA Board since taking on the leadership of the GTAA six years ago after my long career as a lobbyist at the City of Toronto. CFAA has done extremely well in lobbying the federal government with the resources it has deployed. With the support of FRPO and GTAA, and the representatives of CFAA’s member associations across Canada, CFAA has now decided to seek a stronger connection with Canada’s major landlords. As an industry, we need our leading members to belong to CFAA directly and enhance two-way communication and coordinated lobbying. George Van Noten, Senior Vice President, Property Operations, Minto Properties: Through the application of more resources and direct two-way communication, CFAA will be able to achieve more for us, and we will benefit more from CFAA’s work. Now is the time to make this move! How to join CFAA To join CFAA, e-mail admin@cfaafcapi.org, and we will send you the application form. New membership services From January 2019, CFAA expects to offer: •

A revamped website with members-only areas • Improved branding

rentalhousingbusiness.ca | 35

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NATIONAL OUTLOOK •

Expanded access to education and training An enhanced Suppliers Council program • A new international partnership • Discounted registration fees for CFAA members to attend conferences organized by CFAA and others •

To implement those and other membership services improvements, CFAA wants and needs input from landlords across Canada. To provide your input, or find out how to participate in CFAA’s membership services review, please email Jeremy Newman at jnewman@cfaa-fcapi.org.

EXPANDED POLITICAL ACTION Through its in-house government relations work over the last two years, CFAA played a major role in shaping the ten year National Housing Strategy (NHS). Within that strategy, CFAA achieved access for private rental providers to commitments for government spending of: • • • •

$4B on housing benefits for low-income tenants, $3.75B in low-cost direct lending for rental construction, $5.7B for retrofitting private market (for-profit) housing and community housing, and $7.4B for funds to be invested in new rental construction.

The total amount of NHS spending open to for-profit rental providers is to be $22B, or close to $6,000 per rental unit in Canada on average. CFAA is working hard to make sure you can get your share of that money, and that it is applied in a way which supports the rental housing industry across Canada. (See the article on page 40 for the geographic issues in new rental construction incentives.) In order to get the most benefit from the federal government’s funding commitments for rental housing, the CFAA Board of Directors plans to engage a national government relations firm

(with long-standing, deep connections to government and politicians) to provide additional monitoring of federal initiatives, and to assist CFAA on the key federal issues. Resources permitting, CFAA also plans to: •

•

Organize a series of academic seminars to obtain and disseminate academic research to support the needs of the private rental sector in the roll out of the NHS, in tax reform, and in other emerging issues (such as the human rights approach to housing), Lobby more on the details of the NHS program roll out to maximize the benefits to private market rental housing providers, Build deeper, long term relationships with the key officials on housing and tax policy, and emerging rental housing issues, and Enhance the coordination among the associations which represent the rental housing industry (including CHBA, REALpac, CFAA’s provincial and municipal members --- like your local or provincial association --- and others).

CFAA GOVERNMENT RELATIONS GOALS

For the last several months, both the federal government and CFAA have been active in the roll out of various housing programs. Here is a description of some key issues for rental housing providers. CFAA welcomes your input on these concerns and others you have. National Housing Co-Investment Fund Under the new ten year National Housing CoInvestment Fund, there is a New Construction Stream, providing $7.4B in grants and loans, and a Repair and Renewal Stream, making available $5.7B. Both are open to for-profit rental developers, as well as community housing providers.

Want to stay up to date with national outlook? Sign-up for CFAA’s National Outlook e-newsletter to receive up-to-date news on what is happening across Canada, as well as industry insights and insider information on CFAA happenings. Email communication@cfaa-fcapi.org to start receiving National Outlook today!

rentalhousingbusiness.ca | 37

September- OCTOBER 2018 Many details of those programs were addressed in the July/August 2018 issue of National Outlook in RHB Magazine. Both programs have limitations that reduce the effectiveness of the programs, and the value of the programs to for-profit rental providers. With CFAA’s new direct members, the CFAA Board or Government Relations and Communication Committee will determine what changes are needed to make the programs work better, and then I expect we will lobby for those changes. Since that program has been operating for a year, CMHC launched a mid-program evaluation to determine whether improvements are needed to help that program achieve its objectives. Rental Construction Financing Initiative (RCFI) The Rental Construction Financing Initiative (RCFI) was described in detail in the July/August 2017 issue of RHB Magazine. That program is over subscribed. While it is open to municipalities and social housing providers, as well as the private sector, for-profit landlords have submitted 73 per cent of the applications. As per the article on page 40, CFAA supports RCFI, provided the bulk of the approved projects are located in high needs areas, such as the Toronto CMA, the Greater Golden Horseshoe, Victoria, and Metro Vancouver. CFAA made that point abundantly clear in our input into the program evaluation.

the federal government about the National Housing Strategy, and how to make it more effective. CFAA is an active member of CHPR. A current CHPR project is researching the ways the federal government can best encourage energy retrofits by rental providers with rental towers, through the Repair and Renewal Stream (which has $5.7B available). CFAA’s work on low-rise apartment issues Some housing researchers tend to imagine that Toronto is representative of Canada. However, in the Toronto CMA more than two out of three rental apartments are in towers, while one out of three is found in low-rise apartment buildings, whereas for Canada as a whole, the proportions are reversed. Those figures are for the purpose-built rental stock. Still more rental units are found in the secondary market of rented single family homes, duplexes, doubles and condos held by small investors.

PURPOSE BUILT APARTMENT UNITS SPLIT BETWEEN HIGH-RISE AND LOW-RISE >5 storeys

<5 storeys

Toronto – Total 508,895 units

CMHC has assured CFAA that the RCFI funding is being focused on the high needs area. In other areas, only a few projects are being approved. Those approvals are limited to projects which serve unmet needs, such as a small building with an elevator to serve seniors and disabled people in communities which currently lack such accommodation. In the RCFI program review, CFAA also indicated the need for speedy and efficient approvals (or rejections), and more openness about the interest rate benefit that the program delivers. Canadian Housing Policy Roundtable (CHPR) Readers may recall CFAA’s active participation in the National Housing Collaborative (NHC), which worked extremely well in the consultation about the National Housing Strategy. The replacement for the NHC is the Canadian Housing Policy Roundtable (CHPR). The CHPR mandate is to provide input to CMHC and

38 | Sept- Oct 2018

Canada – Total 2,715,710 units

NATIONAL OUTLOOK CFAA has applied for government funding to lead research and consultations to help to improve the Repair and Renewal Stream by speaking for the owners of Canada’s low-rise rental stock which is low-rise apartments, as opposed to towers. We have been advised that our research submission is eligible. CMHC is now sorting through the eligible submissions to select the “best” ones. CFAA will pursue those issues, even if we do not receive specific funding for that research and consultation. Canada Housing Benefit The NHS commits $4B for a new Canada Housing Benefit, but many design elements are still to be determined, including the extent to which that benefit will be available to tenants in the private rental market. With CFAA’s new direct members, the CFAA Board or GRC committee will determine what elements are needed to make housing benefit programs work best, and then I expect we will lobby for those elements. For more details, see July/August 2018 issue of National Outlook in RHB Magazine at page 40. Income taxes and the GST CFAA has not forgotten about the desire for tax reform among rental housing providers. In fact, we spent considerable time on the various tax issues while the Harper government was in power. However, despite the general preference for tax reductions by the Conservatives, they were not willing to overcome the opposition to tax reductions for rental housing among the key officials in the Finance Department. Based on high-level government relations advice, the CFAA Board has realized that we have to take a long-term, strategic approach to that issue. Establishing that the benefits of lower taxes on rental housing will be received by renters in the long-term would be a huge advance in our efforts to achieve tax reform. Economic theory and housing economists support that view, but for that view to have credibility it needs to be advanced by academics. With the necessary resources over the long haul, I believe that result can be achieved, and taxes on rental housing can be reduced. Rental housing suppliers will still benefit, and that applies especially to existing holders of rental housing. Rental suppliers will also benefit from the larger industry that should result from reduced taxes.

A UNIFIED POLICY FOR THE WHOLE RENTAL HOUSING INDUSTRY As we add direct members, CFAA will work to create a succinct statement of a unified policy for the rental housing industry as a whole. All the associations which represent sectors of the rental housing industry need to come together with government relations advisors to determine what we can achieve and how best to express and to seek our combined goals. The plan may not be the plan that every rental provider would seek if they each acted alone, but we need to act together and that requires compromise. We also need money and engagement to determine the best plan; hence the current direct membership drive. The groups CFAA will engage with to create this unified policy include: •

• • •

all the CFAA-member associations (including the Federation of Rental-housing Providers of Ontario (FRPO), LandlordBC, and nine more) major rental housing providers across Canada, REALpac, and the Canadian Home Builders’ Association (CHBA).

It would be ideal if we could also bring on board the landlord associations who are not currently CFAA members, including the many associations which bring together small landlords in relatively small places. With the buy-in of our new direct members, CFAA expects to lead efforts to organize all the associations to come together to formulate a policy for the whole Canadian rental housing industry. If you are interested in talking part in that work, or in contributing ideas for that work, please e-mail Jeremy Newman, CFAA Director of External Relations, at jnewman@cfaa-fcapi.org.

rentalhousingbusiness.ca | 39

September- OCTOBER 2018 INCENTIVES FOR NEW RENTAL CONSTRUCTION â&#x20AC;&#x201C; WHERE ARE THEY POSITIVE?

In many areas of Canada, vacancies are high and rents are relatively low, and are not rising much or at all. In other areas, vacancy rates are low, and rents are relatively high and rising. The figures show some examples.

Apartment Vacancy Rate (all unit sizes) Low demand

High demand

Average Rent of 2BR Apartments High demand

Low demand

Examples of areas with high vacancies and stagnant rents are Atlantic Canada (except for Halifax), Quebec (except for Quebec City and Montreal), much of small town Ontario, and many areas of the West. In the areas with low rental demand, high vacancies and stagnant rents, subsidizing new rental buildings with taxpayer money is a waste of that money. CFAA opposes construction subsidies in those locations. However, in the areas where rents are high and rising, including Greater Vancouver and Greater Toronto, new rental supply is badly needed. Many rental providers want to build new rental units, and the owners of

40 | Sept-Oct 2018

existing rental buildings are well satisfied with their rents and want to see new rental development. Encouraging new rental construction in those markets is good for the rental housing industry, and a good use of taxpayer money. CFAA supports construction incentives there. CFAA believes the positon above aligns with the positions of our member associations in the different areas, and with the views of rental housing providers and most rental developers. Please feel free to agree or disagree, but let us know, at president@cfaa-fcapi.org!

NATIONAL OUTLOOK CFAA Rental Housing Conference 2019

CFAA Rental Housing Conference 2019 will be held from Monday, May 13, to Wednesday, May 15 in Toronto, with the Annual General Meeting and Board meeting on Monday morning, and the building tour on Monday afternoon. The education sessions will be held at the Hyatt Regency Hotel in downtown Toronto, starting with the Welcome Reception on Monday evening. As in past years, CFAA expects to hold two full days of education sessions on Tuesday and Wednesday, May 14 and 15. The 4th annual CFAA Rental Housing Awards Dinner will be held on Tuesday, May 14. This year, CFAA intends to reach out more to rental housing providers to organize the program. Please let us know if you are willing to give us input about the session topics or speakers, or to help organize or moderate one or more sessions. E-mail your interest to events@cfaa-fcapi.org, best by November 15.

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President’s message The WRAMA Expert Panel held at the Tannery Event Centre in downtown Kitchener was an overwhelming success, with over 70 people attending and closing remarks provided by Kitchener Mayor Berry Vrabanovic. A keynote address was provided by Jim Foote, Assistant Vice President, Commercial Financing at First National Financial LP. Highlighting national and global trends, Jim was clear in addressing the value of the implementation of the new LRT, the growing tech hub and Waterloo Region’s vicinity to Toronto as factors having a positive impact on home and residential values.

Price Index (CPI), which is calculated monthly by Statistics Canada. The 2019 guideline is calculated by averaging the percentage increase in the CPI during the 12 months from June 2017 to May 2018. By law, the rent increase guideline cannot be more than 2.5 per cent, even if the CPI increase is higher. (LTB Brochure: 2019 Rent Increase Guideline) Stay tuned for future meeting topics, membership offers and more training sessions supporting the mandatory standardized lease over the coming months. If you are a landlord or own residential rental property in the Region of Waterloo, contact WRAMA at membership@ wrama.com.

Annual panel discussion Every year WRAMA gathers a number of experts from various fields to discuss what is happening in the rental housing market throughout the Waterloo Region. It’s an opportunity to review what has happened over the past year, and look ahead at potential trends.

With municipal elections taking place October 22, 2018, it is important for landlords to get informed and vote. WRAMA has invited the three mayoral, four regional chair and 23 councillor candidates who are running for positions in the City of Waterloo to attend its next meeting on October 10, 2018. The City of Waterloo is the only one to have residential rental licensing in the Region. The meeting will take place at Golf’s Steakhouse, with more details available at www.wrama.com. A reminder that the 2019 Residential Rental Increase Guideline provided by the Province of Ontario is 1.8 per cent. The rent increase guideline is based on the Ontario Consumer

This year’s panelists include James Craig, Senior Sales Associate, CBRE Limited; Adam Hoffman, President, Hoffaco Property Management, and Salesperson, RE/MAX Realtron Realty Inc.; Jim Foote, Assistant Vice President, Commercial Financing, First National Financial LP; Kayla Andrade, President, Ontario Landlords Watch; and Gail Kukor Lang, Paralegal, Cohen Highley. The panelists began with a discussion of the pending municipal election, and what candidates should prioritize as it relates to residential rental provision. Mr. Foote said that politicians should be looking at policies to promote midrise development along the new LRT and BRT routes, such as reducing parking requirements, requiring minimum density on new development along LRT routes, speeding up municipal approvals for mid-rises, and reducing parkland dedication or development charges for targeted areas for development.

rentalhousingbusiness.ca | 45

Ms. Andrade stated that housing is a key issue facing municipalities and regions. She explained that elected officials at the regional level are trying to encourage investors to create secondary suites with incentives such as forgivable loans and municipalities are creating a policy for zoning changes and making it easier for homeowners to obtain a permit. However, the RTA, LTB, landlord licensing, short-term licensing and city utility policies are discouraging investors from investing in residential rental properties. “These topics need to be discussed and reviewed by our municipal government and we encourage our municipal councillors to connect with our elected officials at a provincial level and federal level as the housing needs all three levels of government support,” added Andrade. Mr. Hoffman thought that they should focus on elimination, or reduction in cost, of supply reduction, and complexity of rental licensing. He explained that they should focus on safety instead of frustrating supply. Mr. Craig thought that candidates entering the race should understand the role of development in increasing rental supply. The next topic for discussion was the impact of rental licensing in Waterloo, and predictions for its future. Mr. Hoffman stated that it has resulted in less choice and higher costs for renters, as well as higher costs, bedrooms lost, time wasted, and frustration for property owners. “The policy goals have not been met, and an entire scrapping or rewrite of the legislation, with an eye to simplicity and safety of the legislation, is needed,” said Hoffman. “I don’t have a crystal ball, though I will speculate that the City will continue to work with rental providers to minimize the challenges operators face with licensing. I’m hopeful that over time the costs and some of the unnecessary complexity and barriers to supply will be reduced.” Mr. Foote stated that it would slow further conversion of single-family homes to multi-bed student properties. It will also increase costs for good landlords who abide by safety measures and density restrictions, although over time it will benefit professional managers and landlords. Ms. Andrade argued that landlord licensing has been one of the reasons why rents have increased in Waterloo, and that landlords need to recoup the cost of the license and the cost of the inspections to obtain the license within the rent. “It’s hard to say what the future of the program will be but it is likely that licensing will always be part of the landscape,” said Craig. “The hope is the cost for licensing will be reduced as the program matures and costs stabilize.” The pending legalization of marijuana was also a hot topic, and there was much discussion on how landlords should prepare. Mr. Foote spoke about the risks, and said that landlords should consider altering their lease agreements to include exclusion in their rules and regulation clauses. Mr. Hoffman stated that providers should create proactive no smoking and growing policies to the extent allowed for by law, and clearly communicate this information to residents through multiple channels and added to leases. Ms. Andrade added that landlords should be speaking with their insurance company regarding marijuana growing within the rental property, as many insurance companies will not cover the property knowing the tenant had a grow op inside the rental property. Mr. Craig stated that there

46 | Sept-Oct 2018

are a number of issues to consider, such as the tenant’s ability to smoke in a rental property and how it could interfere with a tenant’s right to quiet enjoyment, given the noxious smell of marijuana products. There is also the challenge of tenants’ right to grow marijuana in their rental units, and the stigma attached to that. The final topic of discussion was affordable housing, and its impact on landlords in the Waterloo region. Mr. Foote explained that CMHC and the federal government have marked $17 billion for development and redevelopment of affordable housing. He stated that these funds will start to flow to existing non-profits and co-ops to further develop or renovate their rental housing. “There is a need cross-country and especially in cities the size of Kitchener-Waterloo,” said Foote. “There are several programs where private landlords can receive preferred funding for inclusion of affordable rental in their projects. Ontario legislation now permits municipalities to exploit inclusionary zoning where a landlord is developing greater than 10 units. This will likely be used on higher density projects and will impact how new projects are being designed within Kitchener-Waterloo.” Mr. Hoffman weighed in, saying that there was a need for better government action to provide, or perhaps better fund and regulate, private supportive housing. This would reduced challen-

ges to operators and other renters in buildings with disruptive residents. Ms. Andrade thought all landlords in Ontario should be concerned that elected officials might implement full rent control. This would require landlords to submit their lease to the LTB stating the current rent for that year, so they can monitor and control future rent increases in between tenants. She was hopeful that, with a new government in power, this will not happen. Mr. Craig stated that a two-pronged approach would be ideal. Affordability applies to home prices and rental pricing. He believed that a major factor for increased prices and rents is the lack of product available compared to the strong demand in the marketplace. Building more product would help ease the increases, and fortunately there is a strong pipeline of condominium and rental product in the Region that is bringing more product to the market. “The other side of the coin is the push for affordable rents in new buildings,” said Craig. “This seems to be an issue that will dominate discussions as new developments are being approved. The municipalities are favourable to increasing the density of projects should the developer provide affordable rents for a percentage of units within a development. This is being done with what is called bonusing.”

Discover the benefits of being a member of our association The mission of the Waterloo Regional Apartment 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 managment resources we offer to our members, or to apply online go to http://wrama.com/, or contact WRAMA at 519-748-0703.

rentalhousingbusiness.ca | 47

48 | Sept-Oct 2018

EOLO panel on the strong rental housing market At the EOLO Education Event on September 20, members heard a fascinating discussion about Ottawaâ&#x20AC;&#x2122;s hot rental market. Moderator John Dickie led the discussion by: AL BOLDUC - Managing Director of Operations of Ferguslea Properties Limited, which owns and manages Accora Village in Bayshore Ward, of the City of Ottawa. GEOFFREY A. YOUNGHUSBAND - Senior Vice President of Osgoode Properties, which owns and manages residential, commercial and land holdings in Ontario, Quebec, Alberta, Florida and Georgia. AIK ALIFERIS - CEO and one of the founding partners of Primecorp Commercial Realty. Working for some of the largest institutional and private investors in Canada and abroad, Aik has sold investment properties with a total asset value approaching $5.0 billion. In an initial poll, no one in the audience disagreed that the Ottawa rental market is hot; and so, the panel got right into why that is the case. Rental demand Aik began by saying the state of the market is a reflection of basic economics. Demand has gone up more than supply; and so, vacancies are down and rents are rising. On the demand side, Aik noted the population growth Ottawa is seeing, including high tech workers, public sector workers and immigrants, who tend to rent. Al added the facts that the unemployment rate is very low, and new employers are expanding, including Shopify, and the construction sector.

According to Aik, we are also experiencing a change of preferences, especially among Millennials. Young people used to live at home, then rent and then buy a home, but now there is a greater preference to keep renting. On the other hand, rental supply is not keeping pace with the increase in rental demand. Geoff addressed the recent change to the mortgage rules. When he and the other panelists were young, the sequence Aik described was the norm. However, for several years now, house prices have escalated. Until this year, that price escalation was largely offset by low interest rates. Then, starting in January, the new CMHC stress test required new buyers to qualify for a mortgage of the amount they want to borrow at the posted five year interest rate. That rate can easily be 2% higher than the rate available to home buyers. Geoff sees the new stress test as a key trigger that slowed down the normal movement from renting to buying. Rental supply While rental demand is up, rental supply has not increased by the same amount. There is a considerable amount of new rental development and construction, but not enough units are being completed. The panel noted the length of time it takes for projects to receive the needed approvals. Forty or 50 years ago, a developer could buy land, get the approvals in a year, and then build in two years, but now the approvals can easily take four years. As well, increased municipal changes and requirements raise the cost of new construction, and make projects less attractive until rents move a considerable amount. In that regard, Aik referred to new developments now achieving rents of $3.00 or $3.50 per square foot, or up to $3,500 for

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a two bedroom apartment. The market for those units is often Baby Boomers who are downsizing from their single-family homes. John described the federal government programs that are meant to stimulate rental construction with an affordability component. See page 38. Changes to buildings The panel moved on to discuss what changes rental housing providers are making to their buildings. For the last two or three years, Osgoode has been renovating many apartments on turn over. Throughout, they offered prospective tenants a choice of an unrenovated apartment at one rent, or a renovated apartment at a higher rent. There was demand for both. However, recently there has been so much demand that Osgoode has lacked vacant units to renovate. As well, trades have become more expensive and less available because of all the infrastructure and industrial construction. Al reported that Ferguslea is still moving substantial numbers of units through their upgrade program, in particular as they are repositioning two buildings. Geoff stated his view that the market is working well. A few years ago, prospective tenants could afford upgraded units, and Osgoode and others supplied them, as well as supplying units in good condition, but without the upgrades. Now, more prospects are satisfied with the existing units, and they do not want to spend more money on upgraded units. The market is supplying that set of rental units. New building technologies Aik commented on the new technologies that rental developers are adding in new buildings in New York City and Toronto and sometimes in retrofits. One is parcel storage and management facilities, often including cold storage for grocery deliveries. Sometimes space is obtained by demolishing one or two rental units, or space taken from the garbage room. Another new technology is facial recognition software which unlocks or opens the building doors, and the tenantâ&#x20AC;&#x2122;s suite door, based on a computer scan of the tenantâ&#x20AC;&#x2122;s face. How long will the hot market last? The panel then turned to the future of the hot market. All of the panelists see the current situation of high demand (with a shortfall of supply continuing for several years. Aik sees it continuing for five or even ten years, in large part due to the long approval times for developments, and the fact that transit and infrastructure building is absorbing the available construction trades. None of the panelists thought that the cancellation of NAFTA would slow down the Ottawa market, although NAFTA problems would cool down other Ontario centres which rely more on manufacturing than Ottawa does. Geoff suggested that a federal Conservative Party win in the election scheduled for October 2019 could slow the Ottawa market back to normal because of program and government hiring restraints.

50 | Sept-Oct 2018

City of Ottawa Rent Supplement program

•

For many years, EOLO has advocated the use of portable housing benefits and rent supplements as the most effective approaches to supporting low income tenants who have trouble affording the housing they need. Under the Rent Supplement program, the City of Ottawa enters into an agreement about the rent, the tenant pays a portion of the rent (based on their income), and the City pays the landlord the rest of the agreed rent. Over recent years, EOLO has repeatedly raised the key issues in obtaining landlord take-up with City of Ottawa staff and City Councillors. The City has now made major improvements in the Rent Supplement program. The key changes are:

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Units can be placed in the program for the initial tenant only (i.e., one-time commitments)

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Under certain conditions, the City will pay for undue damage caused to the unit The rents that can be charged have been increased dramatically The rents that can be charged now vary with household size The rents that can be charged now vary with the rents landlords are currently obtaining on turnover, rather than the average rent of all similar units in the building

Those were all EOLO suggestions to make the Rent Supplement program more attractive. One issue which still exists is the question of whether landlords can refuse to rent to the tenant sent to them from the top of the social housing waiting list. Clearly the City wants most landlords to accept that tenant most of the time, but it is unclear as to the extent to which the City will accept a refusal of the first referral some of the time. EOLO is addressing this issue, and the question of insisting on tenant insurance.

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 be able to: • Receive

prompt emails of relevant City rule changes

• Attend

two networking receptions a year

• Attend

two free education events a year

•

Receive all 6 annual issues of RHB Magazine with current developments, City and 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.

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Advocacy with Integrity.

Mathers-Prior is one of the leading providers of legal services to residential landlords in Ontario. We provide representation to landlords of all sizes. Landlord Representation and Advocacy • Evictions • Sheriff Enforcement • Small Claims Court Representation • Judgment Enforcement

Phone: 519-661-1010 info@mathers-prior.ca 52 | Sept-Oct 2018

President’s message With the upcoming municipal election on October 22 this year, we have encouraged our members to vote and, if they were going to be meeting with their municipal candidates, to ask them to push for changes that will better the industry. Make sure your candidate understands that licencing housing providers will have a negative impact on affordable housing. Talk to them about the unfairness of property taxes for tenants and that portable rent subsidies directly improve affordability. Talk to them about helping to create more reasonable bylaw enforcement and stronger support for housing providers dealing with disruptive tenants. Suggest to them that opening up more land for development and intensification along with incentives to private development will help create more affordable housing opportunities.

Symbiotic relationship between housing providers & tenants The housing provider and the tenant have a unique relationship unlike any other supplier / customer connection. In other industries, the supplier offers a product and the customer purchases and uses that product. If the customer is not happy with the product, they can very easily take it back and get that product someplace else, and the supplier is able to sell their product to an unlimited number of customers. The Rental Housing Industry, however, does not work that way. An unhappy tenant is often stuck with their purchase and the housing provider is always limited to a set number of customers. The added level of this unique symbiotic relationship is, of course, the very personal product of “home.” Both the housing provider and tenant understand the importance of the product, and the success or failure of the product depends on the agreement between the purchaser and the supplier. The housing provider sells a safe,

clean, affordable product and the tenant agrees to pay for the product while using and maintaining that product. Most of the time (say 95 per cent), this exchange is beneficial, both parties are happy and there is nothing newsworthy to talk about. It’s the 5 per cent that gets the headlines. If the housing provider’s product changes and is no longer safe, clean or affordable, then the relationship is stressed. The same goes for the tenant who no longer pays for a product they are using or destroys it through vandalism, interference with other tenants or by-law infractions. Once this relationship is stressed, both the tenant and the housing provider suffer. The major housing issue in the news today is affordable housing. When the topic comes up, many people automatically think the housing providers are making housing unaffordable. From a tenant’s point of view, the answer is simple: lower the rents and make it more affordable to purchase the “home” product. From a housing provider’s point of view, supply, income and housing incentives need to increase, so the “home” product can be more affordable to produce. Today’s affordable housing fears translate into poor behaviour on both sides. Tenants fear losing their home and housing providers fear losing their livelihood. For some, what was once a healthy exchange of product and transaction becomes bitter resentment with feelings of abuse from both parties. So how do we get past the desire to villainize each other and find our way back to a balanced, symbiotic relationship? Understanding - It’s a simple solution that anyone on opposing sides of an argument should do. In this heated environment of affordable housing crisis, we seem to see only one side of the argument. If we can take a moment to truly understand what the other party is going through, we would be able to find a solution quicker than just pointing fingers. If a rental housing provider understood

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“If we can take a moment to truly understand what the other party is going through, we would be able to find a solution quicker than just pointing fingers.”

that the tenant truly had no other income to pay for their rent, then they would wonder why there are not more social assistance initiatives and basic income programs in place for low income earners. If the tenant understood that the cost of providing housing has increased far more than the allowed 1.8 per cent rent increase, they might wonder how housing providers even stay in business. They might direct their frustration to a government system that makes it difficult for housing providers to maintain a thriving business. Education - What are your rights as a housing provider, and what are your rights as a tenant? How can you make an informed decision about housing if you don’t have all the facts? The more we all understand the LTB, by-laws, zoning and other issues that affect both the tenant and the housing provider, the easier it will be to find common ground and a solution that benefits both. “Tenants want a place to rent and housing providers want tenants.”

Fairness – No one likes to think they are getting ripped off or treated differently. If we follow the first two points of understanding and education, then being fair should be easy. Each party should walk out of the “home” transaction feeling they were treated fairly. The tenant should find value for their money and the housing provider should feel they got a fair price for their product. We are in this together; without rental housing providers there would be no rental housing for tenants, and without tenants there would be no rental housing providers. This symbiotic relationship is so different from any other supplier and customer transaction because “home” is the product. It needs to work and not be adversarial in its attempt to find balance because so much depends on its success. Tenants want a place to rent and housing providers want tenants. Anyone who suggests that tenants shouldn’t pay for their product or housing providers should give away their product for free doesn’t really want to find a solution. Perhaps we should look at who benefits from housing providers and tenants being at odds, because it’s certainly not the tenant or the housing provider.

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Latest HDAA events Stump the board dinner meeting

Financing for Landlords education seminar

The September 12 dinner meeting was the annual “stump the Board” Q&A. Many members attended with questions they wanted board members to answer. A variety of important issues were talked about and the board gave tips on ways to save money, improve business and handle difficult situations with tenants. Here are a few of the questions they answered; 1. What are some good tips for landlords to save money or increase revenue? 2. In today’s instant communication age, are on-site supers still essential? 3. Ontario, and especially Hamilton, has seen a lot of tenant activism recently. How do you think housing providers should respond? 4. Is there any update on licencing in Hamilton and surrounding areas? 5. What are the benefits of insuring your mortgage through CMHC? 6. Short-term rentals seem to be more popular. What are your thoughts on why and how this will affect housing? 7. What do you think about tenant screening apps to help with tenant screening?

Mortgage broker, Carmen Costa, was the guest speaker at the Financing for Landlords seminar on September 13. In this seminar, Carmen addressed different ways housing providers can move to the next level in terms of number of investment properties. When interest rates are low, refinancing your existing mortgage and switching to a better rate may save you a lot of money – possibly thousands of dollars per year. Perhaps your home is financed through a first and second mortgage. If so, reviewing your options to combine the two could also result in having more money left over at the end of each month. Carmen also talked about how to use total equity financing to increase your portfolio of properties. Her tips on what to ask your financial, accounting and legal contacts were informative and powerful. Those who attended this “insider’s view” of financing walked away with information they can use to grow their business! “We are in this together; without rental housing providers there would be no rental housing for tenants, and without tenants there would be no rental housing providers.”

Hamilton and District Landlords Since 1960, the Hamilton and District Apartment Association has grown significantly. Our members manage over of 30,000 units throughout Hamilton, Burlington, Brantford, Guelph, Mississauga, Oakville, St. Catharines and into the Niagara Peninsula. The association is a highly respected organization, sought out regularly by government, industry, media and the public.

Interested? Call us or join online! Ph: 289-208-5445 Web: www.hamiltonapartmentassociation.ca

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Comfy living for tenants. Comfy energy bills for you. Weâ&#x20AC;&#x2122;ll cover up to 50% of the cost when you upgrade to high-efficiency equipment The Affordable Housing Conservation Program provides financial incentives for high-efficiency space and water heating equipment, heat recovery, building automation systems and more.

Visit uniongas.com/affordablehousing to learn more.

56 | Sept-Oct 2018

President’s message – Learning something new every day

We’ve been on a steep learning curve this year with the changes to the Residential Tenancies Act, the provincial standard lease and now the legalization of cannabis. One benefit of being an LPMA member is having access to these hot topics through our seminars and speakers. Here are some sessions you won’t want to miss: Property Management 101 Session 1 on November 6 will include rent rules, maintenance and repairs, as well as fire safety and leasing. Session 2 on November 22 will focus on enforcing the lease, problem tenants, and damage and rent arrears. Cannabis At the October 9 members’ meeting, lawyer Joe Hoffer will discuss what the legalization of cannabis means to landlords. Go Green On November 13, Hans Schreff from London Hydro will outline new programs that will help landlords save money on utilities. These sessions offer a great learning opportunity. I hope to see everyone there! - Lisa Smith, LPMA President

Steps landlords can take to restrict marijuana use in their buildings With the legalization of marijuana set to take effect on October 17, many landlords are determining how they can limit its use in their buildings. According to one legal expert, they have two choices: prohibit all smoking completely or introduce restrictions that allow tenants to smoke outdoors. London lawyer Joe Hoffer says that landlords can introduce a blanket no-smoking policy prohibiting tenants from smoking anywhere on the property, as long as their leases and tenancies are new. That policy is described in the LPMA lease as prohibiting the smoking or burning of any substance and, specifically, the smoking or vaping of tobacco, cigarettes

and cannabis or the burning or smoking of other substances. Hoffer says that some landlords decide to make exceptions to their blanket no-smoking policy to enable residents to smoke on their balcony or a specific number of feet from the entrances. Introducing restrictions instead of a blanket prohibition improves the chances of tenants accepting the policy. “Either option is fine,” Hoffer says. “When you do that with a new building, there’s really no issue.” Hoffer, who will discuss the consumption and cultivation of marijuana at an LPMA meeting on October 9, cites the example of a London developer who constructed two high-rise apartment buildings. Only one was marketed as a no-smoking building. “They leased the no-smoking building faster than the other and they got a premium in the rents,” Hoffer recalls. “It was very well received in the rental market.” However, in a building with established tenants, it’s more challenging to initiate a no-smoking policy. “With current tenants, you need to be a little more nuanced in how you introduce it,” he says. For example, landlords need to grandfather in existing tenants who smoke, which allows them to continue to light up, even though new tenants won’t be allowed to smoke. Landlords also need to have new tenants acknowledge their understanding in writing that existing tenants may smoke. In exchange, the landlord promises to curtail any interference to the non-smoking tenants’ reasonable enjoyment of the premises. When tenants are grandfathered in, landlords should note that fact in the leasing documents, Hoffer says. Eventually, buildings in that situation will become no-smoking communities as the tenants who were grandfathered in move out over time. Hoffer says there is a human rights exception in the LPMA lease to no-smoking policies. The exception applies to those from different religions

rentalhousingbusiness.ca | 57

or cultures, such as First Nations, who may burn substances like sweet grass. The exception prevents tenants from being able to successfully accuse landlords of discriminating against them. However, tenants with disabilities can consume cannabis in edible form without smoking it, Hoffer says. Or, if they do need to smoke it, they can do so outdoors with the tobacco smokers, unless they have mobility issues that may require accommodation by the landlord. In older buildings, landlords can also restrict where existing tenants can smoke. Hoffer drafted the LPMA lease in the early 1990s and a set of rules and regulations includes one that states that landlords, on reasonable notice to their tenants, can introduce additional rules and regulations as additional terms of the tenancy. “We’ve used that provision of the current leases for the current grandfathered tenancies to restrict smoking,” Hoffer says. “We have implemented rules under the provisions of existing leases.” When a landlord client asked Hoffer to use that provision, the building in question had 200 units and many of the tenants were smokers. The rule was imposed to restrict smoking to balconies and outdoor areas instead of the interior of the rental unit. Hoffer cautioned the landlord to expect resistance, but there was none. “It really surprised me. We’ve implemented it in a number of buildings without incident,” Hoffer says. “Legally, it’s completely appropriate and, as a practical matter and certainly at a legal proceeding level, we’ve seen nothing (in objections from residents).” Some cases involving smoking have gone to the Landlord and Tenant Board and the landlords have been “overwhelmingly successful” at evicting tenants where the landlords had sufficient evidence to demonstrate that a tenant’s smoking had disturbed other residents and their use and enjoyment of the premises, Hoffer says. In those cases, the landlords first tried to mitigate the seepage of smoke into neighbouring units. The landlord can also ask that the Board issue an order prohibiting the tenant from smoking in the rental unit with a condition attached that if the tenant breaches the order, the landlord can apply to the Board, without notice to the tenant, for an order evicting the tenant based on the tenant’s failure to comply with the no-smoking order. If landlords need to go to the Board, Hoffer recommends that they bring in the tenants who are complaining and the smoking bylaw enforcement experts from the Middlesex-London Health Unit for a presentation on the harmful effects of second-hand smoke. “It’s all quite effective,” Hoffer says. Hoffer stresses that landlords can’t restrict cannabis without also restricting tobacco, since such a move would invite human rights’ complaints. If landlords allow tenants to smoke tobacco and not cannabis, it appears they are prejudiced against having cannabis in their buildings and someone with a cannabis prescription would have a strong case that the rule is discriminatory.

58 | Sept-Oct 2018

Housing mediation service helps landlords, students resolve disputes The housing mediation service at Western University and Fanshawe College deals with more than conflicts between students and landlords. It also helps to resolve discord between students and their roommates, and even students and their neighbours. With such a broad mandate, success might seem elusive at first glance. However, mediation is nearly 100 per cent effective — as long as both parties are willing to meet. “Where we have a problem is getting people in the room,” says Glenn Matthews, housing mediation officer. “But when we get people in the room, we’re almost 100 per cent (successful).” Mediation helps both parties to appreciate the other’s point of view, says Matthews, who has held his position since 1989. Most disputes involve a misunderstanding of the other person’s position or of what the law requires. “Sometimes a landlord will write into the lease that the tenant is responsible for the smoke detector when, by law, it’s the landlord’s responsibility,” Matthews says. The service, which is free of charge, deals with 2,000 to 2,100 files per year. Each file represents a query from a student, landlord, neighbour or roommate. Most can be settled through an exchange of information while the remaining 10 per cent require mediation. Matthews speaks to each party independently to ensure they are willing to discuss their problems

jointly. However, some are so convinced their position is correct that mediation is difficult. In other cases, the parties haven’t identified the real source of their conflict. Matthews writes all of their issues on a flip chart when they meet and they tackle the easier issues first. “If everything can be agreed to, we write out a document that is a record of the mediation and both parties sign it,” Matthews says. Landlords usually call the service because their tenants aren’t paying the rent or have damaged the property. Lack of maintenance is one of the top reasons that tenants call, while neighbours are often concerned about parking, garbage and noise. In addition to Matthews, off-campus advisors work to resolve issues and educate landlords and students. They communicate their message through videos and social media, as well as presentations in student residences. The housing mediation office addresses common problems through a section on the website, www.offcampus.uwo.ca. It covers relevant legislation, municipal bylaws, fire safety regulations and frequently asked questions pertaining to noise, traffic and parking. Staff send an informative newsletter to tenants and another to landlords who list their rental units, for a nominal fee, on the off-campus housing website. “As soon as we send the newsletters out, we start getting questions,” Matthews says. Matthews suggests to new landlords, in particular, that they study the relevant legislation and join LPMA. New landlords don’t always consider the problems that bad tenants can create and only half demand that tenants secure guarantors. “Unless you’re treating it like a business, it can get away from you,” Matthews adds.

London Property Management Association (LPMA) is a non-profit organization, located in London, Ontario, Canada, that provides information and education to landlords. LPMA represents the interests of both large and small property owners. The association has more than 400 landlord members representing approximately 35,000 rental units. Membership is open to landlords and property management professionals who own or manage one or more residential rental units.

rentalhousingbusiness.ca | 59

Suite Count

Brought to you by:

RHB SIDEBAR Capital markets & national investment snapshot

National Apartment Group

Edmonton Market overviewAVID Paul Chaput, Senior Vice President, CBRE – National Apartment Group Edmonton A strengthening of Edmonton’s multifamily market has been evident throughout the first half of 2018 with overall vacancy of 5.3% and a stabilization of average rental rates. Edmonton’s economy continues to improve with over 10,000 jobs created between June 2017 and June 2018. In addition, GDP is expected to grow by 2.8% in 2018 and population is expected to grow by nearly 80,000 people over the next four years. The city boasts a young demographic with an average age of 37 and 30.1% of the population categorized as Millennial, resulting in the propensity to rent for both lifestyle and financial implications. Purpose-built rental vacancy has declined 0.6% over the previous 12 months and tenant demand continues to shift toward specific requirements including more efficient design and desirable amenities. This has led to a significant vacancy difference between new buildings (built after 2000) and older buildings (built before 2000). New developments carry a favourable vacancy of 4.0% while older assets are at 5.8%. The most noteworthy discrepancy is in the wood-framed category where new product vacancy reports 3.8% vacancy and older is at 6.3%. With limited market supply, townhouses of all ages report the lowest average vacancy at 4.7%.

60 | Sept- Oct 2018