RHB Magazine Jan 2019

Page 1

Vol. 11 No. 6 January 2019

Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives

2018 - Year of the data breach Cyber security was a huge issue in 2018 and it will become more prevalent in years to come.

CFAA CFAA expands member services and engages a government relations firm to achieve more for rental providers.

The official publication of:

Canada’s elevator industry needs an overhaul The Auditor’s report identifies serious problems in the elevator industry.

Year in review What happened in 2018 that affected the rental housing industry, and what changes still need to be made?

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EDITOR’S NOTES Happy New Year! It’s a month or so late, but I’d like to wish all our readers a Happy New Year! I’m sure that most people are glad to see a new year before them. I rang in the new year on vacation in Mexico, waking up to my first ever bout of vertigo. It was very unpleasant, and I hope to never repeat the experience. However, I did enjoy my vacation with the family, and got to climb my second pyramid. I’ll take the bad with the good as long as the latter outweighs the former, which it did. The January issue of RHB Magazine features an article on the results of Ontario’s Auditor General report, which examined the failings of the Technical Standards and Safety Authority (TSSA). The report found significant issues with the TSSA, as well as the province’s elevator industry. While the report was focused on provincial issues, the problems with the elevator industry, and elevator maintenance firms, are national in scope. In addition to spelling out some of the serious concerns, the article provides direction on how to improve the situation, particularly for building owners. Two articles take a look back at what happened in 2018. The first examines the events that affected the rental housing industry on a national and provincial level, including new recreational marijuana legislation and Ontario’s PC government, and what issues remain to be addressed. It also discusses two new incentive programs geared toward increasing the development of rental stock. The second article looks at how all industries have been impacted by data breaches, and what this means for members of the rental housing industry Don’t forget to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. And see what CBRE has written about decreases in turnover rates in the Suite Count section. Of course, we always enjoy hearing from our readers, and we want to 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 | January 2019

Co-founder, Publisher

Marc Côté marc@rentalhousingbusiness.ca

Co-founder, Director

Juan Malvestitti juan@rentalhousingbuisness.ca


David Gargaro david@rentalhousingbusiness.ca

Contributing Editor

John Dickie, President CFAA jdickie@rentalhousingbusiness.ca

Senior Graphic Designer Kyu Shim

Director of National Sales Nishant Rai

Regional Sales Executive (RAV) Ranjna Bhardwaj

Office Manager Geeta Lokhram


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







Visit our website for complete warranty details

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VOL.11 NO.6 2019

CONTENTS 2018 - Year of the data breach Cyber security was a huge issue in 2018, and it will become more prevalent in years to come. If your business has yet to experience a security or data breach, then it’s only a matter of time.

Canada’s elevator industry needs an overhaul


n 2018, Ontario’s Auditor General published a report on the failings of the Technical Standards and Safety Authority (TSSA). Along with various responsibilities for other sectors, TSSA’s mandate is to promote and enforce public safety in Ontario’s elevating devices sector, which includes elevators and escalators. The report concludes that despite numerous prosecutions of elevator contractors, TSSA has failed to properly monitor and deal with elevator maintenance companies, and that large elevator maintenance companies have failed to follow regulations in conducting the required level of maintenance work and safety testing.

While the Auditor’s report looks at issues within Ontario, the problem with the elevator industry is national in scope. Provincial governments and their agencies across Canada are having ever increasing difficulty getting compliance from elevator maintenance companies, which has caused a significant increase in the number of elevators failing their safety inspections, malfunctioning or being shut down. This issue affects

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

building owners, property managers and tenants across Canada. Using the Auditor’s report as a guide, this article will examine the factors and parties responsible for the sorry state of elevators Hot Topics: across Canada. It will also discuss the issues that elevator owners currently face, and HDAA discusses the debate over the rental attempt to provide solutions to this deeplylicencing pilot project, as well as the results of the January dinner meeting. pg. 45 rooted problem. LPMA talks about how the shortage of LTB

14 | January 2019

rentalhousingbusiness.ca adjudicators | 15 has threatened landlords’

Ontario’s Auditor General published a report on the failings of the Technical Standards and Safety Authority, and identifies serious problems with Canada’s elevator industry.

livelihoods. pg. 49 WRAMA discusses its presentation before Waterloo Regional Council, as well as the implications of tax season. pg. 53 EOLO talks about the new City of Ottawa plan to pay for damage to Housing First units, and the review of the ten year Housing and Homelessness Plan. pg. 57

The Member Associations

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

A year in review for the rental housing industry In 2018, Canada’s rental housing industry faced several significant changes, issues and challenges, some of which will have long-term repercussions.

6 | January 2019

Suite Count Turnover rates decreased to 15 per cent in 2018.

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PRESIDENT’S CORNER This is an exciting time for landlords, and for CFAA. Rental demand is up in many locations, while rental supply has not kept pace. In Ontario, there is hope that the new Progressive Conservative government will make it easier to develop rental housing, and speed up the processing of applications at the Landlord and Tenant Board. In contrast, for landlords in BC, there is concern about what more negative changes the NDP government may make. For CFAA, the activist federal government offers opportunities to gain a better environment for rental providers. The upcoming federal election means all the parties will be settling out platforms, while housing affordability – particularly for millennials – is a hot issue. As well, CFAA has engaged a national government relations firm to provide on-going monitoring of federal initiatives, and to assist CFAA on the key federal issues, including housing and tax issues. Capital Hill Group has been hard at work for CFAA since December 2018. They have been extremely valuable in gathering information and opening doors for CFAA, and in helping to hone CFAA’s messaging to enable us to get the best reception from CMHC and the government.

CFAA will be hosting Rental Housing Conference 2019 from May 13 to 15, 2019, in downtown Toronto. The conference will offer sessions in the following areas: technology, tenant relations, rental development, rental markets, human resources, marketing, and leadership. In addition, CFAA-RHC 2019 will feature Benjamin Tal, and Murtaza Haider and Stephen Moranis (of the Haider-Moranis Bulletin), as keynote speakers. For more information see page 37 or visit www.CFAARHC.ca. CFAA is also expanding the Rental Housing Awards by adding new categories and more inclusive entry rules. See page 39. Finally, CFAA will again run the Rental Housing Compensation Survey. For more information about that, visit www. cfaa-fcapi.org.

As part of a co-ordinated growth plan, CFAA is reaching out to ask major rental housing providers to join CFAA as direct members. The new direct membership dues will pay for the upgraded government relations work, and enable it to continue year round for the foreseeable future. CFAA is also reworking its membership services program to improve and expand membership benefits for all members. Direct landlord members of CFAA will receive even more new benefits. See page 35 for the new benefits, which include better access to the main conference of the U.S. National Apartment Association, known as Apartmentalize, and to NAA’s education programs. To apply to join CFAA as a direct landlord member, email admin@cfaa-fcapi.org, and CFAA will send you the application form.

8 | January 2019

John Dickie, CFAA President

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In this issue of... NATIONAL OUTLOOK 35. CFAA adds new membership services from the U.S. National Apartment Association, and adds expanded government relations work using a firm of GR consultants.

37. CFAA Rental Housing Conference 2019 presents seven topic streams: technology, tenant relations, rental development, rental markets, human resources, marketing and leadership. Learn more and register.

39. CFAA Awards Program launches for 2019, with new awards, more inclusive entry rules and a streamlined application process.

40. Federal NHCF Repair incentive program is now open to more types of repairs, and offers some new flexibilities.

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 | January 2019

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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n 2018, Ontario’s Auditor General published a report on the failings of the Technical Standards and Safety Authority (TSSA). Along with various responsibilities for other sectors, TSSA’s mandate is to promote and enforce public safety in Ontario’s elevating devices sector, which includes elevators and escalators. The report concludes that despite numerous prosecutions of elevator contractors, TSSA has failed to properly monitor and deal with elevator maintenance companies, and that large elevator maintenance companies have failed to follow regulations in conducting the required level of maintenance work and safety testing.

14 | January 2019

While the Auditor’s report looks at issues within Ontario, the problem with the elevator industry is national in scope. Provincial governments and their agencies across Canada are having ever increasing difficulty getting compliance from elevator maintenance companies, which has caused a significant increase in the number of elevators failing their safety inspections, malfunctioning or being shut down. This issue affects

building owners, property managers and tenants across Canada. Using the Auditor’s report as a guide, this article will examine the factors and parties responsible for the sorry state of elevators across Canada. It will also discuss the issues that elevator owners currently face, and attempt to provide solutions to this deeply rooted problem.

rentalhousingbusiness.ca | 15

Multiple levels of failure Every province creates its own legislation and regulations regarding the licensing, operation and maintenance of elevators. Some provincial governments oversee the process directly through one of their ministries, while others employ an independent organization to fulfill these duties. For example, the Technical Standards and Safety Authority (TSSA) is Ontario’s independent authority, while Alberta Elevating & Amusement Rides Safety Association (AEDARSA) provides similar functions in Alberta. Either the ministry or an independent organization is responsible for registering, licensing and inspecting the manufacturing, installation, maintenance, and operation of elevating devices and the companies that maintain this equipment. The regulating body also certifies technicians who work in this industry, shuts down unsafe elevators and escalators, and prosecutes companies that do not comply with safety laws. The problem with Canada’s elevating industry begins at the top, which is either the provincial government or the independent regulator. For example, according to the Ontario Auditor’s report, the Ministry “has not ensured that the TSSA is actually accomplishing its mandate.” The TSSA “has done little to enforce public safety, even though risks to public safety exist.” Also, its oversight processes are not effective in ensuring public safety, and its computer system contains “incomplete information about the safety status of devices and businesses that it regulates.” As evidenced by the Auditor’s report, neither the provincial government nor the TSSA has enforcement powers sufficient to deal with large elevator maintenance companies. In each province, a small number of these firms dominate the market, and they have consistently failed to maintain most operating elevators as per safety regulations. For example, last year in Ontario, more than 80 per cent of elevators “failed their TSSA inspections, mostly because maintenance and

16 | January 2019

safety work required by law was not done on time.” Legislation is not the problem. All stakeholders, including the provincial government, the independent regulators and large elevator maintenance companies, are involved in providing balanced input to the advisory council in creating elevator legislation. All members of this industry, including consumer advocates, have had their say in creating fair legislation. Current elevator legislation spells out what must be done by category, and includes a schedule of when those maintenance requirements must be performed. While large elevator maintenance companies were involved in creating the mandatory requirements, those companies are largely ignoring those requirements. The provincial governments and the independent regulators have failed to make large elevator maintenance companies conduct required maintenance and safety inspections. For example, the TSSA prosecuted the same company several times, which has been found guilty and fined more than $1 million. However, in 2018, 93 per cent “of the inspected elevators maintained by this company in regions related to the prosecutions failed to pass inspection.” “Elevator maintenance companies are waiting until the inspector notes a problem and writes up the building owner before doing the required maintenance,” said Marcus Teyvaw, Certified Elevator Inspector, MHT Codes & Consulting Specialists. “Given that some elevator components must be serviced every five years, it could take five years before the TSSA notes the violation depending on the periodic inspection frequency.”

Detailed audit observations According to the Auditor’s report, most Ontario elevators and escalators are not in compliance with safety laws, and the situation is getting worse. Even though the TSSA has been conducting inspections to ensure that


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elevating devices are installed and maintained in accordance with safety laws, the TSSA does not have sufficient enforcement powers to effectively manage or regulate the large elevator maintenance companies, which “for years have not maintained most of Ontario’s operating elevators in accordance with safety laws.” While every province has different regulations, elevator maintenance must follow a formal maintenance schedule, which lists the dates and requirements for the required performance of minimum maintenance work and safety tests of critical mechanical elements to ensure their safe operation. An elevating device will fail the periodic inspection if it does not comply with applicable safety laws. If there is an immediate risk to public safety, the inspector can require the shutdown of that device. Ontario’s Auditor report found that, from May 2013 to April 2018, 82 per cent of elevators and escalators failed their inspection, an increase from 75 per cent in the previous period. The average number of non-compliances with safety laws nearly doubled (from 4 to 7 per inspection). The high inspection failure rate was tied to outstanding maintenance work and safety tests as required by the maintenance schedule. These results are not unique to Ontario – similar situations happen in every province across Canada.

Taking action So what can elevator owners – and owners and managers of rental properties – do to help make the situation better for themselves and their tenants? How can members of the rental housing industry ensure that their elevators function safely and are properly maintained? Consider the following strategies.

Choose reputable elevator maintenance companies. This sounds obvious, and to some, it also sounds impossible. Several large elevator maintenance companies dominate the industry in Ontario, and in all provinces. Some

18 | January 2019

of them are listed in the Auditor’s report as being primarily responsible for the sorry state of elevators. However, there are a dozen other companies with good reputations for providing quality service and support. “The key is to do your due diligence,” said Tevyaw. “Ask other building owners for recommendations, and ask the elevator maintenance company for referrals. Contact the Canadian Elevator Contractors Association, and ask them for recommendations. Do not go with the lowest price. The worst offenders among elevator maintenance companies will charge lower rates but also provide less regular maintenance, and will then charge more for ‘emergency’ repairs and service.”

Hire an elevator consultant As a building owner, you are legally responsible for the safety and operation of your elevators. That’s why you hire licensed elevator mechanics to service them. However, you’re not an expert, and you can’t know for sure what’s going on behind the closed doors of your elevators. That’s why it’s important to hire an elevator consultant. They can do a thorough examination of your elevators to help you determine what work is required, estimate what it would cost, and create a scope of work for your elevator maintenance company. The consultant can help with selecting the best elevator maintenance company, and can check on their progress. Once the project is complete, the consultant can confirm whether the work has been completed to specification by auditing the log books. Most importantly, the consultant works for you and will help to ensure that your elevators are properly serviced and are safe for use. “You can also ask the elevator consultant to teach you what you need to know about your elevators,” said Tevyaw. “They can instruct you on the basics, such as what is involved in regular maintenance, what to look for when a problem occurs, how to read an audit log book, and what questions to ask CONTINUED ON PAGE 22

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The Ontario Auditor’s report made the following observations, many of which are applicable to other provinces’ situations with their elevators.

1. There is an increase in the number of injuries due to unsafe elevators. From May 2013 to April 2018, there were 487 reported, elevator-related safety incidents in Ontario. These events caused three deaths, and eight permanent and 137 non-permanent injuries. Safety incidents have more than tripled in five years, from 37 in 2013/14 to 137 in 2017/18. The most frequent cause of injuries was the improper levelling of the elevator car with the floor.

2. Maintenance companies are the primary cause of worsening elevator safety.

In Ontario, four companies – ThyssenKrupp, Otis, Kone and Schindler – are responsible for maintaining 54.5 per cent of elevators and escalators. In May 2013, TSSA began charging owners extra fees for subsequent follow-up inspections of elevating devices, but discontinued the practice in April 2016 because it found that compliance with safety laws declined during this time, decreasing from 31 per cent to 23 per cent. Maintenance companies are the primary cause of poor compliance. They offer services at reduced rates, which creates incentives to minimize time and effort to maintain or fix elevators. Building owners cannot afford to litigate against large maintenance companies that do not perform required maintenance and safety tests on time, as it is difficult to switch providers due to strong contracts and the use of proprietary technology.

3. The TSSA has limited ability to compel

maintenance companies to do safety work on time. Legislation makes it difficult to issue orders directly to maintenance companies, as the ministry or independent regulator must perform a full investigation for identified safety problems to determine whether the owner or the maintenance company is responsible. Orders are often issued directly to elevator owners, who are “ultimately responsible and liable for the safe operation of

20 | January 2019

the elevating devices.” Neither the ministries nor the independent regulators will revoke a large maintenance company’s operating licence because it would prevent the company from working on any of its other elevators.

4. A large maintenance company was

prosecuted four times for repeatedly not doing required safety work on time.

This company was fined more than $1 million for non-compliance, which includes “failing to complete required maintenance work and safety tests.” On two separate occasions, a passenger was injured when an elevator malfunctioned. This company was prosecuted for repeatedly failing to perform the required safety tests on time. However, these prosecutions have not affected the large maintenance company, as about 91 per cent of elevators that it maintains “failed their TSSA inspection, mostly due to outstanding maintenance work and safety tests.” “Fines do not work,” said Tevyaw. “The state of affairs has not improved, and has continued to deteriorate. We need to find the right tools to ensure compliance.”

5. Elevators with the highest number of safety problems are serviced by the prosecuted large maintenance company.

According to TSSA inspection reports for 2016 and 2017, eight of the 10 elevators that failed to comply with the most safety laws were serviced by this elevator maintenance company. On average, these elevators failed to comply with 55 safety laws, whereas the average for other elevators is seven. Five of these elevators are located in a Toronto hospital. The findings also showed that it took five TSSA follow-up inspections over seven months for required maintenance work to be completed, and two elevators required more than 12 follow-up inspections over 25 months.





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when speaking with elevator maintenance contractors. Knowledge is key to ensuring that you get the service you require.” So, how do you hire an elevator consultant? The best place to start is to contact the International Association of Elevator Consultants. You can also ask other building owners for referrals.

Insist on performance-based contracts Many elevator maintenance companies employ what are essentially “oil and grease” contracts, which are technically illegal. The questionable contracts only cover the minimum that is required to maintain the elevator, and any repairs or “major” service will be charged extra as if that service is not part of the contract. By law, the elevator maintenance companies must use full maintenance contracts that cover regular monthly, quarterly and annual maintenance as stated in the maintenance schedule, the Elevator Code or by the original equipment manufacturer (OEM). As a building owner, you should insist on using a performance-based contract. This means that the elevator maintenance contractor must perform the duties as listed in the contract, and then show documentation that they did all the work listed in the contract before receiving payment for the service. Tie the service to the mandatory requirements in the TSSA’s document, Elevating Devices Code Adoption Document. “You can also include clauses tied to the TSSA inspection report, which deducts a certain percentage of the service rates based on the number of safety violations,” said Tevyaw. “This is another way that the elevator consultant can help with ensuring your service and maintenance contract is fair and you get what you are paying for.”

Lobby the Ministry and TSSA to make real change As a building owner, you are part of the rental housing industry, and have several local and regional landlord associations on your side.

22 | January 2019

These associations already have relationships with government officials, as well as experience with lobbying the government on behalf of members of the rental housing industry. “Building owners must work together to lobby the Ministry and the government to enable TSSA to achieve compliance,” said Tevyaw. “Building owners should lobby the TSSA to publish performance ratings of elevator maintenance companies and contractors so that building owners can make informed decisions about who they hire to service their elevators.”

Conclusion While the Auditor’s report pointed out issues with the TSSA and its powers, the Auditor also detailed serious problems in Ontario’s elevator industry, which are representative of Canada’s elevator industry as well. Elevator maintenance companies are ignoring the regulations that they helped to create, which means that elevators are breaking down more often, and causing serious injuries and deaths to their passengers. Building owners are paying more money for less service, and are being held hostage by the elevator maintenance companies. It’s long past time for building owners, and all members of the rental housing industry, to lobby the provincial governments to enforce elevator safety regulations and create better tools to compel elevator maintenance companies to do their jobs. Building owners must also take control of their own destinies to ensure that their elevators operate properly and safely.

By David Gargaro, in collaboration with Marcus Tevyaw

2018 A YEAR IN REVIEW FOR THE RENTAL HOUSING INDUSTRY The year 2018 will be remembered for many

reasons, mostly due to what has been happening south of the border. However, Canada’s rental housing industry faced many made-in-Canada changes, issues and challenges as well, some of which will have long-term repercussions. This article takes a look back at what happened in 2018, and what needs to be done going forward.

Impactful changes From a national perspective, the legalization of growing and using recreational cannabis had the most wide-ranging impact. Many rental properties already have rules in place regarding smoking tobacco. The new legislation requires multi-residential landlords and property managers to establish rules on whether tenants can smoke cannabis in their units, as well as whether they can cultivate that cannabis in their rented premises. “I don’t believe we’ve seen the end of the raft of operational challenges this will pose

24 | January 2019

to our industry, both at the building level and the volume of applications the LTB will be receiving in complaints,” said Randy Daiter, Vice President, Residential Properties, M&R Holdings. The election of Doug Ford as Premier of Ontario, and the installation of a Progressive Conservative government after 15 years of Liberal governments, is the biggest change for that province. This will affect many issues going forward, including rental housing. For example, the previous government removed the post-November 1991 exemption from rent control legislation, which interrupted the


momentum of developing purpose-built rental buildings. However, the new government announced a rent control exemption for rental units first occupied after November 2018. Prior to the election, Ontario’s Liberal government introduced a standard form of lease, which clearly outlines landlord and tenant obligations. However, it does not address all necessary and important items. As a result, landlords are well advised to add their own additional terms to the tenancy agreement. That created a make-work project when implemented and had to be integrated into existing automated processes and related management information systems. British Columbia’s NDP government reduced the guideline rent increase from BC’s Consumer Price Index (CPI) plus 2 per cent to the CPI only. This is expected to keep vacancy rates depressed in Vancouver and Victoria, as tenants will not feel as pressured to be economical in their rental housing demand. This decrease in revenue growth will likely also reduce the level of maintenance and upgrades that landlords perform on existing rental properties. “Housing availability and affordability in Greater Toronto and Greater Vancouver came under greater scrutiny as population growth and the increasing challenge for many to achieve home ownership put upward pressure on rents,” said Tony Irwin, President and CEO, Federation of Rental-housing Providers of Ontario (FRPO). “All of that created uncertainty for rental housing providers and investors.” Other provinces have not seen political changes similar to those that have occurred in BC and Ontario. However, many provincial economies have fluctuated with global demand and the issues in the resource and manufacturing sectors.

Construction and affordability incentive programs To help support the federal government’s National Housing Strategy, the Canada Mortgage and Housing Corporation (CMHC) launched the Rental Construction Financing initiative (RCFi). It provides low-cost loans for the purpose of encouraging the construction of rental housing across Canada. RCFi focuses on standard apartment projects in Canada with general occupants, and supports sustainable apartment projects in areas that have a need for new rental supply. The initiative is open from 2017 to 2021, and will provide up to $3.75 billion in loans. RCFi provides loans with a 10-year term and a fixed interest rate that is locked in at first advance for certainty during the most risky periods of development, with an amortization period of up to 50 years. CMHC mortgage loan insurance is effective from first draw and for the entire amortization period. Depending on the strength of the application, the loan offers up to 100 per cent loan to cost for residential space and up to 75 per cent loan to cost for non-residential space. Interest-only payments are financed by the loan during construction through to occupancy permit; principal and interest payments are due after 12 months of stabilized effective gross income. “The below market interest rate, the ability to use RCFi funding as construction financing, and the modest demands for improved affordability make the program a viable option for some for-profit developers,” said John Dickie, President, Canadian Federation of Apartment Associations (CFAA). The federal government also launched the National Housing Co-Investment Fund (NHCF). It will provide low-cost loans and financial contributions to support and develop mixedincome, mixed-tenure, mixed-use affordable

rentalhousingbusiness.ca | 25

Rental Housing Lifetime Achievement Recipient Eugen Drewlo Drewlo Holdings

Outstanding Community Service Award Sifton Properties

Best Property Management Website Quadreal Property Group www.quadrealres.com

Marvin Sadowski Memorial Award for Certified Rental Building Member of the Year Greenwin Inc.

Advertising Excellence Single Campaign Vertica Resident Services The Livmore

Best Lobby Renovation of the Year CAPREIT 18 Panorama Court, Toronto

FRPO congratulates the winners of the 2018 MAC Awards On November 29, 2018 FRPO held its 18th annual awards gala in Toronto, at the Metro Toronto Convention Centre in conjunction with the PM Expo. FRPO’s MAC (Marketing, Achievement and Construction) Awards recognize success and quality in Ontario’s rental housing sector. FRPO’s MAC Awards gala continues to grow each year, with record attendance of over 1000 guests. Thank you to all of our guests, FRPO members and congratulations to the 2018 MAC Awards winners and nominees.

Best Curb Appeal

Advertising Excellence Social Media Starlight Investments 77 Parkwoods Village Dr., Toronto Greenwin Inc.

26 | January 2019

Congratulations 2018 Winners

Resident Manager of the Year SaďŹƒa Hassin Dewan Metcap Living

Leasing Professional of the Year Roomana Nazli Morguard

Best Suite Renovation Under $15,000 Briarlane Property Management 265 Dixon Road, Toronto

Best Suite Renovation Over $15,000 Timbercreek Communities 165 Bathurst Street, Toronto

Rental Development of the Year Medallion Corporation Primo Tower, 2 Vena Way, Toronto

Environmental Excellence Award Skyline Living

Property Manager of the Year Nina Rastegorac MetCap Living

Amenities Award of Excellence Shiplake Properties 99 Davisville Avenue & 118 Balliol Street, Toronto

Customer Service Award of Excellence CAPREIT

rentalhousingbusiness.ca | 27

“The cost of real estate continues to rise, which makes it difficult to justify acquisitions, especially in light of the fact that the real estate is aging and requires substantial capital investment,” said Paul Sander, Director, Hollyburn Properties.

housing, which must be energy efficient, accessible and socially inclusive. The Housing Construction Stream will cater to new construction and provide up to $5.19 billion in loans and $2.26 billion in capital contributions toward the development of 60,000 new units. The Housing Repair and Renewal Stream will cater to the repair and renewal of the existing community and affordable housing supply, providing $3.46 billion in loans and $2.26 billion in capital contributions. While the NHCF programs provide a belowmarket interest rate, there is concern that they require rental providers to provide an unrealistic level of affordability. The Housing Repair and Renewal Stream also makes the cost of providing accessibility for many units on a retrofit basis another barrier. While accessibility is less costly to provide in new construction, the affordability requirements are difficult to attain in private projects, as the higher rents for new rental units are what make new private rental construction viable. Rental providers are also required to reduce greenhouse gas (GHG) emissions. Achieving such reduction in Manitoba, BC and Quebec is difficult because much of their electricity is hydro generated, which produces few GHG emissions. “Without exception, for-profit rental housing providers tell me that the NHCF program is very far from the balance of benefits and costs which would make it worthwhile for them to consider,” said Dickie. “CFAA and rental providers are hoping for program improvements so that for-profit rental

28 | January 2019

providers can realistically gain support to create mixed income communities, which serve vulnerable populations as well as middle-income Canadians who choose to rent.”

Lingering issues One key challenge on the national level is that it is still prohibitively expensive to develop new rental housing. While all levels of government state that they want to make housing more affordable, they continue to maintain and impose significant development charges on new housing, as well as excessive parking and other requirements and the GST/HST. Public objections and planning processes also tend to cause years of delay and uncertainty in many cities across Canada. “The cost of real estate continues to rise, which makes it difficult to justify acquisitions, especially in light of the fact that the real estate is aging and requires substantial capital investment,” said Paul Sander, Director, Hollyburn Properties. Ontario’s Auditor General published a report on issues within the Technical Standards and Safety Authority (TSSA), and how it has failed to properly monitor and deal with elevator maintenance companies. This has created significant problems within the elevator industry, as elevators are malfunctioning and failing safety standards at an increasing rate. While the report focuses on Ontario, the problem is national in scope, as it is a snapshot of the issues with elevators across

Canada. Unless something is done about it soon, the problem will get significantly worse before it gets better. “For many years, rental housing providers have had trouble obtaining timely and efficient elevator maintenance and repair services,” said Irwin. “The situation seemed to reach a crisis point in 2017 and 2018 after the government allowed the College of Trades to restrict entry into the elevator technician field, resulting in shortages of technicians. This was exacerbated when the government implemented new legal requirements for timely service. There is clearly a need for more elevator technicians, which hopefully will be addressed in 2019.”

2018. Delays from application to hearing of 25 days had been the norm. However, as the year went on, the average hearing delay crept up, closing in on 40 days. The situation was compounded by LTB appointments not being renewed in a timely manner and is a concern both for landlords and for tenants. “We continue to see a trend of worsening wait times before landlords and tenants are able to have a hearing at the Landlord and Tenant Board,” said Daiter. “There is a burning need for an overhaul of the process for all key stakeholders in order to best, and most fairly, serve landlords and tenants alike.”

By David Gargaro, in collaboration with Randy Daiter, John Dickie, Tony Irwin and Paul Sander

In Ontario, the delays at the Landlord and Tenant Board began to get worse early in

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2018: The year of the data breach Cyber security was a huge issue in 2018, and it will become more prevalent in years to come. The news has been filled with stories of large companies experiencing data and security breaches. However, small and medium-sized enterprises (SMEs) – which include members of the rental housing industry – are at even greater risk of data breaches due to smaller security budgets, the lack of a cohesive Internet security strategy, poor decisionmaking and human error. If your business has yet to experience a security or data breach, then it’s only a matter of time.

Real cyber security events Many large organizations – and millions of their clients – have been affected by data breaches and cyber security attacks. One of the largest and most prominent incidents involved a security breach with Facebook, which resulted in exposing 50 million user accounts that would enable hackers to take over those accounts and enable access to the users’ private information. Hundreds of clients of DoorDash, a food delivery startup, had their accounts hacked into, and email addresses changed, through a credential stuffing attack. In late 2017, Equifax Inc. revealed a major data breach that had occurred through a cyber attack, which affected about 19,000 Canadian clients. Even the government has had its internet security breached. On April 30, the Town of Wasaga Beach had all of its data locked as part of a ransomware attack. Hackers used malicious software to block users from using computers and accessing vital services until the government paid a ransom. To release the 11 servers, the hackers initially demanded 11 Bitcoins, worth about $144,000 at

32 | January 2019

the time; that was eventually negotiated down to three Bitcoins, or $35,000. “2019 is already on track to see more breaches,” said Suheyl Khaki, Consultant, Data First Solutions. “With recent breaches focusing on small to medium-sized businesses, security is more important than ever.” Small and medium-sized businesses are not immune from security and data breaches – in fact, they might be at even greater risk than their larger counterparts. The Canadian Internet Registration Authority (CIRA) conducted a survey in 2018, which found that 10 per cent of small businesses have had their website brought down by an attack within the past 24 months, and 22 per cent of larger firms experienced a distributed denial of service (DDOS) attack in the past 12 months. According to a 2018 report by Verizon, small and medium-sized enterprises (SMEs) make up 58 per cent of cyber-attack victims.

Why are SMEs at risk? While most cyber security threats originate from outside the organization, many issues stem from internal vulnerabilities, and the actions of employees, management and owners. Hackers and viruses can access internal computer systems and client data because there are gaps in security. Some people continue to use default passwords or use passwords that are easy to guess or, worse yet, no passwords at all. Others fail to update software when needed, which leaves vulnerabilities in place. Many data breaches occur through human error, such as throwing sensitive information into the garbage can, or writing passwords on sticky notes for anyone to find. “While having a team of IT professionals standing

guard over every piece of micro-data is the dream, it’s not realistic,” said Khaki. “Even large corporations rely on their employees to take small, routine actions to protect against cyber-attacks” Another common problem is using outdated or inexpensive equipment. In 2018, it was discovered that there was a software flaw in some Cisco routers. This made the systems vulnerable to cyber attacks on a very large scale. Cisco RV routers are mostly commonly used by SMEs. Many business owners don’t know about such problems, or fail to replace the equipment (or update the software) to close these vulnerabilities. “Many companies are in a rush to reduce their costs, use more cloud-based services, implement the Internet of Things, and connect their sites to their businesses, and they do so without engaging a knowledgeable and reputable company to make their systems all work together in a secure way,” said Khaki. “Many small companies go to Best Buy, Staples or the kid next door to add new upgrades to their networks. That is not to say these folks don’t know what they are doing. However, to make

“2019 is already on track to see more breaches.” your systems more secure, it makes sense to work with a company that does this on both a large and small scale.”

Conclusion While large firms can usually withstand the consequences of data breaches, a serious breach can be devastating for SMEs and their clients. A security breach can interrupt business services and shut down your business for days or weeks. Financial losses can occur through lost sales or by being forced to pay a ransom, or from lawsuits from victimized clients. Your business’s reputation can be destroyed, and you are certain to face customer anger, as well as lost confidence in your ability to protect your clients’ data. By David Gargaro, in collaboration with Data First Solutions

rentalhousingbusiness.ca | 33

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HOW BASEBOARD HEATER CONTROLS CAN HELP YOU SAVE: • By reducing baseboard operating hours, controls can save between 15–25% on your annual heating costs • Adapt to outside weather and in-suite conditions while maintaining tenant comfort • Typical simple project payback of between two to four years

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JAN-FEB 2019

CFAA is Growing – to Serve You Better By John Dickie, CFAA President For 2019, CFAA is adding new member services and more (and upgraded) government relations work. Our goal is to gain more for for-profit rental housing providers from the National Housing Strategy and its programs, and on tax issues. We are reaching out to ask rental housing providers to join CFAA as direct members, as well as through the regional apartment associations, and many landlords have answered CFAA’s call. The new funding will pay for the expanded government relations work, while the services should be largely self-funding. Expanded Political Action Over the last two years, CFAA played a major role in shaping the ten year National Housing Strategy (NHS), achieving access for private rental providers to substantial potential funding. The total amount of NHS spending open to for-profit rental providers is to be $22 billion, or close to $6,000 per rental unit in Canada on average. CFAA is working hard to make sure private landlords can get their share of that money, and that it is applied in a way which supports the rental housing industry across Canada. In order to get the most benefit from the federal government’s funding commitments for rental housing, the CFAA Board of Directors has engaged 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, including housing and tax issues. Robert McCreight of Capital Hill Group has been hard at work for

Robert McCreight, Capital Hill Group

CFAA since December, 2018. He has been extremely valuable in gathering information and opening doors for CFAA, and in helping to hone CFAA’s messaging to enable us to get the best reception from CMHC and the government. See page 40 for a report on some of CFAA’s current work on the NHS funding. New Member Services CFAA’s new membership services aim to bring more value to your company and your employees. See Table 1 for the services members receive, and Table 2 for the additional, new benefits for direct landlord members. CFAA has entered into an agreement with the U. S. National Apartment Association, to obtain better access for Canada’s apartment industry to NAA’s main apartment conference, Apartmentalize, and to NAA’s education programs through its website Visto. Apartmentalize is being held in Denver this year, from June 26 to 28. CFAA direct members will receive their membership number automatically, along with instructions on how to

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NATIONAL OUTLOOK access the NAA resources. To find out how to access those resources as a landlord member of a member association, email admin@cfaa-fcapi.org. The annual direct membership dues for rental housing providers is $100 plus 50 cents per rental unit. For a landlord with 400 rental units, the fee is $300, plus HST. For a landlord with 1,000 units, the fee is $600, plus HST. Table 1: Benefits for Affiliate Members (members of CFAA member associations) • be represented by their member association on the CFAA Board • provide input to CFAA through their associations about CFAA goals • receive communications from CFAA through their member association • be eligible to enter CFAA’s Awards Program • receive discounts to attend the NAA rental housing conference, Apartmentalize • receive access to the NAA education programs, through Visto

CFAA-RHC 2019: Working Together To Help You Succeed By Jeremy Newman, Canadian Federation of Apartment Associations CFAA will be hosting Rental Housing Conference 2019 from May 13 to 15, 2019, at the Hyatt Regency hotel in downtown Toronto. Monday, May 13, will feature the Building Innovations Bus Tour, and Tuesday and Wednesday, May 14 and 15, will be filled with education sessions from a variety of industry leaders and outside experts, as well as CFAA’s Suppliers Council Showcase. On Tuesday, May 14, CFAA will host the 4th annual CFAA Rental Housing Awards Dinner. For more information about the CFAA Awards Program, see page 39.

Table 2: ADDITIONAL Benefits for CFAA Direct Landlord Members • elect representation directly onto the CFAA Board • provide input directly on CFAA goals • receive every-issue delivery of RHB Magazine • receive bulletins about federal subsidy programs and tax changes, sent directly to you between RHB issues • receive access to additional helpful webinars • receive information directly about the CFAA Conference and Awards program

To apply to join CFAA as a direct member, email admin@cfaa-fcapi.org, and CFAA will send you the application form.

CFAA President John Dickie with CMHC Board Chair, Derek Ballantyne at CFAA-RHC 2018

CFAA Rental Housing Conference 2019 will exemplify the ideals of cooperation, partnership and integration, reflecting this year’s theme, “Working Together to Help You Succeed”. By working as a unified sector and with allies, the rental housing sector is better able to succeed by sharing expertise, innovation and support, and by speaking with a unified voice to improve how government treats the rental housing

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

JANUARY - FEBRUARY 2019 sector. CFAA is making strides towards uniting the rental housing industry through the new partnership with NAA, the Unified Housing Policy, and the expanded CFAA direct membership program. Conference Topics and Streams Through talks, panel discussions and keynote presentations, everyone will benefit from the expertise of those who have excelled in their fields. CFAA-RHC 2019 will offer sessions in the following streams: The technology stream will consist of topics such as artificial intelligence, managing data for decision making, and the Internet of Things. The tenant relations stream will explore topics geared towards making your tenants satisfied, and even delighted, such as serving the tenant of today, and building rental communities. The rental development stream will cover topics pertaining to future development projects, such as Sidewalk Toronto, and the Riocan residential and apartment developments across Canada, as well as best practices in planning approvals, and how and why existing rental owners benefit from encouraging new rental development. The rental markets stream will feature topics that showcase various rental markets, both nationally and abroad, such as an international market report, a US market report and rental market trends across Canada.

Geoff Younghusband, Darren Henry and Peter Altobelli with moderator Jeremy Jackson

“The CFAA annual conference brings multi-residential professionals together by offering a collection of innovative panels and learning sessions that fosters relevant and meaningful conversation. Conducive to networking and by learning from industry experts, the conference provides an excellent opportunity to strengthen industry knowledge and community partnerships.� said Brandi McIlvenny, Director, Residential Rentals, Sifton Properties Limited Whether you are a rental housing provider or a rental housing supplier, there will be great information, ideas and contacts for you at CFAA Rental Housing Conference 2019. Come meet with other engaged individuals in the rental housing industry, exchange ideas, make contacts, and see how we benefit from working together to enhance success.

The human resources stream will cover topics that relate to the working environment of your employees, such as Steps to Success and an employment law update. The marketing stream will explore topics such as new trends in marketing, new digital trends and revenue management. The leadership stream will feature sessions such as the Operations Roundtable, a Real Estate Associations Roundtable, and a panel on how best to influence government. In addition, CFAA-RHC 2019 will feature a session on energy retrofits and incentives, and engaging keynote speakers, such as Benjamin Tal, and Murtaza Haider and Stephen Moranis, of the Haider-Moranis Bulletin.

38 | January 2019

Ramona Maraj, a conference attendee and Max Steinman

To purchase your ticket for CFAA-RHC 2019, please visit www.CFAA-RHC.ca. Act soon to get your tickets at early bird pricing!

NATIONAL OUTLOOK CFAA Awards Program 2019 launches with new features The Canadian Federation of Apartment Associations successfully launched the first and only national rental housing awards program in Canada in 2016. The program was very well received. Since 2016, the number of entries has grown substantially each year. Now, CFAA is proud to announce that the 4th annual Rental Housing Awards Program is open for applications. Awards finalists and winners will be announced at the CFAA Awards Dinner on May 14, 2019, which is part of the CFAA Rental Housing Conference 2019.

CFAA Suppliers Council members can apply for these awards: FOR RENTAL HOUSING SUPPLIERS • New Product or Service of the Year • CFAA Suppliers Council Member of the Year (NEW) CFAA member associations can apply for this award: FOR APARTMENT ASSOCIATIONS • Association Achievement of the Year

New features of the Awards Program After consulting with CFAA’s members, previous awards entrants, and past awards judges, CFAA has made a number of improvements to the Awards Program. The key changes are: • Expanding and simplifying eligibility to enter, to create a program that is both easier to understand and more inclusive for CFAA members. • Creating a new application system to streamline the application and judging processes, as well as to level the playing field by reducing the advantages of visual flare in the look of entries. • Adding new awards to fill gaps in key program areas of rental housing performance.

Awards and New Awards In all, CFAA is now offering at least 10 awards categories. Direct landlord members and affiliate members (landlord members of one of CFAA’s 11 member associations) are invited to apply for these awards: FOR RENTAL HOUSING PROVIDERS • Property Manager of the Year • Off-Site Employee of the Year • On-Site Employee of the Year • Rental Housing Provider of the Year (NEW) • Marketing Program Excellence of the Year (NEW) • Renovation of the Year • Rental Development of the Year

Reed Kipp, Dave Craig, Caroline Armstrong and Alex Creighton

As in previous years, CFAA reserves the right to split categories in order to award more specific awards. For example, a superintendent entered in “On-site Employee of the Year” might be judged against other resident managers, and be awarded “Resident Manager of the Year”, while a repair technician is judged against other repair technicians and wins “Onsite Employee of the Year”. “Rental Development of the Year” might be split into two awards, “High-rise Rental Development of the Year” and “Low-rise Rental Development of the Year”. To find out more about membership in CFAA, or one of our member associations, please email admin@ cfaa-fcapi.org.

Call for Judges and Sponsors CFAA’s Awards Program relies on volunteer judges and sponsors to help keep our program open and free of application fees. Please consider volunteering your time, or sponsoring components of the awards program. Help CFAA celebrate excellence in our industry! To learn how to enter, judge or sponsor, please email awards@cfaa-fcapi.org.

rentalhousingbusiness.ca | 39

JANUARY - FEBRUARY 2019 NHCF Repair incentive program updates By John Dickie, CFAA President Within the ten year National Housing Strategy, the National Housing Co-Investment Fund is making available $5.7 billion in financial assistance for repairs and retrofits of existing affordable housing, including for-profit rental housing. To obtain low-interest loans or outright CMHC contributions, rental housing providers need to do work to address urgent repair needs, or to provide increased energy efficiency and accessibility, while guaranteeing affordability on 30% of the rental units within the project.

New urgent repair category Under the newly announced urgent repair category, the loan can be made available for urgent repairs that are needed to maintain the safety of occupants or the viability of housing. While energy efficiency and accessibility are still goals, CMHC will provide some “flexibility” about the requirements for those goals. The stated affordability commitment will still be required. For urgent repairs that are needed to maintain the safety of occupants or the viability of housing, CMHC will provide some “flexibility” about the requirements for energy efficiency and accessibility. Examples of urgent repairs are repairs to fire safety systems, leaking building envelopes, faulty balcony railings or slabs, faulty electrical, heating or water systems, or elevator repairs. Building system replacements can also qualify if they are necessary. Details of the urgent repair stream are still being worked out. CFAA welcomes the urgent repair stream. With the addition of the “urgency element”, the repair work which can receive low-interest loans is reminiscent of Rental RRAP, a very successful repair incentive program which operated for decades until 2003. We look forward to continuing conversations with CMHC to help make the urgent repair stream effective for the target repairs and the program goals.

Repair and Renewal Stream Before the urgent repair category was announced, numerous CFAA members told us that they find the Repair and Renewal Stream too complex, and that it

40 | January 2019

provides insufficient incentives to justify the program requirements. While the energy requirements are workable for some rental providers, the accessibility and affordability requirements appear to be beyond what the incentives financially justify for almost all private landlords. It is true that the incentives work better if they are stacked with incentives from a province, a municipality or another funding source. That is in large part a matter of program design. The broad program is called a “Coinvestment Fund” for a reason. However, some aspects of the Repair and Renewal Stream are being reviewed. With the assistance of CFAA’s new government relations consultant, we have discussed a wide range of program issues with CMHC. Here are some of the areas on which CMHC and the government are making changes or providing flexibility: • Program complexity • The type of work to be performed • The level of accessibility provided • The timing of renovations for accessibility • The location of accessible units • Portfolio applications Program complexity The main incentive is a low-interest loan for most of the cost of the repair or retrofit work for two terms totalling 20 years. Most for-profit rental providers should expect that to be the main incentive they receive. CMHC realizes it needs to make the terms of the loan clearer. In addition, two groups of applicants can receive contributions (grants). One group is applicants who exceed program requirements. Examples would be providing deeper energy retrofits than are required, or deeper or broader affordability guarantees. Another group is non-profit providers who are not financially viable without some contributions. Realistically, only the deeper energy retrofit work might serve for-profit rental providers. The two ways to gain contributions confuse matters, but CMHC is looking at how to make those conditions easier to understand and apply. The type of work to be performed Before energy retrofits can be performed, it is sometimes necessary to perform “enabling work”. For example, to replace windows it may be necessary to replace window frames, and to do that it may be necessary to point or repair brick. CMHC will accept a reasonable amount of enabling work as part of the project costs.

NATIONAL OUTLOOK Accessibility requirements The program documentation appears to demand that 20% of units in a project be made fully accessible. However, on a case-by-case basis, lesser work may be accepted. For example, making a bathroom work for a walker might suffice, rather than needing to make the bathroom work for a wheelchair. CMHC has also indicated that it will be flexible as to the location of the accessible units. For example, the units can be created through in-fill, or they can be concentrated in one of several buildings. CFAA would like CMHC to accept a plan which would see accessibility retrofits done when tenants need them over the term of the loan, rather than all at once at the beginning of the loan period. Delaying that work could be advantageous, while still meeting specific needs. Portfolio applications To reduce paper burden, and to allow flexibility as to which specific buildings receive more or less work of a

certain type, CMHC allows “portfolio applications�. In other words, an owner (or potentially a fee manager) can put forward several buildings and achieve the program requirements on average across the portfolio. One building might produce more energy or GHG savings, a second building might be the location of more accessible units, and a third building might provide more of the affordable units.

Conclusion The various flexibilities are welcome, although the main program requirements are still onerous and complex. CFAA will continue to seek program revisions to make the Repair and Renewal Stream more attractive for CFAA members. To meet its target for the number of units to be renewed, the government needs take-up from the private sector. CFAA is letting CMHC know the key impediments to that private sector take-up, and encouraging program revisions so that a program take-up will occur, to the benefit of the government, the rental housing industry, tenants and the community at large.

CFAA Rental Housing Compensation Survey 2019-2020 The only Canadian survey of rental housing employee compensation and benefits. Find out market compensation for all key positions in the sector, at the city or provincial level. Participate to receive discounted rates to purchase the survey. Email admin@cfaafcapi.org. Visit www.cfaa-fcapi.org for more information.

rentalhousingbusiness.ca | 41

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

Hot Topics: HDAA discusses the debate over the rental licencing pilot project, as well as the results of the January dinner meeting. pg. 45 LPMA talks about how the shortage of LTB adjudicators has threatened landlords’ livelihoods. pg. 49 WRAMA discusses its presentation before Waterloo Regional Council, as well as the implications of tax season. pg. 53 EOLO talks about the new City of Ottawa plan to pay for damage to Housing First units, and the review of the ten year Housing and Homelessness Plan. pg. 57

The Member Associations


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44 | January 2019

President’s message Happy New Year! HDAA is working hard on events and education to help make 2019 a great year for our members. Along with our continued fight against licencing, we are also making a few recommendations to the Ontario government’s development of a housing supply action plan. Our core priorities are to promote ways to create positive climates for both new supply and existing stock. HDAA suggests that new supply can be achieved by: • Maintaining vacancy decontrol • Adjusting the annual rent increase guideline to reflect the costs associated with building operation • Reducing the burden of HST • Supporting housing benefit programs • Eliminating inclusionary zoning • Reducing red tape on new developments and municipal hurdles that prevent the increase of supply HDAA also suggests we can create a positive climate for existing stock by: adjusting the multi-residential tax rate to be in line with the residential tax rate, improving the ability to enforce evictions, increasing the staffing at LTB, streamlining the Landlord and Tenant Board Process, banning cannabis cultivation in rental units, allowing sub-metering of electrically heated buildings to align with other sources of heat, and ensuring that government-funded legal clinics are not supporting illegal activities or rent strikes. - Arun Pathak, President

Licencing On September 27, the Rental Housing SubCommittee voted 7-4 to recommend a trial two-year licencing program in Wards 1 & 8. On December 11, 2018, the City’s Planning Committee listened to the community and industry professionals regarding issues with the rental licencing motion. There were 18 delegates that spoke from the heart and explained that while they wanted to provide

housing, the additional charges associated with this program would make it difficult to run their business. Many felt that the only option for HDAA Member Robert Flis talking about the close them, as smaller relationship he has with his student rentals. housing providers, would be to shut down their rentals. Others spoke about how they will be forced to raise rents to compensate for the additional cost being forced on them, adding again to the affordable housing issues in Hamilton. One delegate felt unfairly targeted for having housing in a student ward and that the rental licencing pilot project does not outline concrete measures of success with targets. Many of the delegates voiced that implementing another layer of red tape to the process could deter citizens from establishing a secondary unit within their primary property. It was also pointed out that since zoning is still being figured out, making a decision on licencing now would be the equivalent of putting the cart before the horse. There were a few heated moments while the delegates discussed their positions. It was apparent that a few of the councillors had a biased opinion of the industry as a whole, stating, “If we wait for [the rental housing] industry to comply we will wait forever.” The councillor said they didn’t want to compare the entire private rental housing industry to the oil and tobacco industry, but they still did. The comparison was made to prove that housing providers don’t care to improve their tenants’ welfare any more than the oil industry cares about the environment or the tobacco industry cares about people’s health. The statement clearly promotes the idea that the housing industry is comprised of people who have no moral compass. This is part of the problem.

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A leader of a community should be working to bring people together, not encouraging the vilification of an entire industry. The group that the City is looking at licencing, these “villains of big business,” are local teachers, construction workers, doctors, sales reps and other small business owners who have purchased a rental to supplement their income or pay for their own mortgage. They are not faceless. They are not evil. They are just fellow Hamiltonians who are trying to provide for their families too. HDAA Board member Lucie Brusse begged the When a councillor dehumanizes Planning committee to reconsider the implementation of a licencing program. an entire industry, it encourages conflict and does nothing to help opposing sides see each other as humans. The good news is that there were changes to the motion before it was passed. The updated motion has included asking City staff to draft a comprehensive plan/proposal for a rental licencing pilot project that includes: • Education for tenants and landlords • Concrete metrics for success • An analysis of staffing levels • An analysis of the financial offsets for the project • A review of the affordable housing and potential • Displacement issues of such a project

January dinner meeting Arun Pathak reviewed the CMHC Rental Market report for the Hamilton CMA. The overall vacancy rate increased to 3.1%, but remained below the ten-year average for Hamilton. Rental supply increased more than demand. Factors contributing to greater rental demand were fewer renters transitioning into home ownership, higher immigration and a greater number of student renters. Rent growth was strong, as renters had few alternatives to choose from. Danny Iannuzziello and Cliff Ford from Skyview Realty did a fantastic presentation on some key trends and insights of the Multi-Unit Residential Market in Hamilton. They talked about how Toronto rents are expected to increase by 11% in 2019. They compared

46 | January 2019

Dinner meeting

Hamilton and downtown Toronto in terms of what you can expect for $1,900 in rent. They believe Hamilton is a great secondary market because of its proximity to the GTA, its lower Danny Iannuzziello Skyview Realty

property prices and rising rental rates. They suggest the future trend will be a continued expansion out from the GTA.

Some of the factors for growth in Hamilton’s rental market that have caused the increase in applications from GTA commuters are: • Continued rise in immigrants and international students • Transportation improvements • Education emphasis • Health care reputation • Employment opportunities • The Hamilton culture appeal

They discussed the changes in the types of tenants, and how the ‘renter’ stigma is disappearing with the Millennial mindset (Transient Nature, Now vs. Future). Because ownership costs continue to outpace rental costs, people are renting longer, creating bidding wars on rentals and causing rental rates to rise 4% (2017 to 2018). Today’s tenants are knowledgeable about their rights and are willing to exercise them. They want to be accepted over other applicants and have gone so far as to create tenants’ resumes to add to the rental applications. Overall, they believe the Ontario rental market remains strong and competitive and Hamilton is well poised for continued rental market growth. They believe building values will continue to rise due to continued buyer demand and growth opportunities.

rentalhousingbusiness.ca | 47

Comfy living for tenants. Comfy energy bills for you. We’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.

President’s message – Ushering in positive housing reforms in 2019 It’s safe to say that 2018 was quite a year for the rental housing industry. We saw some positive changes with the Ford government’s removal of rent control for new units. However, one area of concern centres on the excessively long wait times for hearings at the Landlord and Tenant Board. Wait times have lengthened from 25 business days to 10 weeks and, as a result, small landlords are having trouble paying their mortgages. Last fall, the government announced consultations into topics such as barriers to new housing supply and ways of increasing the Board’s efficiency. In response, the presidents of provincial landlord associations, including LPMA, banded together and are working on submissions. The government set a deadline of January 25. We also hope the government will continue to help with affordable housing as more tent cities for the homeless pop up across Ontario. - Lisa Smith, President

Landlords’ livelihoods threatened by shortage of LTB adjudicators Landlord advocates are sounding the alarm about excessively long wait times for eviction hearings at the Landlord and Tenant Board. The Board’s wait times of 25 business days have doubled and, as a result, many landlords are teetering on the edge of financial disaster while the tenants they’re trying to evict live rent-free. The problem centres on a shortage of adjudicators needed to conduct hearings and clear the backlog of cases waiting to be heard. “They (landlords) will lose their property,” said London lawyer Joe Hoffer. “It’s really the backlog that creates the risk for landlords. That backlog is completely artificial.” The current wait time for a hearing before the Board is 10 weeks for all application types, said Vanessa Campbell, communications advisor for Social Justice Tribunals Ontario (SJTO). The SJTO is comprised of eight tribunals, including the Landlord and Tenant Board.

In the annual SJTO 20172018 report, published last October, Michael Gottheil, outgoing executive chair, stated that the provincial election “worsened the situation Joe Hoffer by delaying appointments or limiting appointment extensions to six months. As a result, several of our experienced adjudicators left before their final term expired for other opportunities, and several vacancies have yet to be filled.” In 2017-2018, the Board received 80,791 applications, which includes landlord, tenant and co-op applications. Of those, 59 per cent were to terminate a tenancy and evict due to non-payment of rent. Historically, the Board has managed its workload with 45 full-time and eight to 10 part-time adjudicators, who are appointed by the Lieutenant Governor on the recommendation of the Attorney General, Campbell said. However, as of January 1, 2019, that number has fallen to 33 full-time and four part-time adjudicators. The Board is hoping to have new adjudicators in place early in the new year. However, Hoffer said there was no guarantee that qualified people would be appointed and it could be months before the actual appointments start to flow. Landlords who want to evict tenants must give them a Notice of Termination. That can be done as early as the day after they fail to pay the rent on time. Once the required 14-day notice period has passed, landlords can then file an application with the Board seeking a judgment for tenants’ rent arrears, with eviction as the consequence of continued failure to pay. Staff at the Board office then process the applications and assign hearing dates.

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Tenants currently often owe three or four months of rent arrears before landlords even have a first appearance at the Board, Hoffer said, instead of two months at most previously. There are also options for tenants to seek adjournments and delay the matter further. “Before you know it, you can be easily into five or six months of lost rent. For landlords, that has an immediate impact,” he said. Daryl Chong, President of the Greater Toronto Apartment Association (GTAA), said the eviction process needs to be more efficient. “A responsible landlord acting professionally still encounters a four- or five-month process to evict a tenant who is in arrears.” Under previous legislation, for applications based on rent arrears, a default eviction order was issued unless the tenant filed a defence within five days of service of the initial application. “Reinstating the default process would streamline the process and reduce the overhead costs of the LTB,” Chong noted. Tony Irwin, President of the Federation of Rental-housing Providers of Ontario (FRPO), said the organization communicated its concerns to the provincial housing minister in September and is working behind the scenes on behalf of Tony Irwin the rental-housing industry. It’s beneficial to landlords and tenants to have their matters resolved more quickly while ensuring that tenants can present their case and argue their position. “But, at the same time, when you’re starting to see a system where it takes five or six months to have a matter such as non-payment of rent resolved, I don’t think that’s in anyone’s interest,” Irwin said. FRPO published a report in 2011 titled Justice Denied: Ontario’s Broken Rent Dispute Process. The report showed that most provinces had more efficient processes and didn’t take as long to schedule hearings as Ontario. In other provinces, such as New Brunswick, no hearings were held for nonpayment of rent. Many tenants don’t appear at their hearing, which wastes time and staff resources, Irwin said. Unless tenants intend to appear, there is no sensible reason to schedule a hearing. “Like everything, it’s finding the right balance between both the tenant and landlord. But based on our report in 2011, and what we’re seeing now, the balance is way out of whack and we need to look at what’s been going on,” Irwin noted. All tenants suffer as well because the costs incurred by non-paying tenants are passed to all of the other tenants through higher rents.

50 | January 2019

Ontario could look at other jurisdictions and determine how to resolve issues more quickly and minimize costs and stress, “which are made far worse by the length of time it takes to resolve these matters,” Irwin said. The statutory timelines, such as the 14-day notice period, could also be shortened to smooth the process. Hoffer pointed to an eviction application he filed in mid-December, 2018 on behalf of a landlord to recover $950 rent payable for each of November and December, which constitutes arrears of $1,900. Due to a shortage of Board members to process applications, a hearing was scheduled for March. If the tenant continues to avoid paying rent, the landlord will be owed $4,750 by the hearing date, including the rent for January, February and March. “The judgment for that amount, assuming the hearing actually goes ahead that day, will most likely not be recoverable,” Hoffer said. “For a small landlord, the mortgage payments and utility bills for that five-month period, and for the subsequent enforcement period, which can run into the end of April, will come out of the landlord’s pocket.” Hoffer said the Board is allocating additional cases to each docket to help process the backlog; however, that move increases the likelihood that scheduled hearings will be adjourned because there is insufficient time to deal with all the cases that day. Beyond the overdue rent, there are financial impacts for tenants. For example, once the landlord files an application, the rent is due along with the $190 filing fee that the landlord has paid. Ultimately, if the Board grants an eviction order, the landlord applies to the sheriff to carry out the eviction and another $330 is added to the bill. If the

tenants want to avoid eviction, they have to pay everything, including the sheriff’s fees, resulting in increased financial liability for them. “Any of these delays increase the prospects for a tenant to simply give up and drag things out as long as they can before they’re forced to move elsewhere,” Hoffer said. As a result, landlords are bypassing good tenants with shaky financial circumstances. They can’t afford to take a chance, only to find it will take months to evict them due to the backlog if that course of action becomes necessary. Affected tenants include those whose income is derived from social assistance or disability payments, even though the majority are reliable and know how to prioritize their rent payments. “It’s discrimination for the landlord to refuse to rent to them, but the landlord has to make a choice between taking a risk that is going to be very costly if they lose their bet and potentially they’ll lose a good tenant,” Hoffer said. Last fall, Minister of Finance Vic Fedeli announced consultations into topics such as barriers to new housing supply and ways of increasing the Board’s efficiency. The presidents of provincial landlord associations, including FRPO, GTAA and LPMA, are working on submissions. The government set a deadline of January 25. Irwin said the new government understands the difficulty in finding affordable housing. “We’re hopeful, because of that, that the government will make some positive changes to housing policy that will benefit everyone. That’s our objective and we’re optimistic about where the government will go on this,” said Irwin.

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.

Sign up online or call Rebecca David. Ph: 519-672-6999 Web: www.LPMA.ca

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CFAA Rental Housing Conference 2019

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

With special thanks to:

For more information, or to receive email updates, email events@cfaa-fcapi.org

52 | January 2019

President’s message The Waterloo Regional Apartment Management Association greets 2019 with its newly elected Board of Directors, each of whom represent a spectrum of interests in real estate and rental housing provision.


Andrew Macallum, President

James Craig, Vice President

George Dube, Treasurer

Lars Sterne, Past President

Not pictured: Directors At Large Veronika Mitchell Rose Bradley Julie Popesku John Lawrence Sandra Knapp, Administrator Conner Godin, Marketing Manager Darlene Rehman, Secretary

WRAMA is proud to have hosted a number of experts and guest speakers over the past two events that ended 2018 and kicked off 2019! The association welcomed Chris Evans and Brian Dietrich from SAFEsystem. Mr. Evans described how his experience as a firefighter in Waterloo Region helped in the development of SAFEsystem, an Emergency Lock Box Network that integrates modern technology into current lock box programs.

Chris Evans (right) and Brian Dietrich flank the SAFEsystem screen.

Peter Miller, Director At Large

Larry Smith, Director At Large

He explained that his product dramatically removes the current threat of malicious removal, which can cause a huge expense in re-keying. It also reduces patient contact times and damage caused by forcible entry. More information can be found at www.safesystem.ca. Jeffrey Schumacher is the Supervisor, Housing Programs and Development for the Region of Waterloo and spoke to the different housing initiatives available to residents. Much of the presentation discussed the Secondary Suite Program made available through Ontario Renovates funding. This program requires a 15-year commitment to provide housing that must remain at 80 per cent market rent.

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On Monday, December 10, 2018, WRAMA was grateful to have had the opportunity to present at a City of Waterloo Council Meeting. With hopes of raising important questions and provoking dialogue about residential rental licensing and its inception eight years ago to how it impacts the current landscape of rental housing provision today, Council was asked to consider that almost every candidate running for Regional, Municipal and Township councils during the fall election had mentioned housing as a platform priority during their campaigns. With housing, affordable housing and affordability of housing regularly making headlines, WRAMA offered Concerns, Facts and Sources to help engage the conversation. Eleven items were provided as considerations to the residential rental licensing program, which has been regarded as unfair and a duplication of laws that currently exist at all three levels of government. The 11 points included support that the bylaw is indeed a tax. Additionally, it contradicts the current Police Record Checks Reform Act. The Waterloo “tax grab” was recognized by the Landlord and Tenant Board in a landlord’s application for an above guideline rent increase (AGI) based on the levy of the licensing fee as an extraordinary cost in “municipal taxes and charges.” The rent increase resulting from Waterloo’s license fee levies was 6.0% plus the Guideline increase of 1.8%, for a total of 7.8% (on average about $70.00 per month increase in monthly rent). Two tenants, funded by the Province of Ontario, appealed the Board’s decision to the Divisional Court and Cohen Highley Lawyers defended the landlord’s position seeking a dismissal of the appeal. The Divisional Court (2017) dismissed the tenants’ appeal and awarded the landlord legal costs of $7500.00. The Police Record Checks Reform Act, passed in December 2015 by a vote of 93-0 at Queen’s Park, became law on Nov. 1, 2018, fundamentally changing the rules around what police can tell prospective employers, volunteer agencies and foreign governments about Ontarians. The legislation was prompted by The Toronto Star’s Presumed Guilty investigation, which revealed tens of thousands of Canadians have records in police databases, despite never having been convicted of a crime. The investigation showed disclosure of those records has undermined careers and educations, crushed ambitions and limited international travel. In many cases, it ruined lives. With these 11 points in mind, WRAMA respectfully called upon City of Waterloo Council for the following three actions: • Include the Waterloo Regional Apartment Management Association as a viable partner in addressing rental housing issues in the city • Establish an independent task force to review the rental licensing by-law and its impact on the community, rental housing providers and affordable housing efforts • Provide relief and cancel the rental licensing by-law required costs & documents and rely on existing federal, provincial & municipal law and policy to achieve housing standards and code compliance The proposed 10-year licensing fee structure was subsequently passed unanimously by Council.

54 | January 2019

Season’s greetings – Tax season, that is Whoever said that “Canada has five seasons!” forgot Tax Season. As municipalities begin the new year with budget deliberations, the setting of property taxes, and ritual whittling down of increases, let’s take a moment to peek into the complexity of Ontario property taxes. Here in Waterloo Region, there’s a movement afoot to redress an imbalance in the property tax system, led by John MacDonald Architect. Like many municipalities across Ontario (with the exception of Barrie, Bruce County, Muskoka and York Region), the Region of Waterloo has a behindthe-scenes tax multiplier (the “Tax Class Ratio”) for multi-residential properties (7+ units) built before April 1, 2001. These older properties are taxed at 1.95 times their newer multi-res brethren and other classes of residential property. This situation is a hold-over from earlier years. At the turn of the Millennium, the Province instructed municipalities to lower the multi-residential tax ratio (Waterloo Region’s was then at 3.24) to be within a Fairness Ratio of between 1.0 and 1.1. For a decade, progress was made, but the municipal components of the rate have been stalled since 2010 at 1.95. The education portion (set by the Province, and about 8% of total tax) is already at 1.0. It’s a complex subject, but an important one. It has ramifications for the affordability of housing options and the rental market, and may be a factor that inhibits property owners from renewing older units. If you’d like to assist the effort, or want to know more, contact john@ johnmacdonaldarchitect.ca. By John MacDonald – JMA

Market survey results Rental demand in the Census Metropolitan Area of Kitchener-Cambridge-Waterloo (KCW CMA) grew this past year. One indication of this is that average rents among structures common to the CMHC’s annual Rental Market Survey in 2017 and 2018 increased by 5.7%, which is higher than the 2.3% annual growth experienced historically over the past decade. Higher borrowing costs and elevated prices are contributing to affordability concerns, keeping some potential homeowners in the rental market for longer. Despite growing demand, the overall vacancy rate in KCW CMA rose from 1.9% in 2017 to 2.9% in 2018. This was mainly due to the large rental supply increase over the last two years, just under two-thirds of which are two-bedroom units. The overall vacancy rose due to the increase in 1-bedroom and 2-bedroom units; however, the vacancy rate for 3+bedroom units actually fell from 3.1% to 1.7%, the lowest rate it has been since 2001. This suggests that there is growing demand for larger rental units – units capable of hosting larger households, such as families. Looking ahead, certain demographic trends suggest that vacancy rates will remain relatively low in the short term. The KCW CMA population continues to grow, and has actually been increasing faster over the last three years. In particular, international students are a segment of the population sure to continue adding to rental demand. The rising proportion of seniors in KCW CMA will also support rental demand. By Jennifer Y. Tsao – Senior Analyst, Economics, CMHC

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 | 55

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56 | January 2019


Cyber security was a huge issue in 2018 and it will become more prevalent in years to come.

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Vol. 11 No. 6 January 2019


2018 - Year of the data breach


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Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives

Canada’s elevator industry needs an overhaul

The Auditor’s report identifies serious problems in the elevator industry.

Claims for undue damage to units provided for Housing First By John Dickie, EOLO Chair

As reported in earlier issues, the City of Ottawa has substantially improved the Rent Supplement program to obtain more landlord take-up. Improvements include higher maximum rents that vary with household size, one-time commitments and paying reasonable costs for the repair of excess damage to units. Recently, the City has introduced a separate program to pay reasonable costs for the repair of excess damage to units occupied by clients of the Housing First program, who receive ongoing social service supports from various agencies, such as the Ottawa Mission and Options Bytown. Those units are sometimes rented through the Landlord Partnership Program. The City consulted with EOLO about the terms of the new program, which is known as the Landlord Damage Fund (LDF). The LDF can reimburse a landlord for significant damage, whether or not the tenant still resides in the rental unit. When they assist clients to rent a unit, the Housing First Case Managers will complete a move-in checklist and take photos of any existing damage. They will encourage their clients (i.e., Housing First tenants) to report maintenance and repair needs as the tenancy unfolds. With the tenant’s specific consent, the case manager can communicate with the landlord directly. Upon termination of a tenancy, the agencies’ case managers are to complete a move-out checklist and take photos of any damage. The landlord may make a claim within one month of becoming aware of damage beyond normal wear and tear or turnover

needs. (Normal turnover needs would include cleaning appliances, or painting over holes from hanging pictures). The damage may have been done by the tenant, guests or home takeover perpetrators, and it can include extreme cleaning, and cartage due to hoarding. The repair work must be modest and of similar quality/standards as the items being replaced or repaired, returning the property to the same condition as when the tenant moved in. If the landlord chooses to make an upgrade while repairing the damage, estimates must be provided for both the restoration and the upgrade. The City will only reimburse up to the cost of the restoration. The repair work can be done by the landlord’s own staff, and in that case the landlord must provide an invoice specifying the number of staff hours, and the staff’s hourly rate. If the landlord has an HST number, this must be shown on the invoice. Photographs are required both before and after the damage is repaired. The claim must be submitted to the City using Form 4 – LDF – Landlord’s Damage Claim form. The claim must include either two estimates (if made before the work is done), or an actual invoice (if made after the work is done). The City will ask the agency to compare the claim with their records of any damage, and may inspect the unit. The City will then decide whether and how much to pay, and provide its decision in writing. With this new program, renting to a challenging tenant through the Landlord Partnership Program should be significantly better in all ways than renting to a similar

rentalhousingbusiness.ca | 57

tenant who lacks the Housing First case management supports. Questions can be directed to Etienne Westlake, Program Coordinator, City of Ottawa, Housing Services, Homelessness Programs and Residential Services Branch at (613) 580-2424, Ext. 24857 or Etienne.Westlake@Ottawa.ca. EOLO hopes that the new program will assist landlords in making the decision to provide rental units for the Landlord Partnership Program, thereby contributing to the reduction of chronic homelessness in Ottawa.

Ten Year Housing and Homelessness Plan review Five years ago, the City of Ottawa adopted its first Ten Year Housing and Homelessness Plan. EOLO worked with the City and many other housing sector groups in the development of that plan. The City is now in the process of refreshing the plan, and EOLO is again participating in the process. Under provincial law, the plan needs to include: • Assessment of current and future housing needs • Objectives and targets related to housing needs • A description of the measures proposed to meet the objectives and targets • A description of how progress toward meeting the objectives and targets will be measured The plan is to be informed by broad consultation including those with lived experience (i.e., people who have experienced homelessness or housing need). As part of the consultation, the City intends to inform and educate stakeholders and improve the public’s understanding of the plan, the housing sector and housing services. The City wants to learn more about barriers to progress, including regulatory barriers, to be able to eliminate or reduce them. (One example is the introduction of the Landlord Damage Fund, which is to address the issue that landlords are reluctant to rent to certain tenants because landlords believe the risk of unit damage is elevated, a concern that EOLO has been advancing for several years. See the article above.) Along with other speakers and topics, EOLO will invite the City to address the Housing and Homelessness Plan review at EOLO’s Education event on March 19, 2019. Learn about what’s in the plan, and provide your input on how the plan can be improved going forward!

58 | January 2019

New supportive and affordable housing The City of Ottawa recently announced the recipients of funding for new supportive and affordable housing. A total of 46 units of supportive housing and 74 additional units of affordable housing are to be built with government subsidies of $16.8M, an average subsidy of $140,000 per unit. Here are the winning proponents and their projects.

John Howard Society of Ottawa John Howard Society of Ottawa (JHS) provides child and youth services, employment and training services, and adult justice programs to both men and women who have come into conflict with the law, or who are at risk of doing so. Since 2009, JHS has provided Housing First supports and services to chronically homeless men, women and youth. Funded in large part with $6M from the Province’s Home for Good program, the new building at 289 Carling Avenue will consist of 40 self-contained apartment units with on-site supports for transitional-aged youth and adults, and single men and women, as well as JHS’s central office.

DeafBlind Ontario Services DeafBlind Ontario Services helps individuals who are deafblind increase their independence and improve their quality of

life through specialized services. DeafBlind Ontario Services will receive $850,000 to construct a six-unit congregate living residence in Vars with intensive supports and specific accessible features for visual, auditory and physical impairments.

King’s Daughters and Sons Apartments Inc. The new building being constructed by the King’s Daughters and Sons Apartments Inc. (KDS) at 567 Cambridge St. will address seniors’ affordable housing needs through additional affordable units. KDS will facilitate aging in place and independent living by working with partners to provide health-related support services on-site for low-income seniors. Funding was already in place for 30 units, but an additional $2.4M has been allocated for 20 more units.

Ottawa Community Housing Ottawa Community Housing (OCH) will replace end-of-life-cycle row housing at 811 Gladstone Avenue with a new, 140-unit midrise apartment building. The building will include stacked townhouses along Balsam Street to accommodate households with children. This is the first phase of a larger redevelopment plan for OCH’s Rochester Heights community. Funding was already in place for 86 units (including 30 for seniors), but an additional $7.6M has been allocated for 54 more units.

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.

rentalhousingbusiness.ca | 59

Brought to you by:

SUITE COUNT RHB SIDEBAR Capital markets & national investment snapshot

National Apartment Group

Turnover rates decrease to 15% in 2018

DAVID MONTRESSOR, Executive Vice President, CBRE - National Apartment Group

A steady decrease in turnover rates since 2016 continues to impact Ontario’s rental housing industry. Historically, turnover rates maintained stable levels above 25% in Ontario. In recent years, several factors have put downward pressure rates to recent lows of 14.9%, according to CMHC’s Fall 2018 Turnover rates decrease toon 15%turnover in 2018 Report. In total, 12 out of 16 major Ontario CMAs have posted decreases in turnover over the previous steady decrease in turnover rates since 2016 continues to impact Ontario’s rental housing industry. Historically, two years, Acreating both opportunities and risks for landlords. Lower turnover corresponds with healthy turnover rates maintained stable levels above 25% in Ontario. In recent years, several factors have put downward occupancy and steady cash flows. However, within the context of historically low vacancy and robust pressure on turnover rates to recent lows of 14.9%, according to CMHC’s Fall 2018 Report. In total, 12 out of 16 growth in rental rates, lower turnover is also an obstacle to matching increases in operating costs and major Ontario CMAs have posted decreases in turnover over the previous two years, creating both opportunities maximizingand revenues. risks for landlords. Lower turnover corresponds with healthy occupancy and steady cashflows. However, within the context of historically low vacancy and robust growth in rental rates, lower turnover is also an obstacle

While the trend is more pronounced in certain markets, the overall pattern shows that tenants in Ontario to matching increases in operating costs and maximizing revenues. are staying put for longer than in the past. The primary driver is an absence of rental supply to allow While the trendwithin is more pronounced certain markets, the overall pattern showssits that tenants in Ontario areof housing for lateral movement the rentalin market, as provincial vacancy at 1.8%. A lack staying put for longer than in the past. The primary driver is an absence of rental supply to allow for lateral substitutes in single family homes and condominiums creates further challenges for upward movement movement withindown the rental market, as provincial vacancy sits at 1.8%. A lackassociated of housing substitutes in single family criteria among renters. Larger payments and higher interest rates with OSFI lending and condominiums creates furtherbarriers challengesto forhome upward movement among renters. Larger down and tighterhomes monetary policy also create ownership that contribute to decreasing payments and higher interest rates associated with OSFI lending criteria and tighter monetary policy also create turnover across the province. barriers to homeownership that contribute to decreasing turnover across the province.

Lower turnover will have varying investment in Ontario’s rental speaking, if Lower turnover will have varyingimpacts impacts onon investment in Ontario’s rental markets. Broadlymarkets. speaking, ifBroadly market market rentrent increases turnover are realized a over slower pace over an investors investment increases onon turnover are realized at a slower at pace an investment horizon, will lookhorizon, to manage investors will look to manage acquisition withcap higher incoming cap rates.forHowever, prospects for market acquisition pricing with pricing higher incoming rates. However, strong prospects market rent strong growth will rent growthneutralize will neutralize the effects turnover in large urban centres, maintaining the effects of lower turnoverofin lower large urban centres, maintaining downward pressure on cap rates for downward thecap assetrates class. The driving lower turnover appear todriving be secularlower in natureturnover and are expected to impact pressure on forforces the asset class. The forces appear to bethe secular in nature industry into foreseeable future. and are expected to the impact the industry into the foreseeable future.

Turnover Rates Decline Across Ontario

Apartment Turnover Rates


25% Kingston, 23.1% London, 21.1% Ottawa-Gat., 20.3%


K-C-W, 18.8% Windsor, 18.0% Guelph, 17.5% Hamilton, 15.9% Ontario, 14.9%


Thunder Bay, 12.2% Toronto, 11.2% 10%

60 | January 2019










Thunder Bay




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