One year later – Conversations about COVID-19 and the rental housing industry It has been a year since the first case of COVID-19 was reported in Canada, and a lot has happened since then. The Canadian economy has been affected in many different and negative ways. The pandemic has also taken its toll on the rental housing industry. Rather than taking a big picture view of what has happened to our industry, RHB Magazine wanted to speak to an owner one on one to get their take on the government’s actions to help people and businesses weather the pandemic financially. We discussed how these decisions have affected their business, as well as other related topics. We also spoke to a legal expert and a financier about their perspectives on pandemic-related matters that have affected the rental housing industry. certainly helped deal with what could have been a major problem for multi-residential landlords. By and large, our tenants have been doing the right thing with their stimulus money, that is buying food, paying their rent and staying safe. This pandemic has brought many things to light, one of them being just how important housing is in this country and around the world.
R. Jason Ashdown Co-Founder and CSO. (Chief Sustainability Officer), Skyline Group of Companies
RHB: The federal and provincial governments have instituted a number of programs to help businesses and individuals deal with the financial challenges brought about by COVID19. What is your take on the government’s financial relief programs for people who have lost their jobs or been forced to close their businesses? Jason Ashdown: The financial stimulus the government has delivered in a variety of ways for a variety of segments of the population has
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RHB: How have you and other landlords helped tenants during these difficult times? Jason Ashdown: I will start by saying that out of all the landlords that I know and have had conversations with during this pandemic, all have worked diligently to find ways to help and implement programs to keep our customers, our tenants, housed and safe. Respected landlords have been finding ways to help tenants through a variety of programs with rent deferral, rent assistance, tenant relief efforts, and the list goes on. Unfortunately, the general public rarely hear about these efforts. As a company, we developed and implemented a Tenant Relief Fund in 2019. We call the program RISE (Reach, Impact, Support, Elevate). This program is meant to help our tenants that fall upon hard times, generally at no
By David Gargaro
fault of their own. Things like illness, job loss, abuse, accidents, and any number of situations. This fund is available to help those tenants that need it most. We have a dedicated Tenant Support Team that will help our tenants find resources, and assistance with problems, including financial aid. Coming into this pandemic, we were very fortunate to already have this program in place, so it was relatively easy for us to implement on a larger scale.
RHB: Have you had any challenges with making use of the government programs to get financial assistance for yourself or tenants? Jason Ashdown: That is a good question. I
RHB: What do you mean by “bad acting”? Jason Ashdown: By bad acting, I don’t mean falling behind on rent because they are struggling to make ends meet through no fault of their own. I’m talking about tenants who are choosing to boycott paying rent because they can’t be evicted. These constitute a small number in our portfolio, but the outstanding balances owing are unprecedented in my 25 years in this business. As for the moratorium on evictions, I understand this may sound like a good idea to keep people housed, but it will also cause some very good tenants to have to endure some very difficult neighbours for an extended period of time.
think the rental system, although slightly different from province to province, works just fine when operating in a normal environment. That being said, Ontario is hands down the most burdensome and takes by far the longest amount of time to administer; it takes up to five times longer than the other provinces. When we experience something like a pandemic, it’s obviously very, very hard to plan for, for landlords and the government. So having a system with challenges going into the pandemic is exacerbating the problem now.
RHB: How has this affected the tenants who are paying the rent? Jason Ashdown: I would generally like to
RHB: Are there any government actions that have been detrimental to your rental housing business? If so, what has been the problem? Jason Ashdown: If we want to highlight things
a broad-brush approach that really didn’t help the tenants needing help the most. There are several tenants that are falling through the cracks, who are finding themselves in a very difficult financial position, for any number of reasons, job loss, illness, or perhaps they do not qualify for a stimulus package. Any variety or combination of reasons really. The rent freeze gave everyone in Ontario and BC a holiday on rent increases for one year.
that were detrimental, I would bring attention to decisions that were knee-jerk in nature. Had there been more consultation with our industry, they could have been rolled out differently and more effectively. Now, obviously, having a moratorium on evictions removes the one and often only tool that landlords have for dealing with bad acting tenants.
commend our tenants for what I have witnessed over the course of this pandemic. Most have been managing the situation with discipline and respect for one another and our building staff.
RHB: What is your take on the freeze on rent increases? Jason Ashdown: The rent increase freeze was
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RHB: Do you have an alternative solution than instituting a freeze on rent increases? Jason Ashdown: From a landlords’ perspective, it may have been more impactful to give more money to less people. I mean, rather than giving everyone in a building $40, it would have more impact to give a select number of people $400 or $4000 to help them get back on track. That way, everyone would be helping just a little bit to support those that need it most, thus taking significant pressure off those tenants that are really struggling. But once again, hindsight is 20/20.
RHB: What should the government have done to address these issues instead? Jason Ashdown: I guess if I was to say anything here, it would be to consult with the professionals in the industry before implementing wide-sweeping changes. As an industry, we take great pride to work diligently and be a part of the solution when it comes to housing management and housing supply, including in a crisis, so please include us in the conversation.
RHB: As a property owner, you still have to take care of your buildings and make sure that tenants have a safe place to live. Has the pandemic affected your ability to maintain or upgrade your rental housing properties? Jason Ashdown: When you ask how the pandemic has affected the ability to maintain or upgrade rental housing properties, those answers are simple ones really. We are trying to reduce access to occupied apartments, as we’re mandated to reduce contact with each other, so any non-urgent maintenance in apartments has basically been put on hold or taken care of in a different way. When it comes to capital expenditures, the same thinking applies. Some non-urgent capital improvements have been put on hold. Capex projects that are relatively noninvasive in nature can still move forward, like a roof repair or replacement. But considering pretty much everyone is home right now 24/7, we have reduced our number of cosmetic construction projects like hall or lobby upgrades until a future date. Some projects that we must move forward with that relate to tenant and public safety. Things like elevator modifications, fire safety systems or emergency lighting as examples must still be completed.
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Kristin Ley, Lawyer, Cohen Highley LLP
RHB: The federal and provincial governments have instituted a number of programs and initiatives to help companies and individuals deal with pandemic-related financial and business challenges. Has the government amended any legislation designed to help those in the rental housing industry? Kristen Ley: Amendments to the Residential Tenancies Act, 2006, which provide improved opportunities for early resolution of applications before the Landlord and Tenant Board, are helpful to the industry. A lot of misinformation was circulated by tenant advocates about Advanced Resolutions and, in particular, the ability for landlords and tenants to agree that a section 78 clause would apply to a rent repayment agreement reached between them. In truth, the expanded scope of early resolutions will assist with the backlog of cases before the Board and will afford parties an opportunity to save the expense and time associated with waiting for a hearing date simply to meet with a Dispute Resolution Officer or mediator.
RHB: Is there any new legislation that relates to COVID-19 and the rental housing industry? Kristen Ley: The passing of Bill 218, Supporting Ontario’s Recovery Act, at the end of the year limits liability for COVID-19-related claims. It gives some comfort to organizations and operators who acted in good faith in following the public health guidance offered for limiting the spread of COVID19.
RHB: Have government actions have been detrimental to the rental housing industry? Kristen Ley: The financial support offered through CERB and other government programs did not do enough to assist tenants who were unable to pay their rent or who chose to spend the funds received on expenses other than rent, continued on page 20
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despite mounting arrears. Given the monthslong moratorium on residential evictions and the fact that the Landlord and Tenant Board ceased processing the majority of eviction applications during that time, a program for residential rents similar to that provided for commercial rents would have benefited the industry. Both the backlog of cases before the Board and the sizeable arrears owed by households can be expected to grow, straining the financial position of larger operators and risking the viability of smaller operators.
RHB: Have there been any other detrimental government decisions? Kristin Ley: On top of a lack of support for the residential rental industry, the imposition of a rent freeze for 2021 was a significant hit to operators, especially those who had waived or deferred rent increases in 2020 in an effort to provide some relief to tenants. Early public comments by the Premier and the Mayor of Toronto concerning rent and an assurance that individuals who could not pay their rent would not be evicted was certainly detrimental to the industry. The message was misleading at best and was shared widely.
RHB: What do rental housing owners need to know or do with respect to legislation? Kristen Ley: Owners need to be aware of the Bill 184 amendments to the Residential Tenancies Act, 2006, particularly with respect to the obligation for a Board Member to consider whether a landlord has attempted to negotiate a resolution with the tenant on an application for rent arrears, some or all of which were accumulated after the start of the pandemic. An adjudicator must consider the steps taken by the landlord and if the Board is not satisfied that attempts were made in accordance with 83(6), a member may delay or deny an order terminating the tenancy.
RHB: Is there anything else that rental property owners should know or do to protect themselves from a legal perspective? Kristen Ley: Operators will want to continue to follow public health guidance on limiting the spread of COVID-19 and ensure appropriate cleaning and sanitizing procedures are in place. It will be important to have policies in place for mask and face coverings and documentation should be maintained to evidence efforts to ensure compliance, such as postings, reminder letters, confirmation received that an individual is exempt from a mask by-law, etc.
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Rena Malkah, President, CYR Funding Inc.
RHB: COVID-19 has caused a significant number of financial challenges for rental housing owners, especially smaller property owners. Has the pandemic affected their ability to renew mortgages or get financing on rental housing properties? Rena Malkah: The pandemic has not affected the ability to renew mortgages, provided the payments have been made on time throughout the term. However, getting new mortgages approved may be more difficult, as lenders are concerned about tenants being able to pay the rents due to many people having lost their jobs or their businesses.
RHB: On May 28 of last year, CMHC changes its use of fund rules. How has this affected the financing situation for rental housing owners? Rena Malkah: The changes by CMHC not allowing equity take-out funds on multi-family buildings, except for certain uses, have not affected financing much. Since CMHC no longer allows equity take-out, owners can get conventional financing at about 1 per cent higher rate than CMHC. After saving the CMHC premium, it is almost a wash during the first five years.
RHB: Thank you for your input and participation.
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