RHB Magazine July 2022

Page 1

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

Vol. 15 No. 2 July 2022

The official publication of:

Avenue Living: From Brooks to billions In just 16 years, Anthony Giuffre has grown his business from one rental property to $3.8 billion in assets under management.

Strategic digital marketing: The value of a holistic approach

Your website should be a key tool in your marketing strategy.

Requirement to report elevator outages via portal takes effect on July 1

Owners and licensees of elevators in Ontario should be aware of this new legislation.

Frank Leone: Portrait of a rental property owner

The owner of Lenmar Ltd. is a dedicated reader of our magazine and representative of our industry.


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EDITOR’S NOTES Less than half is not good enough Ontario just had a provincial election. Voter turnout was less than 50 per cent. It does not matter who you vote for – that’s an unacceptable turnout. One could argue that COVID-19, the economic situation, and other factors contributed to voter apathy. Perhaps more could have been done to encourage higher turnout. Maybe we should go the route of mandatory voting. I don’t think we’re there yet. But people should participate, even if that means voting for none of the above. We’ll see what happens with the pending municipal elections. The situation cannot change unless people vote and make their voices heard. Doing nothing is not the answer. The July issue of RHB Magazine features a Q&A with Anthony Giuffre, the founder and CEO of Avenue Living Group of Companies. In just 16 years, he’s grown his company from a two-person business with one multi-family property to managing more than $3.8 billion in assets, which includes multi-family residential, self-storage, agricultural land, and commercial assets. The company has also partnered with the Canada Infrastructure Bank to commit $150 million toward sustainable retrofit projects. The second article is a portrait of Frank Leone, president of Lenmar Ltd. He is an avid reader of RHB Magazine, whose eagle eyes pointed out an interesting photographic error in our pages. More importantly, he is representative of the majority of the rental housing industry, as he owned one multi-unit rental property. The third article discusses the recent legislative requirement to report elevator outages in Ontario. Elevator owners and licensees should note that elevator outages will be included on a list that will be made available to the public. Make sure to read the valuable content from CFAA and FRPO, as well as the four associations in Regional Association Voice. Yardi Canada discusses the value of a holistic approach to digital marketing. We enjoy hearing from our readers, and we support two-way communication, so if you have comments or questions, send them to david@rentalhousingbusiness.ca. I look forward to hearing from you. And, of course, stay safe and healthy!

Co-founder, Publisher

Marc Côté marc@rentalhousingbusiness.ca

Associate Publisher Nishant Rai

Editorial

David Gargaro david@rentalhousingbusiness.ca

Contributing Editor

John Dickie, President CFAA jdickie@rentalhousingbusiness.ca

Creative Director / Designer Scott Clark

Photography by Revi Riabinski

Office Manager Geeta Lokhram

Subscriptions

One year $49.99 Cdn Two years $79.99 Cdn Single copy sales $9.99 Cdn Opinions expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the CFAA Board or management. CFAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher. P.O. Box 696, Maple, ON L6A 1S7 416-236-7473

Enjoy the issue! David Gargaro Senior Editor

4 | July 2022

Produced in Canada All contents copyright © RHB Inc. Canadian Publications Mail Product Sales Agreement No. 42652516


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CONTENTS

VOL.15 NO.2 2022

30

Requirement to report elevator outages via portal takes effect on July 1

Owners and licensees of elevators in Ontario should be aware of this new legislation.

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

Avenue Living: From Brooks to billions

Hot Topics: LPMA explains its Property Management 101 course, as well as how rental housing providers are coping with the rampant supply chain interruptions. pg. 49 WRAMA reports news on the municipal elections for Waterloo Region, its cities and Guelph, and on the Landlord and Tenant Board Townhall held on July 6, with the LTB’s projection for when the backlog will be cleared. pg. 53

In just 16 years, Anthony Giuffre has grown his business from one rental property to $3.8 billion in assets under management.

HDAA provides an update on Hamilton’s vacant home tax, the municipal election in Hamilton, and HDAA’s recent dinner meeting, hearing from Tony Irwin, FRPO CEO. pg. 57 EOLO reports on the candidates for mayor in the Ottawa municipal election, and discusses the pros and cons of inclusionary zoning and Ottawa’s steps toward adopting it in major transit station areas. pg. 61

The Member Associations

47

Regional Association Voice

RAV features the latest industry news from four member associations.

Frank Leone: Portrait of a rental property owner The owner of Lenmar Ltd. is a dedicated reader of our magazine and representative of our industry.

6 | July 2022

64

Final Take Away

Strategic digital marketing: The value of a holistic approach Your website should be a key tool in your marketing strategy.


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PRESIDENT’S CORNER This issue of National Outlook reports on the federal government’s review of housing, which could lead to counterproductive tax changes. The article begins on page 35, and continues on page 40. CFAA is currently working with the major public REITs, REALPAC and FRPO to coordinate our government relations and public relations campaigns to deal with that review. CFAA invites participation from all our member associations, and from direct CFAA members. Besides addressing the serious policy downsides of the new tax that could emerge from the review, the article also addresses a broader problem. There are a significant number of areas in which measures adopted to promote housing affordability in the short term stand in the way of housing affordability in the medium or long term. Examples include rent control and inclusionary zoning. Those, and many other government policies addressing other issues, tend to reduce rental housing development. In turn, less development results in less availability and worsened affordability. Other issues facing the rental housing developers are the recent increases in construction costs and interest rates. Those changes may well result in the postponement or cancellation of rental housing projects, including government-supported affordable housing projects. That will put more pressure on the rental market, and on more pressure on governments to respond to housing affordability concerns in ways the rental industry would dislike. Pages 37 and 38 of National Outlook report on the winners of the 2022 CFAA Rental Housing Awards. Pages 39 and 40 list and thank the sponsors, speakers and moderators who made CFAA Rental Housing Conference 2022 such a success.

8 | July 2022

CFAA-RHC 2023 will be held in Halifax in midJune 2023! Please plan to attend. The Home Depot remains a CFAA Strategic Partner. By registering your membership in CFAA (either directly or through one of CFAA’s 12 member associations) with Home Depot Pro, you benefit yourself and CFAA. This partnership benefits every rental housing provider reading this magazine. Yardi Systems is another a long-standing CFAA Strategic Partner. We look forward to working with Yardi to bring you informative panels, and the latest and best information on technology and marketing for rental housing providers, at CFAARHC 2023 in Halifax. If you are not already a direct member of CFAA, please consider joining CFAA as a direct Rental Housing Provider Member, or a Suppliers Council Member today. E-mail admin@ CFAA-FCAPI.org.

John Dickie, CFAA President John Dickie, CFAA President


rentalhousingbusiness.ca | 9


In this issue of... NATIONAL OUTLOOK 35. The federal government is conducting a review of “housing as an asset class”. The 2022 Budget raised the issue of a new federal tax on “excessive rent increases”, after renovations made on unit turnover. Along with many rental housing providers, CFAA is very concerned about the government’s plans and the review.

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

37. Which rental housing providers won in the 2022 CFAA Rental Housing Awards? Which rental housing employees? Which marketing programs? Which renovations? Which rental housing developments?

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

40. W ho spoke or moderated at CFAA – Rental Housing Conference 2022? Where and when is CFAA – RHC 2023 taking place?

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 12 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $950 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.

10 | July 2022

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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Avenue Living: In 2006, Avenue Living Group (Avenue Living) started out as a twoperson operation with one property. In just 16 years, the company has grown to more than 800 employees and has acquired more than $3.8 billion in assets under management in several cities across Canada and the U.S. Through its private real estate investment trusts (REITs), it has invested in significant capital improvements and manages more than $1 billion in equity from strategic capital partners. Avenue Living has also recently partnered with Canada Infrastructure Bank to fund sustainable deep energy retrofit projects in its multi-family properties throughout Western Canada (see sidebar).

RHB Magazine sat down with Anthony Giuffre, Founder and CEO of Avenue Living, to learn more about the company’s growth and success. RHB: It’s a pleasure to meet you, Anthony. You’ve come a long way in a relatively short time. Please tell me a bit about your background.

Anthony: I come from an entrepreneurial family,

and I’ve been inspired by my father who is 95 this year, a lifelong entrepreneur. I tried to follow in my father’s footsteps, and I worked for him as a very young man. My first part-time job with him was in the storage business that he founded in 1977, which I took over in 2020 and have now grown to over 100 locations. Outside of our family storage business, my first entrepreneurial venture dates back to my mid-teens. I rented out community centres and I would hire a DJ and security, and sell tickets to high school students to hang out on Friday evenings for a dry event. Throughout my youth, I explored and owned ventures in hospitality and retail, and became drawn to real estate in my 30s. I learned early on that growth and success come from recognizing that every detail matters, so you need many sets of eyes to run a business well.

14 | July 2022

RHB: How did you start Avenue Living Group? Anthony: In 2006, I founded the Avenue Living

Group when I saw an opportunity in multi-family housing in secondary markets. I purchased my first multi-family investment property, a 24-unit townhome complex in Brooks, Alberta. At the time, Calgary and Edmonton were experiencing exceptional growth and property valuations had increased substantially. However, it was our view that more attractive investment opportunities could be found further afield. So, we began investigating secondary and tertiary markets outside of these larger city centres. Brooks, a regional trading hub located just east of Calgary, presented us with the opportunity we were seeking. As one can imagine, being one-half of a two-person asset and property management team, these early days entailed many 100-mile drives to and from Brooks. Ultimately, this proved to be a foundational step toward the active management approach that we implement and utilize today across all of our assets.


From Brooks to billions By David Gargaro

rentalhousingbusiness.ca | 15


RHB: Where did the company go from there?

activities. How would you describe your company?

Anthony: The early learnings from our first

Anthony: Our investment vehicles operate

acquisition paved the path for our future growth. Having since expanded beyond Brooks, Alberta, Avenue Living has developed a significant market presence in the primary Western Canadian markets of Calgary, Edmonton, Saskatoon, Regina, and Winnipeg, and in 2020 entered the United States, acquiring its first asset in Colorado Springs, Colorado.

RHB: How large has Avenue Living grown to date, and what areas does it serve?

Anthony: Across our four real estate mandates,

we invest in multi-family residential, self-storage, agricultural land, and commercial assets. Our portfolio includes over 14,700 multi-family doors, including over 950 units located in the United States, more than 3.6 million square feet of self-storage space, over 496,000 square feet of commercial real estate, and more than 82,800 acres of Saskatchewan farmland. Avenue Living Group operates in seven provinces and 11 states.

RHB: Have you made any key purchases recently? Anthony: Every decision and every purchase

we’ve made has been part of an overall strategy and we’re fortunate to have many milestone moments over the course of our business. A recent notable milestone would certainly have to be our acquisition of 764 units earlier this year, which significantly increased our market share in the Calgary area.

RHB: Avenue Living owns and manages rental

properties. It also engages in asset management

16 | July 2022

as private REITs, with our asset management and property management arms supporting the operation of the underlying assets. An investment vehicle like a REIT just holds the assets, so it requires a manager to run the dayto-day operations. We’ve spent 16 years building what we believe is the best-in-class proprietary management platform to service our continued growth in assets.

RHB: How does this affect how you run the business and manage investments?

Anthony: We take pride in the fact that we are

active owner-operators of our assets, which sets us apart from other market participants operating under more passive asset allocation models that might hire third-party service providers to manage the business. In addition, our unique, vertically integrated asset and property management platform allows us to manage “wide-not-high,” providing the means to deliver institutional-quality active management to low-to-medium density residential accommodation at scale. We strive to manage every aspect of our investment strategy internally and prioritize the need to provide a safe, comfortable, and affordable housing solution for our residents. From first contact, through leasing, maintenance, and ongoing service, we continually seek to provide our residents with an exceptional experience at each step of the relationship.

RHB: I understand you have different real estate investment funds. Please tell me more about them.

continued on page 20


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Delivered to you by Canada Infrastructure Bank and Avenue Living Asset Management commit $150 million to sustainable retrofit projects By David Gargaro After two years of planning and due diligence, the Canada Infrastructure Bank (CIB) and Avenue Living Asset Management announced an agreement to commit $150 million toward sustainable retrofit projects in low- to medium-density residential buildings in Avenue Living’s portfolio across Western Canada. The CIB’s investment represents 80 per cent ($120 million) of the total investment. The investment will help to support Avenue Living’s corporate commitment to reduce greenhouse gas (GHG) emissions and address the region’s aging housing supply. The funds will improve the living conditions for thousands of its residents, as more than 90 per cent of rental properties were built prior to 2000. “Looking forward, we’re extremely excited to begin work on a partnership with the Canada Infrastructure Bank, which will see us retrofitting nearly half of our total units and making them more environmentally and operationally efficient,” said Anthony Giuffre, Founder and CEO, Avenue Living Group of Companies. “With rising costs and sustainability being top of mind for so many, we are proud to be industry leaders and bring solutions to the Canadian housing marketplace in the form of sustainable, high-quality, rental accommodation designed to remain within the well-regarded affordability construct of rent-to-income.” The CIB’s Commercial Building Retrofit Initiative targets building retrofit projects with at least 30 per cent GHG emission reduction at the building level. Its goals include optimizing building performance, decreasing GHG emissions by more than 49 per cent, and enhancing functionality and comfort for occupants. Projects will focus on renewable energy generation on-site, low carbon heating and cooling, sensors and smart thermostats, optimized air filtration, water and vapour management, and energy consumption strategies to reduce costs for Avenue Living and its tenants. Sample solutions include: • Solar PV installation (photovoltaic panels) • Building envelope upgrades • Energy-efficient windows and doors • Heating & mechanical upgrades (e.g., geothermal, heat recovery ventilation, condensing boilers) • Property technology implementations (e.g., digitization of controllable systems) The projects will impact nearly half of Avenue Living’s overall multi-family portfolio, involving 6,800 units across 132 properties. It is estimated to take four years to complete construction and implementation after closing the arrangement. They anticipate that all work will be completed without having to remove residents or affect occupancy. “By 2027, we have the vision of completing 100 per cent of our growing Canadian portfolio, continuing to positively impact the communities we serve,” said Giuffre. “CIB’s investment is aligned with our demonstrated focus on responsible fiscal management, strong risk mitigation, and ingenuity through engineering, construction, and unique retrofit solutions.” The CIB has committed more than $800 million toward building energy retrofits across different businesses and industries. It has also invested $10 million in new broadband infrastructure for Indigenous and rural Alberta communities. The CIB plans to invest up to $5 billion into green infrastructure that supports climate change action and sustainable economic growth. Avenue Living is one of the first REITs that CIB has partnered with to address multi-family residential retrofits at scale.

18 | July 2022


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continued from page 16

“One key point of differentiation is that we have never relied on “hot” markets to perform.“

Anthony: Avenue Living currently manages

four private REITs, marketed as alternative real estate investments, which provide investors with the opportunity to gain exposure to real estate without directly owning or managing a property on their own. Avenue Living Real Estate Core Trust targets stabilized and near-stabilized assets. The portfolio is comprised of over 450 multi-family and mixed-use buildings, totalling over 13,700 units across three provinces and four U.S. states, and includes over 36,000 square feet of commercial space in Western Canada. Mini Mall Storage Properties Trust is focused on consolidating the fragmented self-storage industry across North America. The portfolio presently comprises over 3.6 million square feet of selfstorage space and more than 100 facilities across seven Canadian provinces and eight U.S. states. Avenue Living Real Estate Opportunity Trust targets value-add and under-performing multifamily assets, balanced with stable, well-tenanted commercial assets. The portfolio has more than 1,060 multi-family units and over 450,000 square feet of commercial space across Alberta and Saskatchewan. Avenue Living Agricultural Land Trust invests in Canadian farmland and leases it to farm operators. The portfolio is comprised of over 82,800 acres of farmland and strives to ensure tenants employ best practices in farming to maintain the productivity of the land for future generations.

RHB: How is Avenue Living different from other real estate platforms?

Anthony: One key point of differentiation is that

we have never relied on “hot” markets to perform. We have always sought to generate returns through sustainable value-add operations. We also pride ourselves on being very disciplined in where and what we buy. For example, a significant part of our acquisition strategy is to focus on

20 | July 2022

markets where there’s sector diversification of the economy. As an illustration, another aspect that truly sets us apart in the multi-family space is the level of customer service we offer. We provide timely, attentive, and positive service to our residents, ensuring their needs are met, if not exceeded. For instance, our goal was to make sure that if someone phones our call centre, they’ll receive service within 24 hours. Typically, we only have 0.9 per cent of all work orders still open after 24 hours, which is well below the industry average.

RHB: How has Avenue Living evolved to address the needs of its resident base?

Anthony: We have defined and narrowed our

focus around delivering a high level of service to a specific demographic profile: workforce housing. Workforce housing caters to those members of the renter population that may be overqualified for affordable housing, yet may still be unable to afford average market-rate housing. We further define this demographic to represent individuals or households earning between $15 and $50 per hour. Research suggests that the workforce housing market demographic we serve may make up as much as 40 per cent of a region’s private rental market population.

RHB: How do you focus on supporting housing affordability?

Anthony: We seek to operate and maintain lease

rates within CMHC’s well-regarded measure for housing affordability, which suggests that housing is affordable when rental costs do not exceed 30 per cent of a household’s before-tax income. At Avenue Living, the average rent-to- income for our residents is estimated to be actively below the threshold of CMHC’s affordability construct, at about 23 per cent of household income. We select our assets and invest within them while ensuring


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we maintain the affordability construct for our customer segmentation, without altering the demographic profile in that community.

RHB: You also seem to focus on

environmental sustainability in your properties. Please elaborate.

Anthony: Environmental, social, and

corporate governance has become an integral part of our operational focus. We recognize that we can choose to install upgrades that both reduce our environmental footprint and still provide our residents with safe, comfortable, and efficient housing. Capital improvements, like better insulation or more efficient heating systems, have benefits for all of us. Our partnership with Canadian Infrastructure Bank is a great example of how we are putting this strategy into action.

RHB: How would you describe your investment philosophy?

Anthony: We don’t rely on market influences to

drive our performance. Rather, we rely on our own proprietary operations to perform. Most of our years have been spent in low-growth and countercyclical economic environments, yet we have performed significantly well over these years. While we have experienced considerable growth, our philosophy and investment strategy remain unchanged. Despite the many dynamic changes in the economic cycle and other challenges along the way, we strive to continually examine and refine our investment practices, seeking to improve our residents’ experience, while also building upon our sustainability goals.

RHB: How have you managed to overcome the

various challenges of the rental housing industry?

Anthony: Over the past 16 years, through a

variety of economic cycles, as well as the recent global macroeconomic and pandemic challenges, we have managed to thrive by focusing on one clear objective: providing safe, well-managed workforce housing at affordable prices. Families want to live in a place they can proudly call home. The many challenges we have experienced have reinforced the need to maintain our focus on our strategy and residents. As a result, the demand for our brand of workforce housing from residents has remained robust and our strategy has demonstrated itself to be defensible, despite these challenges.

RHB: What are your future short-term and longterm plans?

Anthony: We believe the pursuit of sustainable

business practices, whether it is focused on environmental, social, or corporate governance, is essential to continuous improvement. While we have about 50 per cent of our multi-family portfolio currently committed to the CIB program, we anticipate there may be opportunities of varying degrees in the future given our long-hold investment horizon, to apply the knowledge and learnings from our present efforts with CIB to properties within the remaining 50 per cent of our current multi-family portfolio, as well as to new properties that we may potentially acquire in the future. Outside of this significant opportunity with CIB to drive change in the multi-family universe, we are excited to continue exploring potential initiatives and opportunities within our self-storage and commercial portfolios, including many similar applications, such as energy and HVAC retrofits, water conservation, waste management, recycling, and potential renewable energy applications.

RHB: Thank you for your time.

22 | July 2022


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Frank Leone: Portrait of a rental property owner

By David Gargaro

Our readers are truly dedicated to the rental housing industry… and our magazine! We often get comments and feedback from subscribers—and people who just happened to come across RHB Magazine—on the articles and information we publish in print and on the website. They want to let us know what they think about the issues, what they like, and what they don’t. And sometimes they point out our mistakes. Back in 2018, RHB Magazine published a photo of upside-down balconies on the front page of the Regional Association Voice (RAV) section. This error remained in the magazine for four years. No one on our staff noticed. Neither did our readers. But Frank Leone, president of Lenmar Ltd., noticed this photographic anomaly. He reached out to inform us that we had published a photo upside down in the RAV section of the magazine. Suffice it to say, we were all surprised. And thanks to Leone’s dedication and attention to detail, we’ve corrected the photo, so the balconies will be facing the right way from now on.

Why we wrote this article We could have simply thanked Leone for pointing out this mistake and left it at that. However, this initial interaction led to a number of telephone conversations. We learned a lot about him as an individual and as a business owner. We believe that his story is worth telling, and has value beyond pointing out a photographic faux pas. Lenmar Ltd. is representative of the majority of our readership and Canada’s rental housing

24 | July 2022

industry. It is not a major corporation with thousands of rental units across Canada. Leone was the sole owner of one multi-unit residential rental property. He raised a family and derived most of his income from rent. He dealt with the same issues that affect many small rental property owners, from rising utility bills and maintenance costs to collecting rent from tenants who could not (or would not) pay.



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

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

Hot Topics:

Hot Topics:

HDAA announces three new members of the Board of Directors, and highlights potential issues impacting on the rental housing industry in the upcoming Ontario election occurring in June. pg. 45

LPMA explains its Property Management 101 course, as well as how rental housing providers are coping with the rampant supply chain interruptions. pg. 49

EOLO warns of the likely expansion of green bins into Ottawa’s multi-residential sector, and about a new City vacant unit tax, which will be charged in 2023 based on long vacancies in 2022. pg. 49

WRAMA reports news on the municipal elections for Waterloo Region, its cities and Guelph, and on the Landlord and Tenant Board Townhall held on July 6, with the LTB’s projection for when the backlog will be cleared. pg. 53

LPMA promotes its online open forums that help small landlords learn from others, and presents warning signs to help landlords identify structural issues before they become critical. pg 53

HDAA provides an update on Hamilton’s vacant home tax, the municipal election in Hamilton, and HDAA’s recent dinner meeting, hearing from Tony Irwin, FRPO CEO. pg. 57

WRAMA describes the boom in the Waterloo Region rental housing market using data from Zumper.com and CMHC’s Rental Market surveys. pg. 57

EOLO reports on the candidates for mayor in the Ottawa municipal election, and discusses the pros and cons of inclusionary zoning and Ottawa’s steps toward adopting it in major transit station areas. pg. 61

The Member Associations

The Member Associations

Leone has been a long-time subscriber of RHB Magazine. He reads every word of it. He told us he has gained valuable insight from the content we’ve published and the experts we’ve quoted. He has also voiced his opinions on our magazine content on more than one occasion. He deserves recognition for his eagle eyes and dedication—to our magazine and the rental housing industry. That’s why we’re writing about him. We believe he represents our readership and the members of the rental housing industry.

Background Frank Leone was born in Milan, Italy. After studying and graduating from university, he emigrated to Canada in 1957. His first job involved working as a linotype operator for Corriere Canadese, an Italian-Canadian newspaper based in Toronto. He had worked in this role when he lived in Italy, so his experience and Italian heritage made him a natural fit for the position. By coincidence, the newspaper regularly featured advertisements on how to earn a living from buying and selling real estate, which piqued his interest in this field. About a year later, Leone took a position in real estate sales with Mann & Martel Real Estate, one of the largest residential real estate firms in North America. He then obtained his real estate broker’s

26 | July 2022

license and joined Royal LePage—which absorbed Mann & Martel when it was Royal Trust—as an associate broker in its industrial commercial division. He obviously enjoyed the work and was good at his job, as he spent over 35 years with the organization. In 1961, Leone met his future wife at the bank. They dated for a while until she moved back to Italy with her family. However, he decided to follow her to Italy to win her hand. His efforts paid off, as they were married in 1965 and later returned to Canada. The Leones have been together ever since, raising a son and daughter, who also blessed them with grandchildren. Believe it or not, Leone had interests outside of real estate. He discovered a love for skiing, perhaps due to the Canadian winters. In 1970, he earned a level 3 instructor’s license as a ski instructor, and spent several winters teaching people to ski at Blue Mountain. Unfortunately, Leone had a stroke about 10 years ago. While this hampered his ability to run his rental property business, he has managed to keep going until this year, when he decided to sell his building. Leone is working on restoring his health and hopes to return to skiing one day. He still has his wits and keen eye, as evident in his ability to spot the upside-down photo in the magazine.


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Branching out on his own Leone dabbled in real estate investing while working at Royal LePage. In 1970, he purchased a multi-unit property located near Keele and Lawrence in Toronto. He converted the building into a condominium with the goal of increasing its value. He later sold the property for a profit. Although it was a successful investment, Leone focused on helping others to buy and sell properties during his time as an associate broker. In 1995, Leone left Royal LePage to start his own company, Lenmar Ltd. His goal was to invest in income-generating rental properties. He met an individual who owned a plumbing business and wanted to form a partnership to purchase an investment rental property. Leone found a 55-unit rental property located in downtown Brampton, which he thought was a great deal and a solid investment opportunity. However, the individual balked at the offer because he did not like the location of the building. Leone did not have the financial resources to make the purchase alone, which is why he had planned to partner with someone to buy the multiunit rental property. Rather than miss out on the opportunity, Leone borrowed money from his mother in Italy to help fund the purchase. It turned out to be a solid investment, as he owned the multi-unit rental property in Brampton for more than 25 years. “Being involved in the sales of income-producing properties, I couldn’t help realizing such a great opportunity to own a piece of the action, and become myself a property owner,” said Leone. “I always believed that in life, first you work hard to create an income, and after, the income looks after you.”

Ownership philosophy Leone adamantly believed in the value of his tenants. He was committed to treating them with sincerity and transparency. Fair treatment meant having a full building and low turnover. From the beginning, he believed that a fully rented building would produce better financially than a building with high rents and high turnover rates. Leone made an agreement with his management company to always charge lower-than-market rental rates. This ensured his building remained full and steadily producing rental income. This approach enabled him to choose the most qualified tenants, as his building’s rent levels attracted a lot of prospective renters. Those tenants paid their rents without fail and stayed for years.

28 | July 2022

“Be aware of tenants’ needs and keep an eye on where you can make improvements in your building,” said Frank. “Be sure to meet your renters’ expectations and treat them like family. You’ll keep them for a long time.”

Making the decision to sell In the March/April 2022 issue of RHB Magazine, LPMA described the challenges that rental property owners have with achieving regular cash flows, particularly when they purchase high-priced rental properties. Sean McNally, a rental property owner with a full-time career, spoke about the challenges of deriving value from owning rental property. According to the article and McNally, “…many buyers are banking on the value of a property increasing over time. But if landlords hold their real estate for the long term, they might not realize that return until decades later.” These words resonated with Leone. While his building was still earning a profit, he realized that escalating energy costs and government legislation were creating a less than desirable environment compared to other investment opportunities. He did not want to continue the struggle of owning a rental property for the rest of his life just to provide his children with an inheritance when he dies. Leone also had significant caretaking expenses to consider, as he was working toward regaining his health. “It’s better to enjoy the value that the building provided while I am alive rather than allow others to enjoy your work after you’re dead,” said Leone. “Keeping the building means making a modest profit, but selling the building will provide greater returns and allow me to enjoy my life and use the proceeds for other purposes.” Leone sold his building earlier this year. He remains interested in the rental housing industry, applying his knowledge to pursue other investments. He has been investigating the potential of hydrogen heating technology in rental properties, which he believes can help with addressing the high costs associated with heating and cooling multi-unit buildings. And, of course, he continues to read RHB Magazine to stay informed on what is happening in the industry.

The last word “If you have a goal, always stick to it, and you’ll be successful,” said Leone.


CFAA RENTAL HOUSING CONFERENCE 2023

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Requirement to report elevator outages via portal takes effect on July 1 By Phil Staite, President, Quality Allied Elevator and President, Canadian Elevator Contractors Association

Effective July 1, 2022, owners and licensees of elevators in residential buildings and long-term care homes in Ontario are required to report any elevator outages that last 48 hours or longer through the Technical Standards and Safety Authority (TSSA) portal. This report must be completed within 30 days of the elevator being put back into operation. One key element of this new legislation is that the TSSA will include elevator outages on a list that will be made available to the public. Ontario is the only jurisdiction in the world that has this requirement. How did we get here? In March 2017, MPP Han Dong (a backbencher for the Ontario Liberal Party) tabled a private members’ bill entitled Bill 109, Reliable Elevator Act, 2017. It requires an elevator owner or licensee to ensure that, when an elevator breaks down, it is repaired within a set time period: 14 days for a residential building and seven days for a longterm care building. All information on elevator outages was anecdotal. No one conducted research on the performance levels of elevators in Ontario or whether it was possible to ensure elevators could be repaired within the given time frame. The media picked up the story immediately. Who doesn’t want elevators to operate consistently and not be impaired by major breakdowns? Because an election was on the horizon, all the provincial parties agreed that all elevators in Ontario should be functional all the time. Note: Han Dong lost his seat in Trinity Spadina in the recent provincial election.

Cunningham report on elevator availability Justice Douglas Cunningham was engaged to author an independent study on elevator availability. The report is 68 pages long and details many problems with trying to define the public

30 | July 2022

perception of reliable elevators. The report also mentions that there is no provincial public data on how long elevators are out of service. Per the Cunningham report, The National Elevator and Escalator Association—whose member companies service approximately 75 per cent of the elevators in Ontario—provided data demonstrating that elevators in Ontario are functionally operational 99 per cent of the time. The Cunningham report stated, “Industry data tells us 98% of elevators are returned to service


within 24 hours… Elevators out of service for over 24 hours typically require rare parts, mechanic expertise or major alteration or repair.” Based on these statistics, there is no major issue with elevator availability in Ontario. However, the report did not change the MPPs’ opinions of Ontario’s elevator situation. Bill 109 was passed in May 2018, but not proclaimed until 2021.

What does this mean? There are many reasons why an elevator would be out of service for more than 48 hours. They include (but are not limited to): • Lack of availability of parts • Water damage to be assessed by the insurance company • Major repairs that take longer than 48 hours • Modernization of the elevators • Approval of work outside of the elevator maintenance contract Many buildings in Ontario have very old elevators whose components are wearing out or obsolete. In some cases, buildings were designed with fewer elevators than they should have based on the tenant population, which puts additional stress on the equipment. Some properties have

more residents or tenants than were intended in the original design. In many cases, units designed for single families have multiple families living in them. Therefore, the elevators get used a lot more than originally designed, which causes elevator components to wear out faster. Nobody knows how the Ontario government will use the data on elevator breakdowns. Will they impose more restrictive legislation? Bill 109 was passed purely for political reasons, not for practical purposes. It was not written to improve elevator performance but rather to point out buildings with elevators that were out of service for a certain period of time. This data will be made available to the public. If people take the data out of context, will the information decrease the value of condominiums and multi-unit residential properties or decrease the rent prospective tenants will pay? The data does not compare the total uptime of elevators, so owners of buildings with well-run elevators will not benefit. All it does is make some buildings and their owners look bad because it sometimes takes more than 48 hours to repair their elevators. Ontario is the only jurisdiction in the world with this requirement. It’s unnecessary legislation that will only have a negative impact on building owners.

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JULY 2022

The risk of a federal tax on “excessive rent increases” By John Dickie, CFAA President

As noted in the last issue of National Outlook, the federal government has now acknowledged that the main problem with the housing system in Canada is a lack of supply. That is largely a problem created by delays and restrictions in the provincial and municipal systems of planning approvals, and the government costs imposed on housing development and rental housing operations at all levels. At the same time, the federal government continues to respond to housing advocates who use flawed evidence and information to allege that rental housing providers and investors routinely use unfair practice to evict tenants and raise rents. In fact, the government’s proposed actions risk worsening the supply and affordability problems they have pledged to address.

Taxing “excessive” rent increases on turnover The government is conducting “a federal review of housing as an asset class, in order to better understand the role of large corporate players in the market and the impact on Canadian renters and homeowners.” The review will consider possible solutions to the problems it discovers. One promised “solution”, that will be incorporated into the review, is to require landlords to disclose in their income tax filings the rent they receive pre- and post-renovation, and pay a proportional surtax if the increase in rent is “excessive”. That would be highly problematic for a multitude of reasons, including • Taking away much of the incentive to improve rental buildings • Taking away a critical source of funds used to improve rental buildings, including money used to pay for energy efficiency upgrades which support GHG reductions • The administrative burden on rental housing providers to report the rental and turnover status of individual unit on their tax returns • Reducing the attractiveness of new rental construction, thereby reducing new rental housing supply • Federal intrusion into provincial jurisdiction

Part of a broader problem The issue is part of a broader problem. There are a significant number of areas in which measures adopted to promote housing affordability in the short term stand in the way of housing affordability in the medium or long term. Let’s look at the move-up effect, and then at two such measures. The move-up effect - the connection between new supply and affordability Most new, market rental construction does not (directly) provide rental units at rents affordable to low-income households. However, new construction does indirectly help people who need to pay lower rents. continued on page 40

rentalhousingbusiness.ca | 35


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NATIONAL OUTLOOK

CONGRATULATIONS The annual CFAA Rental Housing Awards recognizes excellence among rental housing providers, employees and suppliers across Canada. On Tuesday, May 10, CFAA recognized the winners of this year's Awards Program at the CFAA Awards Dinner in downtown Toronto. Congratulations to all the finalists and winners of the CFAA Rental Housing Awards 2022! CFAA thanks the judges, everyone who entered the Award s Program, and the Awards Presentation Sponsors. For more information about CFAA's Awards Program, contact awards@cfaa-fcapi.org Rental Housing Provider of the Year Over 10,000 units

Rental Housing Provider of the Year Under 10,000 units

Skyline Group of Companies

BentallGreenOak

Supplier Member of the Year

New Product or Service of the Year

Yardi

Yuhu Resident Mobile

Association Achievement of the Year

Marketing Program Excellence of the Year Community Engagement

Saskatchewan Landlord Association

Moving Stories Campaign Hazelview Properties

Marketing Program Excellence of the Year Lease-Up Beacon Starlight Investments

Renovation of the Year Exterior Renovation

91 Cosburn Avenue, Toronto, ON Starlight Investments

rentalhousingbusiness.ca | 37


JULY 2022

Renovation of the Year Unit Renovation

44 Jackes Avenue, Toronto, ON QuadReal Property Group

Heron Gate Recreation Centre, Ottawa, ON Hazelview Properties

Renovation of the Year Full Building Renovation

Rental Development of the Year Low-Rise

1970 Fowler Drive, Mississauga, ON Starlight Investments

Carrington View Skyline Properties

Rental Development of the Year Mid-Rise

Rental Development of the Year High-Rise

Tippett Park Shiplake Properties

E18HTEEN KG Group

Property Manager of the Year Under 900 units

Property Manager of the Year Over 900 units

Jamie Weinhardt Sifton Properties Limited

Samuel Bergeron Canadian Apartment Properties REIT

Off-Site Employee of the Year

Resident Manager of the Year

Ildi Damjanschitz Bluestone Properties

38 | July 2022

Renovation of the Year Amenity Space

Vanessa Sullivan QuadReal Property Group

On-Site Employee of the Year

On-Site Employee of the Year

Co-winner Shantell Bankasingh Hazelview Properties

Co-winner Andrew Davis Bluestone Properties


NATIONAL OUTLOOK CFAA thanks all CFAA-RHC 2022 Sponsors Principal Partner

Strategic Partner

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Gold Partners

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Other Sponsors

Darren and Krista Henry

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rentalhousingbusiness.ca | 39


JULY 2022

CFAA-RHC 2022 – Thank you to all participants!

CFAA Rental Housing Conference 2022 took place from May 9 to 11 at the Hyatt Regency in downtown Toronto. Attendees were overjoyed to reconnect with industry colleagues. Attendees hailed the education sessions as “timely” and “relevant” “educating and engaging”. The conference featured 23 sessions, including Benjamin Tal’s signature economic update and an address from the new CMHC President, Ms. Romy Bowers who was refreshingly engaged with the rental housing industry, and forthright in her remarks. CFAA thanks all the speakers and moderators: Asquith Allen Jeremiah Allen Jacquelyn Baur Ryan Bekar Hunter Boucher Renee Bourgon Romy Bowers Kris Boyce Ruth Buckle Dennis Burnside Blair Chandler Renee Charles Mike Chopowick Andrew Coates Deborah Cohen Randy Daiter

Deborah Diaz Dan Dixon Patty Evans Leilani Farha Rob Felt Kris Figurski Murtaza Haider Darren Henry David Horwood Alan Ibrahim Tony Irwin Joanna Jackson Jason Jagpal David Janowski Denis Jones Jon Juffs

Hugh Kolias Sam Kolias Tej Kullar John Loubser Andrew Macallum Roberta MacLean Trish MacPherson Ramona Maraj George Marine Trevor McCann Colleen McCarville Shaun McCracken Tanya McCuen Brandi McIlvenny Peter Mills Hanna Mlodzianowska

Karly Neath-Tavares Evan Pawliuk Andrew Pride Michael Richard Richard Robins Andrea Rocheleau BJ Santavy Benjamin Tal Krish Vadivale Parisa Vafaei Edward Whitehead Corey Wilson Fay Yachetti Sarah Yusyp

The risk of a federal tax on “excessive rent increases” continued from page 35

When new, expensive housing comes onto the market, people who are well-off buy it or rent it, and usually move into it. Let’s call the occupants of a new unit, household A. The unit they left is usually less expensive. It is then rented or bought by household B. Household B moves out of its previous unit, which is usually less expensive than the unit household B moves into. Then household C moves into household B’s former unit, and so on, until vacancies are created in units with moderate and then low rents. This is called the “move up effect” or filtering. It has been recognized and studied in the housing market for 100 years. (The move up effect does not depend on the passage of much time; moves between units may not even take a month, since most rental providers seek to rent their units back-to-back.) In recent decades, the move up effect has not been working as well as it did. Housing economists believe that is because the housing supply chain has become gummed up with ever-increasing

IF YOU WANT TO HELP CFAA FIGHT THE PROPOSED NEW FEDERAL TAX, THEN: Sign up to receive CFAA’s e-Newsletter Volunteer for a working group to find solutions Join CFAA as a direct member Make a one-time donation to CFAA E-mail admin@cfaa-fcapi.org

40| | July July2022 2022 40

rentalhousingbusiness.ca | |40 40 rentalhousingbusiness.ca


NATIONAL OUTLOOK municipal planning restrictions and delays, and ever-increasing government costs. For a given amount of growth in housing demand, less new housing is being supplied, driving up the price or rent of all housing.

Counterproductive measures Governments do not like to recognize and address their role in creating problems. Instead, they prefer to take direct measures to address the symptoms. Unfortunately, the direct measures often have side effects that work in the opposite direction to the main stated policy goal. Rent control is an obvious example. It is enacted to reduce rent increases. But by doing that, it discourages new rental construction. Inclusionary Zoning (IZ) is another policy with serious and negative indirect effects. Forcing some units to be priced below market, drives up the cost of development, thus reducing the amount of new development, and raising the market price or rent of what is developed. See page 62, for a detailed explanation.

Conclusion The correlation between rent increases and renovation costs appears to be misunderstood by the federal government. Consequently, they could take action which would make the fundamental issues of housing affordability and supply worse, rather than better. A new tax on improvements to the rental stock would reduce rental building improvements, reduce building quality, shorten lifespans of the aging rental building supply, and drive up the price of what good rental supply is available. Those are the last things Canada needs. CFAA is fighting this hard.

rentalhousingbusiness.ca | 41


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Congratulations to Premier Ford and the Progressive Conservatives On June 2, Premier Doug Ford and the Progressive Conservative Party of Ontario won a second consecutive majority government. They also won a mandate to continue moving the province forward on a number of important issues that will affect us today and in the future. FRPO congratulates Steve Clark, the Minister of Municipal Affairs and Housing, and Doug Downey, the Attorney General, on their respective re-appointments. We also applaud Premier Ford for appointing a new Associate Minister of Housing and congratulate Michael Parsa on his promotion to Cabinet. We look forward to continuing FRPO’s work with the Ontario government on tackling the housing supply crisis and the rental housing landscape. We also hope the government is able to strike the right balance between strong consumer protection for residents and a well-functioning industry for rental housing providers. Despite the challenging times and unprecedented obstacles that everyone has faced during the global pandemic, real progress has been made under the leadership of Minister Clark. Starting with the 2019 More Homes, More Choice Act, forming the Ontario Housing Affordability Task Force, and beginning to act on its recommendations through the More Homes for Everyone Act 2022, Minister Clark has worked closely with stakeholders and has received advice from industry experts to find real solutions to closing Ontario’s housing supply gap. We look forward to continuing that cooperation with Minister Clark and the provincial government.

Addressing the rental housing supply It is common knowledge that Ontario has a housing crisis. Housing prices have risen to unexpected levels and there is a severe shortage of affordable housing. This applies to homes and rental properties. While there have been efforts to address these concerns, a lot more needs to be done. One solution is to greatly increase the rental supply. Ontario had 13,000 rental starts in 2021. While this is the highest number of new rental units over the last 30 years, it is still a fraction of what the province needs. According to a recent study done by FRPO, which was conducted in partnership with Urbanation, more than 300,000 rental units are required (in addition to the current supply forecast) to help fill the rental supply gap over the next 10 years. This includes a 10-year accumulated deficit of 66,500 units and a deficit forecast of 236,000 units over the next 10 years. This represents an increase from the 200,000unit deficit projection in 2020.

rentalhousingbusiness.ca | 43


According to a new survey conducted by Canada Life, nearly one-half of Canadian renters plan to continue renting indefinitely due to the continuing housing affordability crisis. Also, an Altus Group report commissioned by FRPO showed that average rents for purpose-built rental units in six of seven communities reviewed met the provincial definition of affordable housing, which is below 30 per cent of household income for low-to-moderate income-earning households with rents 40 to 60 per cent lower than the monthly cost of ownership of similar units (two-bedroom apartment). It is clear that rental housing should be a key priority in any strategy designed to tackle the housing supply crisis. As the government begins its second term, FRPO renews its call for the implementation of the Housing Affordability Task Force recommendations, as well as FRPO’s Ontario Rental Housing Strategy. Measures like as-of-right zoning, density bonuses, a provincial facilitator for purpose-built rental projects, and reforms to government fees and charges that will help stimulate supply by making more rental projects economically viable. FRPO will also continue to engage with the provincial government on the need for more resources at the Landlord and Tenant Board (LTB) to clear backlogs and for process improvements that provide greater efficiency and fairness to rental housing providers and residents.

Ontario caps 2023 rent increase guideline below inflation at 2.5 per cent Inflation is hitting everyone hard, including rental property owners. And the government is making it more difficult to cover rental property expenses by capping rent increases. Ontario’s rent increase guideline for 2023 is 2.5 per cent, which is below the current rate of inflation. The rent increase guideline is the maximum amount that a rental property owner can increase rent during the year for most tenants without first

44 | July 2022

getting approval from the LTB. This guideline is based on Ontario’s Consumer Price Index (CPI), which is a measure of inflation. Statistics Canada calculates this amount monthly using data based on economic conditions over the past year. If rents were tied to the recent inflation rate, the 2023 rent increase guideline would be 5.3 per cent. However, the provincial government capped the guideline to help protect tenants from significant rent increases. “As Ontario families face the rising cost of living, our government is providing stability and predictability to the vast majority of tenants by capping the rent increase guideline below inflation at 2.5 per cent,” said Steve Clark, Minister of Municipal Affairs and Housing. “We continue to look for ways to make homes more attainable for hardworking Ontarians, while making it easier to build more houses and rental units to address the ongoing supply crisis.” The guideline applies to most rental properties covered by the Residential Tenancies Act. It does not apply to rental units that were first occupied after November 15, 2018, vacant residential units, community housing, long-term care homes or commercial properties. Rental property owners can only increase the rent if they use the proper documentation to provide tenants with at least 90 days’ written notice. They must also wait at least 12 months from the first day of the tenancy or the last rent increase.

FRPO is hosting live events again FRPO has been the voice of Ontario’s rental housing industry and the leading advocate for quality rental housing since 1985. For more than 30 years, it has led the rental housing industry in Ontario, offering public advocacy, representation and promotion, industry research, standards and best practices, education, and training, as well as hosting marquee industry events and awards. COVID-19 led FRPO and other industry


associations to pivot to in-person gatherings. Over the past couple of years, they’ve done an excellent job of keeping members informed and involved through webinars and virtual events. Fortunately, FRPO is now able to host live events again. Two of its most popular events that will be returning in 2022 are the FRPO Charity Golf Classic and the Women in Rental Housing Luncheon. David Gargaro, editor of RHB Magazine, sat down with Lynzi Michal, FRPO’s Director of Membership and Marketing, to discuss its upcoming events. David: The FRPO Charity Golf Classic is back this year. Can you tell me more about it? Lynzi: The 2022 FRPO Charity Golf Classic will take place on Monday, July 18 at the Country Club located in Woodbridge. This year’s event sold out faster than ever, and we appreciate our members’ support. Over the last 14 years, FRPO and our members have raised over $750,000 through this event. David: What can members expect from the event? Lynzi: Attendees will enjoy a fun-filled day of golf and networking. Registration begins at 7:30 am and there’s a shotgun start at 9:00 am. A cocktail reception and dinner will follow the conclusion of golf. Registration includes one raffle ticket per player. Additional raffle tickets will be made available for sale. Attendees will be able to participate in a silent auction and win various prizes throughout the tournament and dinner. David: What charity does the golf tournament support? Lynzi: As many know, this event helps raise money for our charitable partner, Interval House, Canada’s first centre for women survivors of intimate partner violence and their children. It provides a safe haven for women and children escaping abuse and a home where they can heal their physical and emotional wounds and rebuild their lives. Interval House’s Building Economic SelfSufficiency (BESS) program connects women with

the tools to rebuild and transform their lives after abuse, providing access to education, professional skills training, life skills workshops, financial and housing assistance, job opportunities, professional wardrobe options, and counselling. David: That sounds like a great cause. I see that FRPO is also bringing back the Women in Rental Housing Luncheon. What can you tell me about this event? Lynzi: FRPO is pleased to host the seventh Annual Women in Rental Housing Luncheon, which will take place on August 22 at the Old Mill. The event has been on hiatus since 2019 and we are glad to bring it back. David: What should FRPO’s female members know about the luncheon? Lynzi: The luncheon brings together women working in the rental housing industry to motivate, inspire, and share their experiences. FRPO supports the advancement of women and highlights their stories for the next generation of leaders. The luncheon is sponsored by Absolute Ventilation. A buffet lunch is included in the cost of registration. David: Why should FRPO members attend these events? Lynzi: We encourage members to participate in events as it’s a great way to meet others in the industry, as well as share ideas or find synergies. In the absence of in-person events since the pandemic, many of our members are looking for these opportunities to network. David: Thanks for your time! If you are a FRPO member and would like to learn more about these events, please visit https://frpo. org/events/index.html.

Ontario’s leading advocate for quality rental housing FRPO is the largest association in Ontario representing those who own, manage, build and finance residential rental properties. For membership inquiries please contact Lynzi Michal, Director, Membership & Marketing Federation of Rental-housing Providers of Ontario 20 Upjohn Road, Suite 105 Toronto M3B 2V9 416-385-1100 x 22 lmichal@frpo.org www.frpo.org

rentalhousingbusiness.ca | 45


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

Hot Topics: LPMA explains its Property Management 101 course, as well as how rental housing providers are coping with the rampant supply chain interruptions. pg. 49 WRAMA reports news on the municipal elections for Waterloo Region, its cities and Guelph, and on the Landlord and Tenant Board Townhall held on July 6, with the LTB’s projection for when the backlog will be cleared. pg. 53 HDAA provides an update on Hamilton’s vacant home tax, the municipal election in Hamilton, and HDAA’s recent dinner meeting, hearing from Tony Irwin, FRPO CEO. pg. 57 EOLO reports on the candidates for mayor in the Ottawa municipal election, and discusses the pros and cons of inclusionary zoning and Ottawa’s steps toward adopting it in major transit station areas. pg. 61

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PRESIDENT’S MESSAGE Opportunities to network and learn fill LPMA’s calendar LPMA’s annual golf tournament is fast approaching. September 12 is the date. Registration and sponsorships are open on our website at www.lpma.ca. Join us for a shotgun start at 9 a.m. and a fun-filled day ending with a BBQ lunch. The member portal is now live. If you haven’t received your access or want to join our membership, register online or call Tina at 519-672-6999. In-person member meetings are starting again this fall. We’re excited to have everyone back together for networking and learning. Watch our website for dates and topics.

Shane Haskell

LPMA is bringing back our popular Property Management 101 course in November during two great evenings of learning. Register on our website. Don’t worry—the course will be available for purchase on our website following the event. Our popular Christmas party is booked for December 6 at the Hellenic Centre. Watch for more details. Until next time, be well.

- Shane Haskell, President, LPMA

MASTERING THE BASICS WITH PROPERTY Small landlords and property managers will have an opportunity to learn new skills and expand existing ones during the Property Management 101 seminar series in November. Kristin Ley, chair of LPMA’s education committee, said PM 101 is intended to ensure that rental housing providers are informed about the basics. “We recognize that the better educated those in this industry are, the better it is for the industry Kristin Ley overall.” PM 101 and 201 were first created in 2009 and ran for 10 years as a two-day course designed to help landlords operate their rental properties professionally. Ley said new landlords have relied on the course to increase their knowledge and property management companies have used it to train their site staff. The seminar series is being brought back after members of the education committee identified a need for it, Ley said. Recent changes to the

MANAGEMENT 101 Residential Tenancies Act (RTA), in particular, spurred the decision after the legislature introduced Bill 184, which aims to make the hearing system fairer and more efficient for users. Ley said the committee wanted to ensure that landlords and property managers were aware of the amendments and were complying with them. PM 101 and 201 will be combined and structured into five modules, offered live in November. The modules will be divided into two days and presented two weeks apart. The material from each module will then be posted on the member portal of LPMA’s website, enabling members to download it, watch it on their own time, and complete the course. “The material that will be posted on the portal will be more like a course with different components that a property manager or a landlord can purchase and complete one module at a time or as the whole series,” Ley said. Each module will represent one part in the life of a tenancy. The first will cover leasing, including how to screen potential tenants. Participants will learn how to use social media and unredacted copies of decisions from the Landlord and Tenant Board to investigate rental applicants.

rentalhousingbusiness.ca | 49


“We’re planning to discuss some of those new parts of screening prospective tenants,” Ley said. The second module will focus on rent rules, including guidelines for increasing the rent and which forms need to be used. The third will deal with maintenance, repairs, and fire safety, including best practices and what the RTA requires of landlords. The fourth will explore the process of collecting rent arrears and paid utilities from current or former tenants. Collecting paid utilities refers to tenants’ failure to pay the utilities as required by their lease and recovery of the utilities that landlords paid for their tenants. Until September 2021, landlords’ only option was to sue them in Small Claims Court. “But now the Board has jurisdiction,” Ley said. “We want to make sure that our members are fully up to date with respect to the processes before the Board and recovering paid utilities, which comes up a lot for the smaller property managers.” The fifth module will cover enforcing the rules and regulations that are part of the lease. Ley said a certificate of completion will be given to participants who complete a module. A separate certificate will be awarded to those who complete the entire course. “We think that will be helpful for property managers and landlords to be able to say that they’ve completed this course. They can include it on their resume or information they share with tenants to show they take their role as a housing provider seriously,” Ley said. LANDLORDS’ INGENUITY IS KEY TO COPING WITH S U P P LY C H A I N D I S R U P T I O N S Supply chain management issues are adversely affecting landlords of all sizes, from large property management companies to small operators. As prices continue to rise, and the availability of goods declines, property owners are finding it more difficult to provide service to tenants. Landlords are further challenged by their legal responsibilities to residents, which require them to keep their buildings in good working order under the Residential Tenancies Act. For many property owners, that means putting basic maintenance ahead of capital projects, said Stephanie Marentette, a London real estate lawyer. “My biggest piece of advice would be to prioritize. Before embarking on larger capital Stephanie Marentette projects, make sure that there’s enough (money) to meet the needs under the Residential Tenancies Act legislation. Where a landlord is going to get in the most trouble is a failure to discharge duties under that legislation.” Marentette said many capital projects are cost prohibitive because of escalating prices for even the most basic materials. For example, lumber and asphalt, a petroleum product, have increased drastically in price. Marentette said many landlords will have to delay building decks or resurfacing parking areas so they can allocate those resources to more immediate concerns. “If you want to do any sort of major capital repairs at all, you can expect to a) pay a lot more and b) wait a substantially longer time for parts,” Marentette said. In particular, long wait times for appliances, and the parts required to repair them, are becoming common. That’s also true of the parts for HVAC systems and elevators. Even if goods are available, there are significant delays in transporting them, Marentette said. Rising fuel costs have led many companies to add the cost of shipping to the price of the goods they sell.

50 | July 2022


“That’s another thing that can cause the prices to go up. It makes the cost of your average consumer product very unstable, which is a little bit frightening,” Marentette noted. “Your average landlord who’s not a major corporation is going to really struggle with keeping up with capital repairs.” Current supply chain management problems can be traced to the outbreak of COVID-19. Employees in the manufacturing sector became ill, forcing plants to close until outbreaks were under control. Truck drivers also fell ill and were unable to transport goods, Marentette said. Cross-border shipping was delayed as a result of truckers not being vaccinated and by anti-vaccination blockades. The drastic rise in fuel costs, sparked by Russia’s war in Ukraine, increased shipping costs and delayed transporting goods to consumers. “I don’t think anyone could have reasonably anticipated just how bad this was going to be,” Marentette said. Kim McEllistrum, operations manager of Guelph residential rentals for Sifton Properties, said delays in the arrival of appliances, as well as electrical parts and panels, hit the company hard early in the pandemic. “Stock was just totally Kim McEllistrum unachievable. We could not find stock,” she recalled. Before the pandemic, Sifton negotiated prices from its suppliers and was able to order in bulk based on the number of apartment turnovers and stock that was needed for the year. But with fewer tenants giving notice, the company wasn’t able to commit to bulk purchasing. In addition, the shortage of stock caused delays in the company’s same day or next day customer service model. As a result of many factors, Sifton was forced to find a new way of managing its supply chains.

McEllistrum said the company responded by prioritizing its projects. It also secured stock based on the average numbers of apartment turnovers in a year and to replace aging appliances as part of its tenant retention program. Sifton’s offices in London, Guelph, and Brantford formed a maintenance collaborative and began sourcing multiple new suppliers from within those cities. Shipping goods shorter distances has enabled Sifton to pay less for transportation and has also decreased its carbon footprint, McEllistrum said. The company now orders more than it needs as back-up and houses the overflow in shipping containers. Sifton went from using one brand of appliance before the pandemic to now stocking parts for four or five brands. However, inflation and the company’s inability to commit to bulk purchasing has meant paying higher prices for stock that is available locally, McEllistrum said. “They (prices) are still going up and we don’t know what the future holds. Now it’s about sourcing out local more than ever.” She advises small landlords and property management companies to review their current practices, to plan and budget early, and source additional contractors and suppliers. In particular, it’s important to assess which raw materials, such as petroleum and plastic products, affect the supply chains. Although it’s generally more expensive to buy goods made in Canada than abroad, McEllistrum believes prices will become more favourable as the manufacturing sector recovers. In the meantime, the only way for companies to survive current supply chain issues is to maintain a positive outlook and to stay updated. “It’s all doable. I think a lot of changes will happen in the world where we’ll make our own products in Canada and there will be less shipping. A lot of positives will come out of it. We’ll be more selfsufficient,” McEllistrum said.

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 Tina Potter. Ph: 519-672-6999 Web: www.LPMA.ca

rentalhousingbusiness.ca | 51


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PRESIDENT’S MESSAGE This issue reports on the municipal elections to take place on October 24 and the recent Townhall meeting held by the Landlord and Tenant Board (LTB), and recaps what WRAMA does. WRAMA welcomes new members and is seeking volunteers to advance the interests of rental housing providers in Waterloo Region and Guelph. Please see the note at the end of this section for all the benefits of membership and participation in WRAMA. It is also worthy to note the fundamental shift in the market over James Craig the past few months. With rising interest rates attempting to curb inflation, it is clear the values for multi-residential properties have changed. The effects of these changes are not yet known; however, we’ll keep an eye on this over the summer months and report back in the fall. We look forward to in-person education and networking events, hopefully starting in September. It will be great to see everyone again.

- James Craig, WRAMA President president@wrama.com

Municipal elections 2022 Across Ontario, residents will go to the polls on Monday, October 24 for the 2022 municipal elections. Candidates have until 2 pm on August 19 to register at the Clerk’s office for their municipality. No one can raise money for their campaign until they register.

Waterloo Region Waterloo Region consists of three cities and four townships. All seven mayors in the Region sit on regional council, along with four regional councillors from Kitchener, two from Waterloo, two from Cambridge, and the regional chair, who is elected directly. Thus, the regional council consists of 16 members. The regional council is responsible for waste collection, community housing, social assistance, major roads, and the Official Plan (which guides local zoning decisions). The cities and townships are responsible for zoning bylaws, building inspections and permits, most licensing, property standards and noise regulation, and tax billing and collection. Water and wastewater services are a shared responsibility. Karen Redman, the current regional chair of Waterloo, is seeking re-election for a second term after winning 62.4 per cent of the votes in 2018, winning a majority in all seven municipalities

within the Region. As of the date of writing, the other candidate for regional chair is Narine Dat Sookram. Sookram ran as the NDP candidate in Kitchener-Conestoga during last year’s federal election, receiving 11.7 per cent of the vote, while coming in a distant third to the Liberal and Conservative candidates. A handful of regional councillors have decided not to seek re-election. This includes Sean Strickland (Waterloo), Helen Jowett and Karl Kiefer (Cambridge), and Elizabeth Clarke (Kitchener). Now, let’s turn to the elections for the cities within Waterloo Region. City of Waterloo mayor Dave Jaworsky has announced he will not be seeking a third term in October. That means the new City of Waterloo mayor will join regional council. Berry Vrbanovic, who has been Kitchener’s mayor since 2014, has yet to announce his intent to run for re-election. In the 2018 election, he received 85.5 per cent of the vote. Cambridge mayor Kathryn McGarry will be seeking re-election for a second term. In the 2018 election, she received 47.7 per cent of the vote, defeating the incumbent mayor, who received 36.3 per cent. A few city councillors have announced they will not be seeking re-election to their respective city

rentalhousingbusiness.ca | 53


councils. In Waterloo, Angela Vieth, Jeff Henry, and Tenille Bonoguore are not seeking re-election, which will leave wards 3, 6, and 7 open. In Kitchener, Kelly Galloway-Sealock is not seeking reelection, which will leave ward 5 open. As of the date of writing, no current city councillors for Cambridge have announced their intention to not seek re-election.

Guelph Guelph is a single-tier municipality that operates separately from the County of Wellington that surrounds it. As of the date of writing, only Cam Guthrie is registered as a candidate for mayor of Guelph. Guthrie was elected mayor in 2014 with 50.7 per cent of the vote against two other candidates. He was re-elected in 2018 with 66.6 per cent of the vote against one other candidate. Guelph is divided into six wards, which each return two councillors, so city council consists of 12 councillors plus the mayor. Among the current councillors, the incumbents in wards 5 and 6 have registered to run for reelection, so the path to election may be more open in wards 1, 2, 3, and 4. In ward 4, neither incumbent has yet registered.

Landlord and Tenant Board Townhall On July 6, the Landlord and Tenant Board (LTB) held a virtual Townhall meeting to report on the progress of various issues and field questions. Here are some highlights of the meeting.

Service delivery The LTB recognizes that its service delivery is not nearly good enough; in particular, the delays to hearings are far too long. The LTB was backlogged before the pandemic struck, and then lost five months of hearings, which amounts to about 25,000 hearings out of a norm of 5,000 per month. Over the last 12 months, the LTB received 61,500 applications and resolved 61,800. That means the backlog is not getting worse, but it is also not getting better at this time. The LTB is hiring more adjudicators and back-office staff and expects to have those additional resources well trained and hard at work in the fall, resolving more cases than come in, starting around October. The LTB projects that it will eliminate the backlog by December 2023, making steady progress until then.

Process changes Even before the pandemic, the LTB was shifting to a more digital approach. The biggest change has been the adoption of the Tribunals Ontario Portal as the main system to process applications. L1, L2, T2, and T6 applications have been required to be filed electronically on the portal since December 2021. Those are the most common applications, covering non-payment of rent, other grounds for termination, tenants’ rights applications, and tenants’ maintenance applications. To date, 28,000 applications have been filed using the portal. Documents and evidence are also required to be filed on the portal, and notices of hearing are also delivered on the portal. As a second phase, coming soon, all other applications (except for AGIs and A4 to vary rent reductions) will also be required to be filed on the portal. Some months from now, AGIs and A4s will also be added to the portal. Like all complex technology projects, this transition “did not go entirely according to plan,” as the LTB admitted. Fixes to various bugs were needed, and more will occur when the other application types are added. Additional fixes being studied include providing for self-scheduling by applicants; more specific automatic notification that a document has been filed on the portal; ways to speed up the issuance of PINs to enable access to files on the portal; keeping hearings for applicants or representatives on the same date in the same hearing block; providing a search feature; and using regional hearing blocks. The LTB admits that they should have provided more user training sooner, but they are now rolling

54 | July 2022


out user training and more support services. The LTB expects to “be out of the old system” by December 2022. The LTB also expects to realize more efficiencies in the processing of applications and orders soon, and again when all applications are processed through the portal.

Conclusion Clearly, the government fell down in allowing the LTB backlog to grow in 2018, both before and after the provincial election in June 2018. That problem was then compounded by the pandemic. There are now more resources and a plan to reduce the backlog, with the goal of providing hearings within 30 days. Advocates for landlords argue that more than half of the hearings could be eliminated if tenants had to file a dispute to obtain a hearing (as is the case for respondents in most other court processes), but that is not a change the LTB can make. The government would have to amend the Residential Tenancies Act to make that change and is unwilling to do so. That leaves the LTB to do the best it can with the current requirement for a hearing, and the increased resources it has now received.

About WRAMA The Waterloo Regional Apartment Management Association (WRAMA) represents owners and managers of residential rental properties all over

Kitchener, Waterloo, Cambridge, Guelph, and the surrounding areas of Ontario. Our key objectives are to advocate for members, provide current, important, and engaging information and industry knowledge, and facilitate networking, connecting members with leaders in the rental housing industry. We are committed to ensuring our members receive the best digital and face-to-face networking opportunities and up-to-date information. We keep it relevant by engaging industry leaders and innovators who support best practices in rental housing. WRAMA is looking for members to take on leadership roles and enjoy the rewards of seeing a project, committee or the industry move forward thanks to your efforts. By getting involved, you will gain hands-on experience, grow in your abilities, and see the positive impact of your contribution on your fellow members. Membership has its privileges. Exclusive to our members is access to a hand-picked group of vendors, suppliers, and experts to help you accelerate the growth of your business. Longstanding WRAMA members say the most valuable member benefit is the network they have developed during their membership. To become a member or volunteer with WRAMA, please visit www.wrama.com.

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Avenue Living: From Brooks to billions In just 16 years, Anthony Giuffre has grown his business from one rental property to $3.8 billion in assets under management.


PRESIDENT’S MESSAGE The HDAA is excited to be in a place where we have started holding in-person events again and we are gearing up to have larger events in the new year. We will be working away diligently over the summer months to make sure our members are well supported and will be organizing events for the second half of the year. The rental housing industry has survived a somewhat grueling two years and we feel we are more prepared than ever for anything that comes our way. We wish everyone a wonderful and hopefully relaxing summer and look forward to seeing our members in the fall. -

Arun Pathak, President, HDAA

Vacant home tax The City of Hamilton has now voted in favour of implementing a vacant home tax in Hamilton, which will be 1 per cent of the assessed property value. The anticipated cost of implementing the tax is approximately $2.6 million, with the majority being allocated toward operating costs, which includes 16 full-time positions. Those in favour of the vacant home tax argue that it will encourage speculators to add supply back to the market by renting out or selling vacant properties. However, the market of increasing prices has been changing, and will likely become more balanced. By the time the tax is implemented, the market will be very different with fewer vacant homes. Taxpayer money will be spent on an initiative that will no longer make sense and may not make much of a difference. The City already requires vacant properties to be registered, at a cost of $1,115, and is currently aware of approximately 221 vacant properties through this registry. In the vacant home tax report, staff estimated that there could be more than 800 vacant properties. This was taken from numbers based on the Vancouver model and not on numbers in the registry. The estimate of revenue generation is $1.6 million initially, decreasing to $800,000, at which point the City will be losing money. Those figures

are likely inaccurate, and may be more off base in a year or two down the line (the timeline for implementation) due to the changing housing market. The City is aware that the tax will not generate net revenue, but the results will be much worse than they expect. The idea that to avoid the vacant home tax one could simply rent out their empty home or rental unit is a vast oversimplification of a complicated issue. The LTB is backlogged, with wait times for hearings reaching six months and obtaining possession often taking more than a year. Anyone who may need to leave for short-term work or study should not risk renting out their property, as they might not be able to move back in when needed. The most significant issue with the proposed tax is that it will require mandatory declarations by all homeowners of properties that fall under the residential property (R1) class, regardless of whether it is vacant or not. If a homeowner fails to provide a declaration, the vacant home tax will be automatically charged, potentially without them being aware. The vacant home tax may also increase over the years as it did in Vancouver where the tax started at 1 per cent and increased to 4 per cent, a significant amount of tax to be charged for failure to declare.

rentalhousingbusiness.ca | 57


The proposed cost to taxpayers of $2.6 million seems like a lot of money for very small impact. In general, anything that complicates the rental housing market, or adds cost, is not positive; this is certainly the case with a vacant home tax. It is also important to remember that any costs or fees that the City mandates on rental housing providers will ultimately be passed on to tenants through increased rents. The provincial government plans to proceed with a working group about the bylaws, and will likely require recommendations to be included in the bylaw. The City of Hamilton has decided to proceed regardless, knowing that it might have to make major changes to the bylaw. The timeline for implementation of the vacant home tax is a start date of early 2024 with declarations beginning in 2023. This may be delayed if the working group’s recommendations result in the need for numerous changes to the proposed bylaw. There will likely be more updates in the latter half of the year. We will provide more news once it becomes available.

Municipal election The City of Hamilton is slowly gearing up for municipal elections, which will be held on October 24, 2022. The current mayor, Fred Eisenberger, has announced that he will not be running for reelection, which will leave the spot open for a new face. At the moment, three candidates for mayor have put their names forward. The three candidates include Bob Bratina, who stepped down as Liberal MP for Hamilton East-Stoney Creek because of his government’s support for light-rail transit in Hamilton; Keanin Loomis, who resigned as CEO of the Hamilton Chamber of Commerce when he announced in January that he would run for mayor; and Ejaz Butt, a former taxi industry leader and community activist, who ran in 2014 and finished sixth. There have been rumours that Andrea Horvath may run for mayor. She announced her resignation as leader of the Ontario NDP on election night, June 2, 2022. The deadline for nominations is August 19, so there is still time for other candidates to come forward with nominations. There will also be changes in several wards, with a few councillors not running for re-election. Wards 4, 5, 11, and 15 will be open, as Councillors Sam Merulla, Russ Powers, Brenda Johnson, and Judi Partridge, respectively, will not be running for re-election. Hamilton has not been entirely friendly toward the rental housing industry and the results of this election will be important. The unfortunate circumstance is that a pro-tenant platform will likely draw more votes than one that is pro-landlord, so we may see councillors running with pro-tenant platforms that will enforce more pro-tenant legislation. The City of Hamilton seems to have a very short-term view of rental and housing issues, which will negatively affect housing supply and ultimately hurt tenants and residents. We will provide more updates and platform positions as the election draws closer.

Upcoming events September 14, 2022 – Dinner meeting The HDAA will begin the second half of the year with a dinner meeting on September 14. Make sure to mark your calendars.

58 | July 2022


Previous events May 18, 2022 – Dinner meeting The HDAA was excited to be joined by Tony Irwin from FRPO who spoke on the latest industry updates, LTB and FRPO updates, and the provincial election and platforms.

the different political platforms. The PC Party has typically been the most receptive and beneficial for the rental housing industry. Tony noted that this government would be releasing a few major pieces of housing legislation that we hope will be positive, but with pro-tenant attitudes gaining momentum, they may not be entirely what the industry will hope they will be. The PC government brought into force the post2018 exemption from the rent control guideline, which has had a positive impact on increasing the number of housing starts. Hopefully, that exemption will stay in place, as the cancellation of that exemption may negatively affect the rental housing supply. Tony also emphasized the importance of sharing our good news landlord stories, and how these stories are more important than ever. As an industry, we should not be afraid of the backlash, as it will always be there; the best we can do is bring positivity into the news about the rental housing industry.

Tony discussed FRPO’s core objectives and strategic plan, which focuses on improving the rental housing ecosystem, sharing good news stories on the modern housing provider, and supporting the rental housing network. Some of the items at the top of the agenda included maintaining vacancy decontrol as well as the post-2018 exemption, continuing discussions with the LTB in terms of efficiency, and working with the government to encourage new supply. As we know, the Ontario Progressive Conservative Party has been voted in again with a majority government, which is positive for our industry. During Tony’s presentation, he spoke on

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

Interested? Call us or join online! Ph: 905-616-2058 Web: www.hamiltonapartmentassociation.ca

rentalhousingbusiness.ca | 59


COMING SOON

DECEMBER 1, 2022

Don’t miss the apartment industry’s most exciting event of the year! The FRPO MAC Awards honours the leaders of the apartment industry revolution and their commitment to their residents. Join us as we celebrate your achievements and gain recognition within the industry.

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Chair’s message This report gives an update on the upcoming City election and on inclusionary zoning (IZ), which may come to Ottawa soon. IZ is an example of a well-intentioned policy seeking housing affordability, which could easily work against housing affordability and against rental supply through its indirect effects. - John Dickie, EOLO Chair

EOLO education and networking event – In-person On March 23, EOLO held its first in-person event in almost two years. Everyone who attended was delighted to see their friends and colleagues face to face. The education session began with presentations on the City of Ottawa’s move to require rental building owners to provide organic recycling (aka green bins). See the last issue for details. The session proceeded with updates on the LTB Portal and the new vacant unit tax (which applies only to properties of six or fewer units), as well as federal issues. Special guest Tony Irwin, FRPO CEO, provided information on the provincial election and the parties’ positions on issues affecting rental housing providers. The networking event followed, with good food, conversations, and door prizes.

Ottawa City election Several months ago, Mayor Jim Watson announced he would not be seeking re-election in the municipal election to take place on October 24 of this year. Three well-known city councillors announced that they were considering election runs seeking to become mayor. However, two of the three have decided not to run to become mayor, and in fact not to run to succeed themselves as councillor in their wards. Those two are Diane Deans and Mathieu Fleury. The third councillor is very much still in the race to become mayor. That is Councillor Catherine McKenney, who currently represents Somerset Ward covering the downtown city core. Councillor McKenney is known for her advocacy for tenant rights and other left-wing issues.

Also in the race is Bob Chiarelli. Born in 1941, He was the last Regional Chair of Ottawa-Carleton from 1997 to 2000. He then served as mayor of the amalgamated City of Ottawa for two terms from 2000 to 2006. From 2010 to 2018, Chiarelli served as the Member of Provincial Parliament for Ottawa-West-Nepean. As mayor, Chiarelli was considered to be a centrist. He and others in the “centre” often worked with the right-wing of council, but they also worked with the left-wing on other issues. He was supportive of tenants and landlords when we were aligned, such as on the multi-residential property tax issue. Chiarelli was also more respectful of property rights than city council has been lately.

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The latest candidate to join the race to become mayor is Mark Sutcliffe, an Ottawa broadcaster, entrepreneur, and community volunteer. Sutcliffe hosted a public affairs show on Ottawa radio, in which he often interviewed city politicians on city issues. He also founded the Ottawa Business Journal. While he is new to politics, Sutcliffe has been fully engaged in the city’s life for decades. Sutcliffe has announced his campaign goals of making the city safe, reliable, and affordable. He does not want big tax increases, which will be a challenge since the city’s costs rise with inflation, road repairs are underfunded, and affordable housing is in demand and costly. A number of city councillors have announced that they will not run to succeed themselves. In addition to Diane Deans, Mathieu Fleury, and Catherine McKenney, they include Jean Cloutier, Keith Egli, and Scott Moffatt. Councillor Rick Chiarelli says that he expects to run for re-election. Candidates for mayor, councillor, and school board trustee have until August 19 to file election papers or to drop out if they have registered to run.

Inclusionary zoning coming to Ottawa On June 16, the City of Ottawa Planning Committee and Community & Protective Services Committee sat together in a joint meeting to consider a City staff report on inclusionary zoning (IZ). Under IZ, developers have to set aside a certain percentage of the units in new developments to be sold or rented at below-market prices or rents. For now, provincial law provides that IZ can only apply in areas around major transit stations along the LRT line. As well, as a matter of City policy, IZ will likely not apply to developments of fewer than 50 units. The staff report took a fairly conservative approach and suggested that 10 per cent of floor space be set aside in condominium developments, and 0 per cent be set aside in rental developments. That was on the basis that rental developments usually show less profit than condo developments, and that City Council wants to encourage as much rental development as possible. EOLO supported the recommendations of the staff report pertaining to residential rental property. To maximize the amount of rental development, it is critical to establish the set-aside rate at 0 per cent for now, as recommended by City staff. However, other public delegations advocated at least a 10 per cent setaside rate for rental developments, and some advocated much more, at a much deeper discount from market. The committee members sent staff away with directions to study more and deeper set-asides than staff had recommended. Final decisions will be made by the newly elected council, probably in the first six months of 2023.

Key policy issues The theory behind IZ is the following. On particularly favourable sites (such as those well served by mass public transit), land values are high. An IZ requirement will reduce the value of the land, while still leaving development able to proceed at those lower land prices. However, empirical evidence suggests that land values do not fall. Instead, development is postponed until prices or rents rise enough to make up for the cost of subsidizing the units that IZ forces on the developers. The key issue in making IZ achieve its goals is to set the requirements at a level at which there is still plenty of development. See Table 1 below, which sets out hypothetical figures to illustrate the point.

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Table 1: Sample IZ requirements and annual results (varying by set aside rate) Set-aside rate Amount of development per year Affordable units Market units

0%

2.5%

5%

10%

20%

2,500

2,000

1,000

200

0

0

50

50

20

0

2,500

1,950

950

180

0

Besides the set-aside rate, another key factor is the degree of affordability required. The deeper the affordability required, the more the cost to the developer, and thus the greater the disincentive to develop. See Table 2 for hypothetical figures to illustrate the point, assuming a 2.5 per cent set-aside rate. Table 2: Sample IZ requirements and annual results (varying by affordability level) Affordability level Amount of development/per year Affordable units Market units

Shallow

Middle (staff report)

Deep

2,200

2,000

500

55

50

12

2,145

1,950

488

With a 2.5 per cent set-aside rate and the affordability the staff proposed, rental development might well fall to 2,000 units per year, 500 units would be lost from the current base line. With a 2.5 per cent set-aside rate and a lower affordability rent reduction than the staff proposed, rental development might well fall to 2,200 units per year, so “only” 300 units would be lost from the current base line rather than 500. Making affordability deeper would have a larger detrimental effect than the staff proposal. To maximize rental development, the keys are to keep the set-aside rate low (preferably zero) and to minimize the depth of affordability demanded.

declined but they have now largely recovered. Now, interest rates are rising, and net capitalization rates will soon rise, both of which make rental development less attractive. Construction costs have also risen sharply due to supply chain problems. It is now difficult to justify rental development in Ottawa, even with no IZ requirements. If a set-aside requirement reduces the net operating income of proposed developments, the attractiveness of possible rental developments would be still less than it is now.

How attractive Is rental housing development now?

EOLO has been urging the City to follow the initial staff recommendation to: 1. Not impose IZ set-asides on rental developments when it begins its IZ program, and 2. Not require deeper affordability than the staff recommended, but instead 3. Assess the impacts on land values of the setaside requirement for condo developments Hopefully, when the issue returns before them, the newly elected Council will see the economic reality that IZ is counter-productive and results in less housing and higher prices and rents.

Over the last five years, there has been a substantial amount of rental development in Ottawa (and elsewhere in Ontario). However, the last five years have seen low and falling interest rates, and low and falling net capitalization rates, both of which make rental development more attractive. Until the pandemic struck, rents were rising across the board, which also makes rental development more attractive. During the pandemic, market rents in numerous areas

Conclusion

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 | 63


Final Take Away

Brought to you by Yardi Canada Ltd

Strategic digital marketing: The value of a holistic approach By Peter Altobelli, Vice President, Yardi Canada Ltd.

The growing prominence of websites in the multifamily marketing and leasing process has sparked a move toward digital marketing that depends on electronic devices. In fact, almost 70% of respondents to Informa Canada’s 2021 Multi-Res Tenant Survey visited the landlord’s website, with almost half saying the visit influenced their decision to rent. These results indicate a fundamental shift from leveraging a website as a marketing channel to including the website as part of the tour.

Key components of a digital marketing strategy include: • Search engine optimization (SEO) to improve search result rankings and increase organic website traffic • Search engine marketing (SEM) that uses paid online advertising to boost website visibility search results • Pay-per-click ads, a flexible SEM strategy in which a business only pays when somebody clicks on its ads • Social media marketing that uses popular platforms such as Facebook, Instagram, and YouTube for brand amplification and engagement • Content marketing that creates helpful and easily accessible resources for customers; options include articles, blog posts, podcasts, and videos • Email marketing that can nurture and build relationships with prospects and residents

Differentiating your online experience The renter’s journey should be frictionless, from accessing listings and completing applications to submitting payments and renewing leases. This means leasing activity begins on the website, emphasizing the importance of instant, mobilefriendly experiences to hold visitors’ interest. As the prospective renter explores the website, community managers can encourage engagement with an omnichannel chatbot. Over the last year, artificial intelligence and natural processing technology have innovated software apps to improve responses and create a more human-like conversation. This tool also prepares your teams to communicate and connect with Gen Zers, the largest generation ever, as they enter the rental market. And when the customer is ready to apply, leasing teams can use advanced screening software that has access to credit reports, rental payment histories, and even international information. All are crucial features as more renters enter the market and properties compete for quality tenants.

64 | July 2022

Integrating resident services Resident portals and apps have become another essential tool for marketing and leasing success. According to the Informa Canada 2021 survey, 70% of renters currently use or want a tenant portal. Over two-thirds of respondents would like to communicate with their landlords electronically via a portal but only about half do. And 73% expressed a desire for online payment options, such as an app, e-transfer functionality or online pre-authorized debit. Portals and apps are beneficial as they help reduce communication barriers between staff and tenants. Having easy mobile access to account details and more removes the need for residents to call the office for minor details (an option also preferred by Gen Z).

Maximizing marketing ROI Now that you have implemented a property marketing strategy, how do you ensure it delivers the highest ROI for your budget? One industry best practice to improve customer service and marketing results is to have staff focus on highquality leads. To identify prospects who are likely to convert, lead attribution tools in modern customer relationship management (CRM) software can help. With these data and analytics, which include each marketing touchpoint that contributed to a lease and not just the first source that generated the lead, sales teams can initiate more organized and responsive marketing campaigns and track prospect activity more precisely.

Final benefits Innovations within the multifamily market spurred by the pandemic have opened the door to wideranging technology options. Such platforms are now critical for a seamless renter lifecycle and higher tenant retention. Property managers who have leveraged an integrated digital marketing strategy in 2021 are better equipped to thrive in the next phase of normalization. For more information on marketing technology, visit yardi.com/rentcafe.


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