Vol. 12 No. 1 March 2019
Canadaâ€™s #1 most widely read publication for Apartment Owners, Managers and Association Executives
Your electrical system could be on life support Failing to regularly inspect and maintain your electrical system can have serious consequencs for your building and tenants.
Eight tips to boost leads with SEO and SEM Follow these strategies to attract leads and boost business.
The official publication of:
RENTT: A look ahead at 2019 Panelists take a look at issues that could affect the rental housing industry both regionally and nationally.
CFAA CFAA is expanding its lobbying on federal tax issues to lay the groundwork for the next federal election.
How do you increase marketing ROI? Attract more prospects, convert more leads and retain more residents with the RENTCafĂŠ Suite, a powerful marketing, leasing and resident services platform with innovative property marketing features, automated lead tracking and management tools, contact center resources and advanced search marketing services.
A single connected solution for multifamily marketing management
888.569.2734 Yardi.com/Marketing ÂŠ2019 Yardi Systems, Inc. All Rights Reserved. Yardi, the Yardi logo, and all Yardi product names are trademarks of Yardi Systems, Inc.
Project Management | Building Science | Structural Engineering | Roofing Surveys | Condition Assessments | Asbestos and Mould Surveys
McIntoshPerry.com Weâ€™ve encountered every possible building-related issue over our five decades of history. With more than 500 engineers, project managers and technical experts across the country, we provide a full range of services to the rental housing industry.
rentalhousingbusiness.ca | 3
EDITOR’S NOTES Taking a smart break We took our daughter to the Ontario Science Centre over March break, which also happened to be its 50th anniversary. Has it been around as long as I have? That’s crazy but true. It’s always fun to visit this amazing institution, and if you live in or are visiting Toronto, it’s a must do for every family. My daughter has some interest in the sciences (chemistry) so it’s a great way to have fun and learn at the same time. The March issue of RHB Magazine features a RENTT panel that involves a discussion of several national issues, such as the pending federal election, the potential for a recession, and the impact of the economy on rental demand and interest rates. We also ask about issues of regional interest, including provincial elections and the TransMountain pipeline. Given the major electrical breakdowns that have occurred at several Toronto rental properties over the past year, we thought that it was important to publish an article on the importance of inspecting and maintaining your building’s electrical system. It includes several key strategies for helping to ensure that you keep your electrical system functioning, and your tenants safe in their units. We also published an article on tips for boosting leads with SEO and SEM in your digital marketing. Don’t forget to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. And see what CBRE has written about transaction activity in Alberta’s multifamily market in the Suite Count section. Of course, we always enjoy hearing from our readers, and we want to support two-way communication. If you have any comments or questions, send them to david@ rentalhousingbusiness.ca. I look forward to hearing from you. Enjoy the issue! David Gargaro
Marc Côté firstname.lastname@example.org
Juan Malvestitti email@example.com
David Gargaro firstname.lastname@example.org
John Dickie, President CFAA email@example.com
Art Director Kyu Shim
Director of National Sales Nishant Rai
Regional Sales Executive (RAV) Ranjna Bhardwaj
Office Manager Geeta Lokhram
One year $49.99 Cdn Two years $79.99 Cdn Single copy sales $9.99 Cdn Opinions expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the CFAA Board or management. CFAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher.
Enjoy the issue! David Gargaro Senior Editor
4 | March 2019
P.O. Box 696, Maple, ON L6A 1S7 416-236-7473 Produced in Canada All contents copyright © RHB Inc. Canadian Publications Mail Product Sales Agreement No. 42652516
What makes this compactor smart?
iSMART technology sends alerts and provides compactor diagnostics in real time. With the data it collects, weâ€™ll reduce your service calls, limit downtime and save you money. If you want to optimize your waste stream, call us at: 416 743 8484 ext. 2
rentalhousingbusiness.ca | 5
VOL.12 NO.1 2019
CONTENTS Eight tips to boost leads with SEO & SEM Follow these digital marketing strategies to attract leads and boost business.
RENTT: A look ahead at 2019
RHB’s forum for rental housing associations to share news, events and industry information
Hot Topics: LPMA discusses problem solving strategies for dealing with mental health issues in rental housing. pg. 45
The Rental Executives National Think Tank panel comes together
WRAMA covers the legal landscape for 2019, supporting veterans and their familes, and technology. pg. 49
to discuss regional and national issues that will affect the industry
EOLO discusses the City of Ottawa’s action to study the regulation of shortterm and long-term rentals. pg. 53
in the year ahead.
HDAA discusses the problems with the creation of a tenant defence fund and where those funds would be most effective. pg. 57
The Member Associations
Regional Association Voice Regional Association Voice features the latest industry news from four member associations.
Your electrical system could be on life support If you’re not diligent about inspecting and maintaining your building’s electrical system, then a small issue can lead to significant breakdowns.
6 | March 2019
Suite Count Alberta saw a meaningful increase in overall transaction activity through 2018.
rentalhousingbusiness.ca | 7
PRESIDENTâ€™S CORNER Within Budget 2019, the main news for rental housing providers was a $10B increase in the funding for the Rental Construction Financing Initiative (RCFI), over the next nine years. The RCFI seeks to promote new rental construction. Unlike the National Housing Co-Investment Fund (NHCF), the RCFI has a workable definition of affordability, and offers considerable flexibility in how to achieve it. The RCFI also provides more benefit for for-profit rental developers than NHCF, since RCFI provides a reduced interest rate, and may well avoid the need for construction financing. CFAA members told us that NHCF does not work for them, while the RCFI is much better. We told the government, which has listened, and increased the funding for RCFI. CFAA invites your further input, so that we can suggest improvements to RCFI. Missing from the Budget was any consideration of removing the GST/HST from new rental construction. That had been promised in the 1995 Liberal election platform. CFAA has been lobbying for that and other tax changes, as methods of encouraging new rental supply, and addressing housing affordability, which is a hot public policy issue. To help hone our messages and connect with the key people, CFAA has engaged both Capital Hill Group, a firm with an excellent track record in lobbying about housing policy and programs, and Len Farber, a consultant on tax policy, who was the General Director, Tax Policy Branch, at the Department of Finance for many years. See page 35 for more on CFAAâ€™s expanded tax lobbying work, and what is needed for it to continue. The new Canada Housing Benefit (CHB) is also being designed at this time. CFAA and our members and allies promote the support of
8 | March 2019
tenants who have the most trouble affording their rents in the private rental sector as the best use of the CHBs. CFAA will be hosting Rental Housing Conference 2019 from May 13 to 15, 2019, in downtown Toronto. The conference will offer sessions in the following areas: technology, tenant relations, rental development, rental markets, human resources, marketing, and leadership. As keynote speakers, CFAA-RHC 2019 will feature Benjamin Tal, Greg Millen, and Murtaza Haider and Stephen Moranis (authors of the Haider-Moranis Bulletin). For more information, see page 40 or visit www.CFAA-RHC.ca. CFAA will be presenting the winners of the the Rental Housing Awards on Tuesday, May 14, at the CFAA Awards Dinner, part of CFAARHC 2019. For more information, see page 38.
John Dickie, CFAA President
Ville St-Laurent, Quebec
Halifax, Nova Scotia
Multi-Housing Specialist When your property is running with the power of Maytag, the only thing youâ€™ll need to focus on is the day ahead. Heavy-duty washers and dryers are built to endure the daily grind, keeping your laundry room running efficiently and delivering dependability, cycle after cycle. To learn more call 1-800-387-9503 or visit www.harcoco.com rentalhousingbusiness.ca | 9
In this issue of... NATIONAL OUTLOOK 35. Working with expert consultants, CFAA has expanded its tax advocacy in anticipation of the fall federal election. Also included is an update on Budget 2019.
CFAA Member Associations Eastern Ontario Landlord Organization (EOLO) www.eolo.ca P: 613-235-9792 Federation of Rental-housing Providers of Ontario (FRPO) www.frpo.org P: 416-385-1100, 1-877-688-1960
38. CFAA’s Building Innovation Tour will visit three stunning new purpose-built rental buildings in Toronto. Learn more about The Livmore by GWL, The Selby by Tricon and Motion by Concert Properties.
40. CFAA Rental Housing Conference 2019 is coming to downtown Toronto from Monday, May 13 to Wednesday, May 15. Find out more about the exemplary networking and education opportunities at the conference.
To subscribe to CFAA’s e-Newsletter, please send your email address to firstname.lastname@example.org.
The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $480 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.
10 | March 2019
Greater Toronto Apartment Association (GTAA) www.gtaaonline.com P: 416-385-3435 Hamilton & District Apartment Association (HDAA) www.hamiltonapartmentassociation.ca P: 905-632-4435 Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572 LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604-733-9440 Victoria Office P: 250-382-6324 London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999 Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560 Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703
Are you an affordable housing provider in our Ontario service area?
Keep your Affordable Housing Affordable. Looking to cut your operating costs? Lower energy use and improve resident comfort by upgrading your building's equipment.
With up to
$200,000 in available incentives
Here are some of the measures we support: • High Efficiency Boilers • Make-Up Air Units • Water Heaters • Heat Reflector Panels • Low-Flow Showerheads • Control Upgrades • Heat Recovery Ventilators
Let’s get started. There are solutions and retrofit rewards for all budgets. For more information, contact: Cam Black, Enbridge Energy Solutions Consultant email@example.com (416) 758-4748
rentalhousingbusiness.ca | 11
S T I E R 6 P O T CAPREIT
LK A W D R A BO
W E I V H T R NO
3 4 5 6 12 | March 2019
K E E R C R E TI MB SKYLINE KILLAM
48,181 33,187 27,000 22,640 16,885 15,900
rentalhousingbusiness.ca | 13
his issue brings together the RENTT (Rental Executives National Think Tank) panel in a slightly different format than usual. The panelists discuss issues that will affect the rental housing industry nationally, such as Octoberâ€™s federal election, the potential for a recession, and the effect of the economy on rental demand. We then speak to panelists individually about issues specific to their province. 14 | March 2019
A look ahead at 2019
Nicolas Denux, Partner, Groupe Denux
Greg Romundt, President, Centurion Asset Management Inc.
Avrom Charach, Vice President, Kay Four Properties
RHB: Welcome to RHB Magazine’s RENTT panel. We appreciate the time and effort involved in participating in today’s discussion and sharing your experience. Our readers will benefit from your input and experience. Today we’d like to talk about what 2019 looks like for Canada and the rental housing industry. What is the expected outcome of the October federal election? How will it affect
federal housing policy and federal income redistribution measures? Nicolas Denux: I hesitate to pick a winning side, but while current events may have weakened the Liberals, I suspect they will keep their majority, although likely a smaller one. My expectations are that nothing much will change if Liberals keep their majority. I expect current programs from CMHC for new rental construction to continue but worry that
rentalhousingbusiness.ca | 15
federal income redistributions are funded by deficit spending, so future taxpayers will be stuck with the bill for today’s federal income redistribution measures. Greg Romundt: I believe we will see Trudeau swept from power with a PC majority. I expect to see measures to reverse some of the mortgage restrictions that have slowed the real estate market either by the Liberals or the Conservatives as an elections platform. This would be bad policy but good/typical politics. Avrom Charach: Until a few weeks ago, I would have suggested a Liberal majority. At this time, I wonder if the October election will result in a minority government. It was positive to see the additional housing dollars allocated in the most recent budget to the Rental Construction Financing Initiative, which supports new rental supply at close to new construction rents. If we do not see a majority government, I doubt we will see any more positive changes. In fact, a minority government may be pressured by the third party to redirect money from the Rental Construction Financing Initiative to the National Housing Co-investment Fund, which is only useful to the social housing sector. I am not sure that anything more than what we saw in the budget will be undertaken to increase the private rental housing supply regardless of the outcome of this election. RHB: Will Canada see a recession, a slowdown in growth or neither? Nicolas Denux: The crystal ball question! If I knew, I wouldn’t be here! I expect a slowdown in growth because there is a mix of opposing factors: headwinds, from trade to oil export being limited but there are tailwinds if interest rates stay low or go back down, and the current employment situation is positive overall. The economy is probably running at close to full capacity in the apartment markets we are present in, those being Montreal and Vancouver Island, so growth can pretty much only slow down from here. An actual
16 | March 2019
recession seems less likely. Greg Romundt: A recession will happen. We’ve had basically 11 years of uninterrupted growth and no expansion lasts forever. A recession is inevitable and a requirement in a market economy to restore balance for future growth when it comes. Avrom Charach: I tend to agree with the many experts who foresee a slowdown in growth from 2018 levels. The uncertainty from an election coupled with the protectionist policies we see outside of Canada gives rise for that concern. RHB: What impact will the economy have on rental demand? On interest rates? Avrom Charach: Interest rates will likely stagnate, which means that rental demand will not increase. The prolonged low interest rates have only hurt our industry and I do not believe that will change significantly in the next year. Rental demand will not increase and the continued construction of new condominiums and rental housing in Manitoba will likely mean slightly higher vacancy rates in 2019. Nicolas Denux: I do not expect a dramatic change in 2019. A slowdown in the economy can help reduce the risk of interest rate increases, which helps on the financing side but also softens demand in the rental market. Beyond 2019, I am less worried by the economy than by a potential oversupply of rental in some markets. Multi-family construction is on a tear on Vancouver Island and, although supply has not yet met demand, I would not be surprised if it does in a few years considering the pace of construction. The same applies in Montreal. Greg Romundt: Rental demand is already robust. I believe an economic slowdown, if it’s not a severe one, will increase rental demand further. People need a place to live, and would likely not have the confidence to
SPEED Q UEE N IN S IG H T S ®
The Most Convenient Laundry Experience Industry-leading smart technology that simplifies laundry day. When it comes to laundry, it’s all about resident satisfaction. With Speed Queen® Insights, your residents can use the mobile app to pay with their smartphone, check machine availability, earn rewards and get alerts when their cycle is done. Speed Queen Insights is completely hassle-free and backed by 24/7 support. Your residents will be so satisfied, they’ll want to stay home on laundry day.
Talk to your laundry service provider about Insights. Learn what Insights can do for you at: speedqueencommercial.com/ mhconvenience
Speed Queen by Alliance Laundry Systems
rentalhousingbusiness.ca | 17
buy in a slowdown, and thus would likely have a higher propensity to rent. I expect that given the large deficits that the government is already running in an expansion, the deficit would explode higher in a recession such that there would be little appetite to increase the deficit further with further fiscal spending. As a result, the Bank of Canada will have little choice but to cut interest rates dramatically to cushion the slowdown.
British Columbia RHB: Will the provincial minority government survive in BC? If not, what government will succeed them? Nicolas Denux: I think so. The current minority government has a thin majority with the Green alliance but are doing everything they can to keep their alliance together, even if it leads to questionable decisions. RHB: Will the TransMountain pipeline go ahead? How will this affect the economy? Nicolas Denux: I think so, as it is the most logical and practical solution. The difficulty it will take to get it approved has shown, as many have said, that big resource projects are very difficult to get approved in Canada. Big investments dollars will flow elsewhere in the future, mainly to the U.S. Once construction goes ahead, the TransMountain pipeline will be a plus for BC and Alberta’s economy, with the spinoff spending and employment in BC being a positive for BC.
Manitoba RHB: Do you see Premier Pallister calling a provincial election in 2019? Or in 2020 before the programmed date of October 6, 2020? Avrom Charach: I do not foresee an election call this year, mostly because the federal election is imminent. Certainly the announcement of a drop in the PST has led to much speculation that a call might happen in the spring of 2020, after winter and after people have seen a few pennies
18 | March 2019
more in their pocket for a few months. I am not sure that will happen but currently the opposition parties are not gaining ground in the polls. The ruling government would have to balance off the strength of the opposition with the negative opinion that may come from an early call. I am not a betting man but I would suggest that the election will happen on October 6, 2020. RHB: What impact do you think the Manitoba government is likely to have on rental providers in Manitoba this coming year? Avrom Charach: Very little. The current government has been so focused on debt reduction that they have barely touched our industry since taking office. I believe that the drop in GST will help us by reducing our operating costs by a fraction of a per cent. It seems unlikely that with an election coming in the next 18 months that any housing policy which could anger business or renters would be introduced before the next election.
Ontario RHB: What reforms will the Ford government enact to expedite housing developments in Ontario? How will these reforms affect the housing and rental markets? Greg Romundt: I’m not convinced that any changes that would be brought would be effective in significantly ramping up rental development. The is that it is difficult for new rental to compete against condos from a viability point of view unless the government is prepared to do things like property tax and development charges waivers, which requires municipal buy-ins. Given how financially stretched both provincial and municipal levels of government are, I doubt that even if they would be able to part with the revenues. While I have the view that Ford has the intent to “do something”, I’m not convinced that anything he would do would be effective.
“ I COULD
NEVER LIVE WITH SOMETHING HAPPENING TO MY TENANTS. Ensuring my staff and I always hire Licensed Electrical Contractors for electrical work isn’t only good for business, it’s good for my peace of mind. Hiring a ‘guy’ may seem cheaper, but doing it legally saves my tenants downtime, and saves me from sleepless nights.” -Mark Levinson Property Manager
Mark manages nine commercial properties and is considering using ESA’s time saving Continuous Safety Services. To learn more about your legal obligations and the benefits of CSS, visit esasafe.com/propertymanagers
Political & economic forecast National issues
will see a slowdown in growth. The made-inCanada policy changes to cool the housing markets also seem to be overshooting their mark a little, which will be a drag on consumer consumption.
More than they often realize, rental housing providers are affected by steps taken by the federal government. One example is the stress test for new homebuyers. Another is the newly expanded Rental Construction Financing Arguably the biggest policy move was Initiative, which will impact rental development. the stress test for qualifying for mortgage financing. That impacted would-be first time Given the low rate of unemployment, coupled home buyers more than move-up buyers. with a low rate of inflation, one would expect Ironically, the government has now introduced the incumbent federal government to cruise the First-Time Home Buyer Incentive to assist to re-election in October. However, the recent the very people who were and are most SNC/Lavalin scandal has put the election result negatively affected by the stress test. into more doubt. With a minority government of either the Liberals or the Conservatives, relatively few policy changes are likely to be made. In some ways that is a good thing, since the rental industry can be a target. However, in other ways, a policy freeze would be unhelpful. The interests of tenants in the private rental market and of private rental housing providers would be better served by a change of course on the National Housing Strategy to put more funding into the Canada Housing Benefit, as well as the Rental Construction Financing Initiative, so the Canada Housing Benefit can help more renters in the private market. That is less likely to happen under a minority government, whichever major party forms that government. The world economies, and Canada’s weak business investment, suggest that Canada
20 | March 2019
Despite the new First-Time Home Buyer Incentive, rental demand is likely to stay strong. As unemployment rises somewhat, young adults are likely to stay in their parents’ homes longer, or to share with others, thus cutting back on that portion of demand.
Quebec The Quebec government of Premier Legault is seen as business friendly, which should slightly mitigate the economic factors, both external and internal. According to CIBC Economics’ most recent data, Quebec’s real GDP grew 2.8 per cent in 2017 and close to 2.5 per cent in 2018, slightly besting Canada’s rate for 2018. For 2019, CIBC forecasts 1.9 per cent real growth in Quebec, a little higher than the forecast of 1.8 per cent for Canada as a whole.
CLASS Coinamatic offers the best-in-class service and equipment that will make your laundry room stand out. Find out more by visiting our website or calling us, today. 1-877-755-5302 | www.coinamatic.com
rentalhousingbusiness.ca | 21
Saskatchewan The Saskatchewan economy depends on the world demand for its resources and its agricultural output. The dispute with China is not helping, when that interferes with the export of canola. CIBC Economics forecasts real GDP growth in Saskatchewan of 1.8 per cent in 2019 and 1.3 per cent in 2020. That is better than a recession, but not strong growth. As in recent years, vacancy rates above 6 per cent, and modest rent growth seem likely.
Alberta For the Alberta economy, the key factors are the world price of oil, and the twinning of the TransMountain pipeline to increase the capacity to export Alberta’s oil resources. A stronger economy would make for more employment and that would make for higher rental demand and lower rental vacancies. Regardless of the result of the upcoming Alberta provincial election, the Alberta government will obviously continue to press for TransMountain to go ahead. The future position of the federal government is less clear. Clearly, with its strong electoral support in Alberta, the Conservatives would drive the pipeline forward. The current Liberal government also appears to be committed to the completion of the pipeline. A future Liberal majority government would also almost certainly move forward with the pipeline. Where the situation becomes unclear is if the October federal election results in a Liberal minority government. As in all minority government situations, the party with the balance of power can demand certain action. It is unclear what position the federal NDP would take.
New Brunswick New Brunswick has a minority government now, with the Green Party holding the balance of power. Recently, the Green Party leader
22 | March 2019
introduced Bill 10, to seek to amend NB’s Residential Tenancies Act. Currently, New Brunswick has some of the lowest rents and highest vacancy rates in Canada. Those conditions rarely lead to the introduction of rent control. However, Bill 10 proposes to bring in a rent increase limit of the lesser of inflation and 3%. This is a head scratcher. CFAA President, John Dickie, notes rent control would be counter-productive. “Now, in New Brunswick, market rents only rise more than inflation if a landlord improves a property, or if the demand for rental units increases in a particular area. The proposal will reduce the incentive to improve properties, which is the last thing New Brunswick needs. As well, the proposal will interfere with market adjustments to changes in the location of rental demand. As is always the case, rent control will tend to cause a scarcity problem, even when there is no problem before the measure is introduced!” If enacted, Bill 10 would also require landlords to provide prospective tenants with a heating cost disclosure form. The New Brunswick Apartment Owners Association (NBAOA) and other landlords object to that because the heating cost and power consumption are mostly controlled by the tenant, not the landlord. Bill 10 would also require landlords to accept rental payments in cash. NBAOA objects to that because many landlords have implemented a policy of not accepting cash for safety and control reasons for themselves and their staff. Bill 10 may well be merely a push for public support on non-environmental issues, rather than an issue on which the Greens will demand government action, but it is unhelpful to the rental industry for the issues to be pushed forward.
Simplify your energy coStS
Achieve 35-75% energy savings! Our clients have received approximately $5 million in rebates and well over $10 million in energy savings! Free lighting audits | IESO applications | Long-term solutions and reduced maintenance costs | 5 year warranty | Excellent paybacks
Call us: 1-877-345-5351
Your electrical system could be on life support Aging infrastructure is a growing problem in Canada’s rental housing industry. While this is not a new issue, it has become front and centre due to recent incidents in Toronto. Fires and breakdowns in the reliability of several buildings’ electrical systems have ousted thousands of people from their homes… in one case, for more than one year. The main problem is lack of maintenance on the part of building owners and landlords. It has become such a serious concern that the City of Toronto is working with Ontario’s Electrical Safety Authority to perform a series of electrical inspections on aging apartment buildings as part of a safety blitz. Many landlords and property owners have been doing a good job of keeping their building’s systems up to date and in good working order. However, this is not the case for every building, as evidence has shown. Failure in the electrical system can have serious consequences, even endangering the health and safety of tenants. If you’re not diligent about inspecting and maintaining your building’s electrical system, then a small issue can lead to significant breakdowns, as well as serious financial and legal repercussions.
Age is a primary factor While construction of rental housing has increased over the last 20 years, most of Canada’s purposebuilt rental stock dates from the 1970s and earlier.
24 | March 2019
According to the Canada Mortgage and Housing Corporation (CMHC), three quarters of primary rental stock was built before 1980, with 25 per cent built before 1960. This means that the majority of rental properties built in Canada are at least 40 years old, with many of those buildings much older than that. Electrical systems in older buildings degrade with regular use. While parts and systems can be serviced and maintained, they can malfunction more quickly over time. Corrosion of metal parts is very common with aging electrical systems, and these require maintenance and replacement to avoid potential electrical hazards down the road. These types of issues could indicate additional
rentalhousingbusiness.ca | 25
potential electrical hazards. Older electrical systems are also much less energy efficient than systems introduced in the last 10 years. “ESA research indicates that older buildings, specifically those constructed prior to 1976, have an increased risk of electrical incidents,” said Dr. Joel Moody, Chief Public Safety Officer and Senior Director, Policy and Innovation, Electrical Safety Authority (ESA). “This is mainly from normal wear and tear over time and where electrical systems have not been adequately maintained.” With the increase in failing electrical equipment, servicing aging multi-residential buildings has become a prominent issue. Electrical equipment failures can account for hundreds of thousands of dollars in damage. As aging building structures continue to age, this problem will continue to worsen unless active steps are taken. “The top causes of electrical equipment failure are exposure to moisture and water penetration, which account for nearly all electrical losses,” said Vinh Dang, Senior Project Manager, Wynspec Engineering. “These problems can easily be corrected with a proper routine preventive maintenance program.”
Maintenance is a legal obligation As a landlord or property manager of a multi-unit residential property, you are legally responsible for maintaining the building, including its electrical systems. If your municipality does not have a property standards by-law, then you must ensure that your residential rental complex complies with the prescribed maintenance standards under the Residential Tenancies Act (RTA). Municipalities are responsible for reviewing and investigating complaints from tenants about the state of their rental complex’s maintenance. In Ontario, the provincial standard under the RTA requires landlords to comply with standards that include utilities and services (e.g., electrical). “Property owners are required to regularly maintain and repair electrical systems to ensure they are in safe working order,” said Dr. Moody. “Property owners are required to ensure electrical work is done by a qualified licensed electrical contractor and that any necessary permits are obtained to facilitate review of the electrical work by the Electrical Safety Authority.” It is important to note that property managers and building owners are legally allowed to do their
26 | March 2019
own electrical work – to some degree. However, they must follow the Electrical Code in their province. The Code is updated every few years to address emerging technology and improvements in electrical safety practices. Always follow the current edition of the Code before doing any electrical work. Also, almost all electrical work requires a permit from the provincial authority with jurisdiction.
Being proactive is the best approach The best way to ensure that electrical systems function properly is to implement and follow a proper maintenance plan. This helps to keep systems in good working order, prolongs the life of the building and its systems, and minimizes potential catastrophic failures. Work with a licensed electrical contractor to create a maintenance plan. The contractor should review the plan with you in detail, considering each unit of equipment as it relates to the entire functioning and operation of the building. This will determine the frequency of inspection and testing based on the type of equipment and environment for the maintenance plan. Schedule inspections regularly to ensure that issues are addressed, and that systems are up to date. If you have not spoken with your contractor or electricity consultant for more than a year, you should schedule a conversation immediately. “In general, the best preventive maintenance that anyone can do is to complete a comprehensive infrared scan and correct any problems or issue found,” said Ed Porasz, P.Eng., President, M & E Engineering Ltd. “Secondly, if the building has a main switchgear, the gear should be cleaned by an electrical contractor, which will require the building’s electrical system to be shut down. During the shut down and cleaning, the interior of the switchgear will be inspected and repaired if required.” It is vital to regularly inspect, clean and maintain the switchgear inside the main panel. This includes oiling or greasing moving parts as per manufacturer’s instructions. If the switch is not properly maintained, it might malfunction by failing to switch off. This could lead to a buildup of energy and, in a worst-case scenario, an explosion. “When planning a program for your buildings, make sure that superintendents do a routine visual check of all mechanical and electrical rooms,” said
Call your iron railing specialists today! We specialize in: Roof Top Guard Rails | Wall Mounted Access Ladders Stairwell Railings & Handrails | Iron Gates & Fencing Balcony Guard Rails Exterior Railings | On-site Welding
Serving the GTA since 1972!
Dufferin Iron & Railings is committed to serving our customersâ€™ needs. Our trade skills and years of experience enable us to produce high quality products delivered in a timely fashion. Our clients choose us because of our reputation for quality, excellent service, and competitive pricing. www.dufferiniron.com
Dang. “All vents and fan grills must be cleaned of all dust or dirt accumulations. Ensure that ventilation openings are not obstructed. And keep a clear and complete record-keeping system.”
building’s major equipment and systems, such as boilers and chillers, lighting and more. They will also examine equipment controls for energy usage.
Hire a licensed electrical contractor
An engineer will evaluate the building’s energy usage by examining and comparing energy bills for the last two years. This enables them to analyze changes in energy usage over time and season, and determine whether there is any unusual usage. They will also compare the building’s energy usage to similar buildings to show how it is using electricity in different ways.
You can do everything “right” (i.e., perform regular maintenance of your electrical systems) and still run into serious issues if you don’t employ properly trained professionals to do the work. Apartment buildings have highly complex electrical systems, as well as kilometres of wiring, and require extensive knowledge of codes and safety systems to be properly maintained. This type of work cannot be left to untrained building staff. “A visual review should be carried out by a professional engineer to assess the condition of the structure concealing the mechanical and electrical rooms,” said Dang. “This is particularly important since most rooms are either in basements and underground parking garage facilities that are exposed to extreme temperature changes. A condition assessment should be carried out by a professional engineer confirming that the structure concealing the mechanical and electrical rooms are structurally sound and in a watertight condition.” Before hiring a professional to inspect, maintain or replace electrical equipment, it is incumbent on property owners and managers to ask the licensed electrical contractor whether they’ve previously worked on similar electrical systems. Not all contractors have the same experience needed to work on all systems. Multi-unit residential properties have different systems than singlefamily houses and commercial properties, and 40-year-old apartment buildings are not built the same as five-year-old condominiums. “Check to ensure the contractor holds all required qualifications and licences, including an ECRA/ESA licence for electrical work,” said Dr. Moody. “Confirm the contractor has secured all appropriate permits for electrical work. Request a copy of the ESA Certificate of Inspection from the contractor once the work is complete.”
Conduct an energy audit In addition to doing regular maintenance, building owners should schedule an energy audit, possibly in conjunction with a building condition assessment, to get a comprehensive overview of their property. Audits involve inspections of the
28 | March 2019
“If a piece of equipment has one to ten years left in its life expectancy, and if the newer equipment has a payback in five to ten years, it may be beneficial to replace the equipment earlier to save on energy, maintenance and increase reliability,” said Porasz. “If an energy audit shows a payback that is longer than what is acceptable to the owner, then reviewing the equipment ensures that it is well maintained and there may be parameters that could be set on the existing equipment to make it slightly more efficient without changing it.”
Conclusion Regular maintenance is the best defense against electrical failures in your multi-unit residential building. If you have an older building, it’s essential to stay on top of electrical maintenance and repair before it leads to catastrophic failure and potential safety issues for your tenants. Failed or neglected equipment almost always results in unnecessary and costly repairs due to the urgency of the situation. Make and follow a maintenance plan, and hire licensed electrical contractors to keep your building’s electrical systems functioning properly before you are forced to shut your building down due to failures that you could have prevented.
By David Gargaro, in collaboration with Dr. Joel Moody, Ed Porasz and Vinh Dang
CFAA Rental Housing Conference
May 13 to 15, 2019 The Canadian Federation of Apartment Associations (CFAA), invites you to join us at Canadaâ€™s Rental Housing conference at the Hyatt Regency hotel in downtown Toronto. www.CFAA-RHC.ca Thanks to Principal Sponsor:
rentalhousingbusiness.ca | 29
BROUGHT TO YOU BY
NEWS PREMIERES MAY 2019
INDUSTRY NEWS, MARKET DATA, LEGISLATIVE UPDATES, FINANCIAL ANALYSIS AND EXPERT COMMENTARY.
A digital broadcast network for all of your Rental Housing Business news.
NEWS AND DATA LIKE YOU’VE NEVER SEEN BEFORE.
RHB TV provides rental housing professionals a competitive advantage in a world changing faster than ever before. p Each episode provides owners, REITS, property managers, industry executives and others, actionable ideas and insights to maximize proﬁts and growth.
DONE ONCE. DONE RIGHT!
FROM TOP TO BOTTOM – FROM START TO FINISH… WE’RE THERE. WYNSPEC is a multi-faceted consulting, engineering, design and project management ﬁrm. We provide a unique blend of services and expertise, working with our clients to restore, transform and modernize their buildings.
Eight tips to boost leads with SEO & SEM The terms “search engine optimization (SEO)” and “search engine marketing (SEM)” have likely come up in your conversations about digital marketing. You may even have a free program that builds SEO into your blog and website. But if your organization is missing well-developed SEO and SEM strategies, you are missing leads and losing business. These eight tips can help you create SEO and SEM strategies that attract leads and boost business.
Before you plan, brand The backbone of any marketing strategy starts with solid branding. Branding extends beyond your logo, listings and amenities. It’s about creating a marketing strategy that has a distinct, memorable voice. Your ideal prospects must hear that voice through the multitude of competitors’ voices and offers. Your branding strategy must also remain coherent through all your public-facing platforms, including your website, social media channels, business listings like Google and Yelp, as well as your property listings on ILS. Each piece forms a whole story that is customized for your target audience. Begin by working with your marketing team to ensure that your brand integrates clearly between public-facing channels. Once you’re satisfied with your marketing message and image, you’re ready to begin your SEM and SEO strategies and build powerful digital marketing campaigns.
Develop your keyword list Your branding will influence the list of longtail keywords that form the foundation of SEO and SEM. “Longtail” simply means that you’re working with a specific phrase rather than general terms. The more specific, the better, because that is how serious inquiries are formed in search engines like Google and Bing. For example, “Toronto apartments” is too vague to gather high-quality leads. A longtail keyword like “3-bedroom apartments near Casa Loma” or “studio apartments under $1,500 in Kensington Market” designates more serious inquiries. Deciding on your keyword list may require the skills of an SEO specialist. If you don’t have SEO and SEM specialists on your team, outsource this element of your digital marketing plan.
32 | March 2019
Create clear targets & goals Decide on your target audience and your goals. Be specific. SEO and SEM specialists can help you create clear targets and goals for your upcoming digital campaign. Catriona Orosco, manager of RENTCafé Reach at Yardi, says, “It’s important to target for property locations and demographics and identify highperforming queries to maximize your ad spend. If you target common, broad search terms, you’re going to get a lot of low-quality leads.”
Let SEO work for you To capture quality leads online, you must increase the number of viable prospects visiting your website. After selecting strong keywords and defining your target audience and goals, digital marketing specialists can make those components serve you. They work behind the scenes to create your SEO strategy. A successful strategy ensures that your website ranks high on organic search queries. The right renters are then naturally guided to your properties. “People’s assumptions about what’s necessary in marketing are often outdated,” says Orosco. “SEO professionals are experts at guiding qualified prospects to your website. We are up to date on the latest algorithms and protocol changes made on popular search engines like Google. We stay educated and aware of what’s important in gaining a competitive advantage in search results.”
Create complementary SEM campaigns SEM uses paid advertising to direct traffic to your website and other platforms, and each set of paid ads forms a single campaign. SEM experts generate complementary campaigns that won’t compete against each other for prospects’ attention. “Your account should be actively managed by certified AdWords specialists, preferably Google Premier Partners,” says Orosco. “They have a combination of in-house expertise, as well as a strong partnership that helps them identify areas for improvement to test and adjust complementary campaigns to maximize performance.”
Monitor, adjust, win Your SEO and SEM experts should regularly track campaign performance and re-evaluate your digital
marketing strategy. They should report changes in leads, click-through rates and conversion rates. If this is your first foray into digital marketing, you may not know what to look for. The pointers below can help you get started. • You will want a strategy that increases leads. For example, a quality campaign can generate about a 160 per cent increase in leads. • Your click-through rate is the percentage of people who click on your ad to learn more. Click-through rates are surprisingly low. An average nine per cent click-through rate or higher indicates great prospect engagement. • Conversions are an essential indicator of success. Your conversion rate conveys the percentage of people who fulfilled your call to action. Your call to action may be booking a tour or signing a lease online, for example. A conversion rate between 5-10 per cent or higher is ideal. It shows that your digital marketing campaign is attracting quality leads that are interested in your product.
Avoid the easy (illegal) route Some companies may offer to send commercial electronic messages (CEMs) via email or text to all contact numbers gathered through your lead registration techniques. It would be great to get your content in front of all those eyes! Unfortunately, such contact is restricted under Canadian anti-spam laws.
SMS (text) messages are a popular mode of communication. When integrating SMS into your campaign, it is important to respect Canadian antispam laws. For example, a text messaging initiative requires recipient consent, proper identification of your business, and an unsubscribe mechanism for the recipient.
Trust the experts Your organization may have grown because your team members wear multiple hats. You may have leasing staff helping with social media posts and answering calls about maintenance requests. Your SEO and SEM strategies are far too important to leave in the hands of novices. SEO and SEM best practices are constantly evolving. To experience success, your strategy should include the latest best practice. Overlooking or misinterpreting applicable marketing laws may result in costly fines and litigation. A smart digital marketing strategy operates within the parameters of local law. Entrust your SEO and SEM campaigns to experts. It is the only way to ensure that you’re making a wise investment with measurable returns and minimal risks. By Peter Altobelli Vice President & General Manager Yardi Canada Ltd.
rentalhousingbusiness.ca | 33
SUITE SAVINGS Get free in-suite LED upgrades LEDs are a simple and effective upgrade that add value for residents and potential tenants. They’ll love the brighter, fresher look and saving up to 75% in energy use. We’ll take care of everything and even throw in a smart power bar per suite too, in exchange for an existing standard one. Both bulk metered and sub-metered units are eligible.
HOW SUITESAVER SAVES • No-cost LED replacements • Free smart power bar* • Free installation and disposal • More energy-saving tips for residents
$75 ONGOING ANNUAL $60 SAVINGS PER SUITE† VALUE PER SUITE
*Free smart power bar will be provided to suite owners in exchange for an existing standard power bar. †Based on an assumed number of fixtures per suite – results may vary. Subject to additional terms and conditions found at torontohydro.com/business. TMTrademark of the Independent Electricity System Operator. Used under licence. A registered trademark of Toronto Hydro Corporation used under licence. “Toronto Hydro” means Toronto Hydro-Electric System Limited.
EXPERT ADVICE, FREE OF CHARGE Our Energy Experts can help you get started. Get in touch today. JANA JEDLOVSKA Lead, CDM Business Development (MURB) firstname.lastname@example.org 416-542-3496 LEE MASUCCI CDM Key Account Consultant email@example.com 416-542-2821 LUCAS J. PROHASKA CDM Key Account Consultant firstname.lastname@example.org 416-542-3353
CFAA’s Growing Tax Lobbying By John Dickie, CFAA President Using funds from CFAA’s expanded direct membership program, CFAA has resumed lobbying on federal tax issues. The housing affordability crisis centred in Toronto and Vancouver could well be an opening to make progress on tax issues at an elevated level, which have long been a priority for CFAA. Since the next federal election is due to take place in October, now is the best time to influence the parties’ election platforms. Our first step was to engage Robert McCreight of Capital Hill Group (CHG), which has an excellent track record in lobbying about housing policy and programs. CFAA has lobbied on those issues continuously for the last three years using internal resources, and our connection with other major housing groups. In December, we elevated our game on the housing file by bringing in CHG to hone our messages and arrange more meetings with CMHC. In January, we and CHG turned renewed attention to the tax issues. Through CHG, CFAA engaged Len Farber, a consultant on tax policy, who was the General Director, Tax Policy Branch, at the Department of Finance from 1973 to 2005. Len’s unique insight has helped to hone our tax reform message, focusing Len Farber, Farber Consulting on what stands the best chance of success. Reductions in taxes on rental income would tend to increase the rental housing supply and thus improve housing affordability. All the CFAA tax reform proposals are ways to improve affordability. This is the policy angle that the government is the most likely to respond to. All the proposals should benefit many landlords or developers directly, and benefit all landlords and developers indirectly by making rental housing a more attractive investment.
Budget 2019 In Budget 2019, Finance Minister Morneau announced a $10B increase in the funding for the Rental Construction Financing Initiative (“RCFI”) over the next nine years. That is a program of reduced-cost financing which has seen significant take-up by for-profit rental housing developers. CFAA would prefer government support for new market rental housing without any affordability requirement, but at least the RCFI has a definition of affordability which is much more practical than the definition in the other main federal rental supply program, the National Housing Co-Investment Fund (NHCF). The RCFI also provides more benefit for private rental developers than NHCF, since RCFI provides a reduced interest rate, and may well avoid the need for construction financing. We told the government that NHCF did not work, while the RCFI was much better. The government has listened and expanded the RCFI. CFAA invites your input, so that we can suggest improvements to RCFI. We need to be selective about what we ask for, since the Finance officials are still opposed to any sweeping reforms which would cost the federal Treasury substantial amounts of money. However, various modest changes would improve the situation for many rental providers, and thus increase rental supply, addressing housing affordability. The move up effect When new rental projects become available, existing renters often move up, thereby making available the units they move out of. In turn, renters from older, economical units move into the units the existing tenants vacated. That makes affordable rental housing available quickly to those who need it, at a fraction of the cost of subsidizing the construction of what is called affordable housing. GST/HST, Active Business Tax
rentalhousingbusiness.ca | 35
How do you control utility costs?
SEPTEMBER- OCTOBER 2018
Reduce utility consumption and costs with a built-in energy intelligence solution. Increase cost recovery with seamless resident utility billing and save money on late fees with paperless utility invoice processing. Get valuable analytics and actionable insights to increase visibility and control.
A single connected solution for energy management
36 | nov 2017 ÂŠ2019 Yardi Systems, Inc. All Rights Reserved. Yardi, the Yardi logo, and all Yardi product names are trademarks of Yardi Systems, Inc.
NATIONAL OUTLOOK GST/HST, Active Business Tax Treatment and Repairs or Capital CFAA is advocating what we understand are the three most promising tax issues. All are pitched at addressing housing availability and affordability. The three asks are that the government: 1. Take advantage of the move-up effect by reducing the GST/HST charged on new rental buildings. 2. Allow active business tax treatment for rental providers to allow some deferral of recapture on sale and reinvestment, to allow investors to access the standard corporate tax rate (rather than the current high rate, which is close to 50% in most provinces), and to allow small corporate landlords to access the small business tax rate. 3. Expand the ability for rental providers to claim expensive building improvement work as repairs (rather than capital improvements), even though the work provides a better item at the building than the item that was replaced (e.g. replacing mid-efficiency boilers with high efficiency boilers). In a lobbying blitz between February 19 and 21, CFAA met with 5 MPs with key roles in housing and tax (from all three major parties), and also with the tax and housing policy officials in the Privy Council Office, the director of policy for the Minister responsible for housing, and a key policy advisor in the office of the Minister of Finance. Reactions and CCA Rates Our suggestions were received with interest by all concerned, although different politicians and officials were warmer to some of the proposals than to others. One key contact, who had not been friendly to rental industry proposals in the past, asked about the Capital Cost Allowance rate for rental buildings, and indicated that he would be glad to champion an increase in order to incentivize new rental supply. We will explore that further. It was a goal CFAA sought in the past. That change would improve development proformas now, while the modest decrease in tax revenue would mostly occur in the future.
We did not set out with a goal of influencing the 2019 Budget, but rather the parties election platforms. However, our earlier work resulted in the expansion of the RCFI, as noted in the top box on page 35. If the on-going, direct membership drive continues to raise the necessary funding, CFAA will continue with Len’s and Robert’s work throughout this summer and into the future, to solidify and advance CFAA’s total lobbying efforts. If the direct membership drive does not allow that, CFAA will pause the external lobbying over the election period and re-start it once the next government is in place. In that case, CFAA’s internal lobbying and information function will continue with the existing resources as in recent years.
CFAA’s Direct Membership Program The CFAA Board urges all readers to join CFAA directly to gain the benefits of direct membership, and so that the expanded lobbying work can continue year round. As compared with affiliate members, CFAA Direct Members receive additional benefits, which include: • direct input into the CFAA Board and CFAA policy • every-issue delivery of RHB Magazine • bulletins about federal subsidy program changes and tax changes • the ability to enter the CFAA Awards program for any buildings or employees • bulletins about the CFAA Conference and Awards program • a discount on the CFAA Rental Employee Compensation survey • a discount on registration for the CFAA Conference. New services will help rental providers increase their knowledge and professionalism for the benefit of themselves and the whole rental housing industry. The annual direct membership dues for rental housing providers is $100 plus 50 cents per rental unit. For a landlord with 1,000 rental units, the fee is $600, plus HST. For a landlord with 5,000 units, the fee is $2,600, plus HST. To apply to join CFAA as a direct member, email email@example.com, and CFAA will send you the application form.
WANT TO STAY UP TO DATE WITH NATIONAL OUTLOOK? Sign-up for CFAA’s National Outlook e-newsletter to receive up-to-date news on what is happening across Canada, as well as industry insights and insider information on CFAA happenings. Email firstname.lastname@example.org to start receiving National Outlook today!
rentalhousingbusiness.ca | 37
MARCH - APRIL 2019 CFAA Rental Housing Awards 2019 The CFAA Rental Housing Awards Program helps to celebrate excellence and achievements in our industry, contributed by rental providers, rental suppliers and apartment associations. Awards finalists and winners will be announced at the CFAA Awards Dinner on May 14, 2019, which is part of the CFAA Rental Housing Conference 2019. For more information about the conference, and to book your tickets for the Awards dinner, visit www.CFAARHC.ca. Tickets are limited! Book yours today.
In all, CFAA is now offering at least 10 awards categories. As in previous years, CFAA reserves the right to split categories in order to award more specific awards. CFAA Suppliers Council members, direct landlord members and affiliate members (landlord members of any of CFAA’s 11 member associations) were invited to apply by the April 8 deadline. If you missed the Awards deadline this year, please consider applying next year. For more information, please email email@example.com.
Building Innovations Tour – 2019 During the afternoon of Monday, May 13, CFAA will present a tour of three new purpose-built rental buildings: “The Livmore”, by GWL Realty Advisors; “The Selby”, by Tricon House; and “Motion”, by Concert Properties. Join colleagues to see what these buildings offer in features, amenities and designs, by registering for CFAA Rental Housing Conference 2019, including the Building Innovations Tour. For more information, or to register, go to www.CFAA-RHC.ca.
Motion by Concert Properties “Motion” by Concert Properties is located at 570 Bay Street, close to the core of downtown Toronto. See the photos below. For information about Motion, visit http://www. concertproperties.com/rentals/motion.
The year, we accepted applications in the following categories: • Property Manager of the Year • Off-Site Employee of the Year • On-Site Employee of the Year • Rental Housing Provider of the Year [NEW] • Marketing Excellence of the Year [NEW] • Renovation of the Year • Rental Development of the Year • New Product or Service of the Year • CFAA Suppliers Council Member of the Year [NEW] • Association Achievement of the Year
Call for Sponsors and Attendance
CFAA’s Awards Program relies on sponsors to help keep our program open and free of application fees. Please consider sponsoring components of the awards program. Help CFAA celebrate excellence in our industry! To learn how to sponsor, please email firstname.lastname@example.org. Attend the Awards Dinner on May 14, and find out who has won a CFAA Rental Housing Award in 2019. Buy your ticket at www.CFAA-RHC.ca.
38 | March 2019
Motion’s outdoor terrace
NATIONAL OUTLOOK The Selby by Tricon House ”The Selby”, a new 52-storey purpose built rental tower by Tricon House, is located at 25 Selby Street, nestled amongst four of Toronto’s neighbourhoods – Cabbagetown, Yorkville, Rosedale, and the Danforth. Building features: • 3,500 sq. ft. state-of-the-art gym and yoga/ spinning studio by BioSteel • Outdoor kitchen and lounge • Outdoor pool and deck terrace • Spa with wet dry sauna, deluge showers and meditation area • Games room and clubroom • Private theatre • 24 hour parcel lockers • Electric vehicle charging stations • Dog spa with grooming area • Underground resident and visitor parking • Stylish co-working space • Biking and walking paths • On-site café, bistro, bar and lounge called “Maison Selby” by Oliver & Bonacini • On-site Concierge The Selby consists of 502 apartments, with a suite mix of 56% one bedrooms, 37% two bedrooms and 7% three bedrooms. One bedroom apartments range from 524 to 603 sq. ft.; two bedrooms from 821 to 874 sq. ft.; and three bedrooms are 1093 sq. ft. For more information about The Selby, visit https:// triconhouse.com/theselby/.
The Livmore by GWL Realty Advisors “The Livmore”, a new 43-storey purpose-built rental tower by GWL Realty Advisors, is located at 55 Gerrard Street West, Toronto, at the southeast corner of Bay and Gerrard. The building consists of 595 apartments. Building features include: • two-storey sky lounge (26th floor) • outdoor terrace (5th floor) • gym/fitness area • yoga/aerobic studio • party room (private function areas with kitchen facilities) • theatre/screening room • game room • dog spa and outdoor dog area (5th floor) The Livmore suite mix is 20% studios, 45% one bedroom apartments, 30% two bedrooms and 5% three bedrooms, with many different floor plans and a range of unit sizes within each bedroom count. For more information about the Livmore, visit thelivmore.com/. The Livmore
The Selby’s outdoor terrace
The Livmore’s outdoor terrace
rentalhousingbusiness.ca | 39
MARCH - APRIL 2019 CFAA-RHC 2019: Working Together To Help You Succeed Following after CFAA’s well received conference in Vancouver in May 2018, CFAA Rental Housing Conference 2019 will take place from May 13 to 15, 2019, at the Hyatt Regency hotel in downtown Toronto. Register and book a hotel room now before the room block runs out! Register at www.CFAA-RHC.ca.
CFAA-RHC 2019 - Schedule in brief Monday, May 13 1:00 to 5:00 pm Building Innovations Tour 5:00 to 7:00 pm Welcome Reception Tuesday, May 14 7:30 am Breakfast 8:30 am Benjamin Tal 10:00 am Executive Round Table 11:00 to 4:30 Breakout sessions 4:30 pm Awards Reception 6:00 pm Awards Dinner Wednesday, May 15 7:30 am Breakfast 8:30 am Minister Steve Clark (invited) 8:45 am Murtaza Haider & Stephen Moranis 11:00 to 4:30 Breakout sessions 3:30 pm Greg Millen 4:30 pm Conference concludes As keynote speakers, CFAA will be presenting:
• Benjamin Tal, CIBC World Markets, on the World economy and what it means for Canada • Murtaza Haider and Stephen Moranis, authors of the Haider-Moranis Bulletin, on key rental development issues • Greg Millen, NHL commentator and educator, on Leadership through Courage and Teamwork
Conference streams and topics
Some sample topics include the following:
Artificial intelligence: What is AI? Where is AI advancing the fastest? What will AI mean for rental housing? Among many sub-topics, the panelists will address how AI will: • Take rental providers from preventative maintenance to proactive maintenance; and • Empower chat bots to assess and process prospective renters 24/7 with no overtime, premium time, or sick time. Find out how AI will change the future of rental housing. Get your questions answered. Internet of Things: What is it? Where is it advancing the fastest? What impact is it having on rental housing? What will the future hold? The benefit to existing owners of encouraging new purpose-built rental: New PBR would benefit renters, and moderate housing costs. Learn how and why existing rental owners would also benefit from more new rental housing development. US rental data and analysis: What new information is available through CFAA’s new partnership with the National Apartment Association? What can we learn from that to apply to Canadian markets? Canadian rental markets: Looking at some key markets, what can we glean now from the CMHC rental market reports, and other CMHC data which is available? How do we go far beyond the vacancy and average rent increases? What changes would you like to see in CMHC’s reports? Steps to Success:
CFAA-RHC 2019 will offer breakout sessions in the following streams:
Some leaders in rental housing who now manage 2,000, 10,000 or 25,000 rental units began their careers with humble beginnings.
The panelists in Steps to Success began in the rental industry as a laundry worker in a hotel, an administrative assistant, and a building superintendent. Find out how they advanced their careers to reach their current positions, managing tens of thousands of rental units, and how you can too.
• technology • tenant relations • rental development • rental markets • human resources • marketing • leadership
40 | March 2019
NATIONAL OUTLOOK Serving the Tenants of Today: Where is new rental demand coming from? Is it seniors who are downsizing? Students from inside or outside Canada? Millennials trying out their first job in a new city? What amenities and style of services do today’s renters demand and want? What upgrades create the most value? What operational structures let you respond most effectively? Top new marketing trends: Where is rental marketing going, both in the digital world and in the non-digital world? (One session on each). Other topics Other topics will be addressed sessions such as:
• Improving the reputation of rental providers • Corporate Social Responsibility for rental providers
• Influencing government • Employment Law update • Operations Round Table • Building communities within rental communities • Revenue Management • Energy retrofits
Conclusion Whether you are a rental housing executive or manager, a hands-on owner, or a rental industry supplier, there will be great information, ideas and contacts for you at CFAA Rental Housing Conference 2019. Come meet with other engaged individuals in the rental housing industry, exchange ideas and see how we benefit from working together. For more information, or to register for CFAA-RHC 2019, please visit www.CFAA-RHC.ca. Act now to ensure your registration and hotel room!
CFAA Rental Housing Compensation Survey 2019-2020 The only Canadian survey of rental housing employee compensation and benefits. Find out market compensation for all key positions in the sector, at the city or provincial level. Participate to receive discounted rates to purchase the survey. Email email@example.com. Visit www.cfaa-fcapi.org for more information.
rentalhousingbusiness.ca | 41
RHBâ€™s forum for rental housing associations to share news, events and industry information
Hot Topics: LPMA discusses problem solving strategies for dealing with mental health issues in rental housing. pg. 45 WRAMA covers the legal landscape for 2019, supporting veterans and their familes, and technology. pg. 49 EOLO discusses the City of Ottawaâ€™s action to study the regulation of shortterm and long-term rentals. pg. 53 HDAA discusses the problems with the creation of a tenant defence fund and where those funds would be most effective. pg. 57
The Member Associations
We build overhead doors that last
For 60 years weâ€™ve been on the cutting edge of Overhead Doors innovation. Our products are quieter, last longer, and work better than anything else on the market.
If you never want to worry about your Overhead Doors again, give us a call: 905 846 6000
President’s message – Mental health awareness According to the Canadian Mental Health Association, one in five people in Canada personally experience a mental health issue. In this issue of RHB Magazine, we focus on mental health challenges and how they affect residents and landlords. We also point to the legal angles landlords can pursue when they have exhausted all other avenues. This delicate topic has become one of the principal issues facing landlords. LPMA invited experts to our March dinner meeting to provide members with practical ideas for resolving problems. April will be busy for LPMA. We have the annual trade show on April 9 at the Greek Hellenic Centre (6:00 PM – 8:00 PM) and the annual Spring Hope Food Drive on April 17 at larger apartment buildings. Hopefully, once this issue is in your hands, we will be looking at spring flowers and clear blue skies! - Lisa Smith, President
Renting and mental health issues: Tips for effective problem solving Landlords are responsible for keeping their buildings and residents safe. But what happens when individuals have mental health issues that adversely affect their tenancy and jeopardize the safety of other residents? London lawyer Joe Hoffer says the question is complex, partly because landlords are expected to play a major role in resolving problems, including hoarding and unsanitary conditions. “The landlord can’t simply say, ‘You’ve either got to clean up your act or get out.’ The landlord has to look at the specific factors and the specific facts for an individual situation,” he says. Manifestations of mental health issues, such as hoarding, constitute a disability and landlords need to devise a practical way of resolving the problem, Hoffer notes. The landlord’s responsibility is based on the Ontario Human Rights Commission’s policy and guidelines on disability (www.onhrc.on.ca). Landlords have a duty to accommodate tenants to the point of undue hardship, according to the Commission.
Hoffer cautions that landlords can get into trouble for suggesting a tenant has a mental health issue since it can be perceived as not respecting their dignity. However, if prospective tenants volunteer that they have a support worker or that their rent is paid through a social services agency, the landlord can ask if they would be willing to list that person as their emergency contact. “What landlords can’t do is demand that tenants list the worker or social services agency as an emergency contact,” Hoffer says. In cases of hoarding or unsanitary conditions, the landlord should give the tenant a deadline for cleaning up the unit, followed by a 24-hour notice of entry when the deadline expires. If the tenant hasn’t rectified the problem, the onus falls on the landlord to determine why and to take steps depending on available resources, Hoffer says. Landlords can contact the Canadian Mental Health Association (CMHA), which, in larger municipalities, provides assistance. Other agencies may also help, but operate differently according to the municipality. “Some are very proactive and others say, ‘It’s your problem, landlord,’” Hoffer says. James Hind, a fire inspector/investigator with the London Fire Department, believes the system is a detriment to securing help for someone in need. “Mental health services are voluntary so unless a person is holding a gun to themselves and is at risk to themselves or others, many agencies won’t step in to do anything,” he says. Landlords then rely on the individual to call for assistance and navigate a system that is “traditionally very, very difficult” to navigate on a good day, let alone for someone in crisis. “The system is not set up to be in the best interests of a client,” Hind observes. Hind says he receives four to five calls a week about mental health issues, including hoarding and disconnected smoke alarms. Mental health and fire safety intersect when tenants suspect their smoke alarms are listening devices, which puts the residents around them in jeopardy. Hind recommends that landlords contact social services agencies, including those that are already
rentalhousingbusiness.ca | 45
assisting the tenant if prior consent was given, and document their progress to protect themselves and the company they work for. “Insurance companies can deny or pull a policy based on the fact that there is a hoarder in the building and the landlord didn’t do anything about it,” he says. The London-Middlesex branch of the CMHA offers a family support program, dropin centres and community support teams that act as intermediaries, connect clients with community resources, access financial resources and teach life skills, including how to keep an apartment clean. David Small, a public educator with CMHA, encourages clients to take their community support worker with them to sign a rental application since it shows a desire to be upfront. It also puts a landlord’s mind at ease knowing there is a worker they can contact for assistance. “For landlords, there’s some level of comfort going forward that if there happens to be a problem, they’ve got resources in the community,” Small says. “Sometimes there needs to be a well-meaning, considerate third party who can assist, provided that consent is given during the process of negotiating a potential tenancy.” Small says one in five Canadians has a serious persistent mental health issue, which translates into four tenants in a building of 20. Although CMHA is committed to keeping tenants housed, when CMHA has arranged the tenancy, the agency will relocate a tenant rather than jeopardize a good landlord. Small believes it’s in the best interests of building superintendents to build trust by greeting tenants by name and conversing with them. If they notice that a tenant who was once sociable is now surly, they could ask how they can help. Tenants may be more apt to admit they’re struggling and landlords could help to connect them to resources. “The more landlords build a relationship with the tenant, the more likely they are to be able to utilize that relationship when things go poorly,” Small says. “It’s difficult to start to engage with somebody if there hasn’t been anything done in order to develop that dynamic.” Andrea David, Regional Manager, Community Support Programs for VHA Home HealthCare (VHA), a non-profit charitable organization, also believes that landlords should reach out to tenants, as well as conduct regular maintenance inspections to identify concerns before problems escalate. “It is important for landlords to be approachable and non-judgmental so that tenants are not reluctant to reach out for support when needed,” she adds. VHA operates an Extreme Cleaning program that is free for low-income clients who are at risk of eviction due to conditions in their unit. Referrals come from community agencies, Legal Aid, landlords, family members and self-referring clients. (The referral line is 1-888-314-6622.) VHA conducts an initial assessment for each referral and determines the type and level of service appropriate for each client. Depending on the outcome of the assessment, VHA can provide cleaning, clutter coaching and counselling services to clients who meet the program criteria and consent to the service. David says landlords aren’t always involved in the service unless clients have consented to it. Landlords aren’t required to contribute on the day of the cleaning, although it’s helpful if they are supportive so clients can sustain their progress. The purpose of the service is to allow clients to continue to live independently in their current homes.
46 | March 2019
“The program has experienced success by achieving that,” David says. “We have helped clients stay in their homes and avoid imminent eviction.” Nevertheless, proceeding with an eviction notice in chronic situations is a valuable tool for landlords, Hoffer says. “When that occurs, if they’ve done everything they should do, then there’s a high likelihood that the Landlord and Tenant Board will issue an order to terminate the tenancy.” Landlords should never shrug off the problem as only a mental health issue, which occurred with Toronto Public Housing, Hoffer says. A fire erupted in a hoarder’s unit, causing serious damage to the building and resulting in many tenants being displaced. The residents launched a class action lawsuit against the landlord for failing to take action against the tenant who was hoarding. “Landlords are caught in a bind if they see a situation where there is a risk, not just to property, but where there’s a risk to other tenants’ health and safety,” Hoffer says. “Then there really is, in my view, a duty of care to other tenants and to the tenant who’s in that unit to take steps to mitigate the health and safety risks.”
Small recommends that landlords consider other options first to avoid damaging the tenuous link with the individual. As a precaution, landlords should identify community agencies that can help them, including the police. “At the very least, the police can call the crisis service (519-433-2023) that CMHA owns and operates and then a mobile crisis team can come out to meet and engage with that individual,” Small says. Landlords can also contact the London Fire Department to arrange an inspection by calling Hind at (519) 661-2489 ext. 2612 or by emailing jhind@London.ca. Hind stresses that the department is an enforcement agency that can take individuals to court when the need arises. With the proper supports and funding, “the vast majority” of the people the department sees are very good tenants, Hind says. “But because they’re not properly supported and the supports are so under-funded, they’re set up to fail by the system that is supposed to help them,” he notes.
rentalhousingbusiness.ca | 47
Comfy living for tenants. Comfy energy bills for you. We’ll cover up to 50% of the cost when you upgrade to high-eﬃciency equipment The Aﬀordable Housing Conservation Program provides ﬁnancial incentives for high-eﬃciency space and water heating equipment, heat recovery, building automation systems and more.
Visit uniongas.com/aﬀordablehousing to learn more.
48 | March 2019
President’s message WRAMA was grateful to be included as a credible voice and welcomed the opportunity to participate in an input session as part of the Streamlining Approvals Initiative put on by the Municipal Services Division, Ministry of Municipal Affairs and Housing. The session included developers who spoke to the challenges in starting, executing and completing housing projects. I spoke to the parallels that exist between development projects, purpose-built rental housing and secondary suites construction. Common themes included challenges that rental housing providers experience with different expectations from individual municipalities around the province, including rental licensing, water billing and parking enforcement. These issues all negatively impact adding supply to housing stock. Despite terrible weather, we had a great turnout to our WRAMA event this past February at The Tannery Event Centre in Kitchener! WRAMA members and guests were introduced to efforts by Bill Ridley, Veteran Services, Seniors and Homelessness Chair, and the Royal Canadian Legion, to help veterans with rental housing. For more information on this program, please contact Bill via email at firstname.lastname@example.org. Brittany Lee from Naborly shared how her company provides a different approach to tenant screening. If you would like to learn more about Naborly, visit www.naborly.com. WRAMA thanks Joe Hoffer and Cohen Highley for sponsoring appetizers at each table and making the night a special one for all those who attended! Joe spoke to the many issues that continue to create challenges in Ontario with regard to rental housing. WRAMA presented to the Region of Waterloo Budget Committee on February 6, 2019, speaking to the multi-residential property tax burden imposed by a 1.95 tax ratio applied to properties of more than six rental units. Special thanks to John MacDonald for spearheading this campaign, raising awareness among community leaders and asking the question, “Why is it in the public interest to tax certain types of residential properties at 195% the rate of other properties?” If you would like more information about this issue, contact John via email at john@ johnmacdonaldarchitect.ca. WRAMA continues to be the leader on issues confronting residential rental housing in the
Region of Waterloo. Be sure to check out WRAMA’s Facebook page page, www. facebook.com/ WRAMAORG/, for the latest media interviews and happenings! On February 26, 2019, WRAMA was grateful to be included at an event titled No Vacancy: Tackling Ontario’s Rental Housing Supply Crisis, held by The Empire Club of Canada in downtown Toronto. The keynote speaker was Tony Irwin, President & CEO, Federation of Rental-housing Providers of Ontario. Irwin will be presenting at our WRAMA event on May 8, 2019. MARK YOUR CALENDAR! And don’t miss the WRAMA Annual Trade Fair on Wednesday, April 10, 2019 – also a new location! More info on all WRAMA events can be found at http://wrama.com/wrama-events/. - Andrew Macallum, President
WRAMA February meeting
WRAMA had a fantastic crowd for its meeting on February 13, 2019, as three experienced speakers joined us to discuss a number of highly relevant topics, including rental housing supports for Canadian veterans, technology options, such as artificial intelligence, for finding efficiencies in rental housing and what’s coming up in the legal landscape for landlords in 2019.
rentalhousingbusiness.ca | 49
As WRAMA’s mission is to actively and positively develop and sustain the integrity of its members’ business in the Golden Triangle - the provision of private residential rental accommodation this essential presentation of information will help rental housing providers to plan for and address the many challenges that will inevitably surface.
Legal landscape for 2019 Joe Hoffer, lawyer and partner with Cohen Highley, discussed a number of legal issues that could have a significant impact on landlords in 2019. Ongoing problems at the Landlord and Tenant Board (LTB), including the backlog of the application and hearing process and lack of adjudicator training, will continue to create difficulties for landlords. Hoffer believes that tenants will continue to abuse the process, and with the lack of respect for the rule of law, cases and hearings will take even longer than they have in the past. “The biggest problem at present is the lack of appointed Board Members and LTB staff,” said Hoffer. “At the Board level, it means longer wait times to hearings, which means more tenants are at risk of losing housing because of the higher arrears owed. At the staff level, it means that it takes days before an application is processed, further delaying the time to hearing.” Human rights issues could also become a greater concern for landlords and property managers. Cannabis will likely be at the centre of many legal complaints from tenants. Some tenants might have a federal license to grow a set number of cannabis plants for medical purposes, which can exceed the allowed number of plants grown for recreational purposes. However, this license does not mean that plants can be grown in the rental unit. Landlords can implement and enforce rules prohibiting the cultivation of cannabis. Hoffer stated that a person with a medical cannabis license can designate another person to grow the necessary plants for a person’s prescription. “In my view, there would be a rare and unique set of facts which would cause the Human Rights Tribunal to conclude that a landlord must allow a tenant to operate a grow op in a rental unit in order to comply with ‘accommodation’ requirements under the Human Rights Code,” added Hoffer. Harassment is another significant concern for landlords, and requires great care to avoid. Hoffer related a recent case where the Human Rights Tribunal awarded $60,000 to tenants because the landlord blatantly discriminated against them in an effort to force the tenants to vacate. Hoffer also touched on landlord licensing. He explained how, in Waterloo, the licensing fees exceeded $1000 per lowrise (townhouse) rental unit, although the fees collected were not used to address housing units. Apparently, the City bought new cars for by-law officers, new mobile devices, etc. The landlord applied for and received an above guideline rent increase (AGI) of about 7 per cent. The City’s “greed” negatively impacted tenants. Based on what happened in Waterloo, Toronto set its by-law fee low enough such that the threshold to trigger an AGI would not be reached. “Then, each year after, the City is free to incrementally increase the fee without triggering an AGI,” stated Hoffer. “Ultimately the tenants still pay and the fees disappear into City revenues the same as any tax but the City is not blamed for the tax.”
50 | March 2019
Supporting Canadian veterans in rental housing provision Bill Ridley, Veteran Services, Seniors and Homelessness Chair and Indigenous Veterans Outreach with the Royal Canadian Legion, gave a presentation on what the organization can do for veterans, as well as their widow(er)s, who run into financial difficulty and are either facing eviction or are being evicted. The Legion advocates for the care and benefits of Canadian veterans, including those who currently serve in the Canadian Armed Forces and RCMP, as well as their families. Ridley stated that the Legion assists veterans to apply for benevolence funds, which can help stabilize a veteran’s tenancy and take them out of arrears. The veteran or their widow(er) must pass a needs test analysis to qualify for benevolence funds to cover back rents, utility re-connection, food and medicine, and other necessities. He explained that landlords can assist the Legion in these efforts by introducing two questions on their application form: • Did you ever serve in the military? • Are you a spouse or widow(er) of a veteran? “The Royal Canadian Legion’s primary goal is to advocate for and on behalf of veterans and their dependents,” said Ridley. “Specifically in the Waterloo Region, we have helped a number of veterans and widows access funds to stay. We have assisted veterans from the age of 17 all the way up to 92, along with widows of veterans. Our efforts, through Operation Leave the Streets Behind, are around keeping veterans off the streets.” Ridley wanted to speak at the WRAMA event to address the challenge that the Legion has in getting the message out to veterans and their families. The organization wants to make it widely known that there are funds available to assist veterans and widow(er)s who are at risk or who are being evicted for rent being past due. Providing landlords with this information will enable the Legion to intercede before veterans and their families face eviction, and to get involved before
their financial situation gets worse. By being proactive in helping veteran tenants, landlords can help to ensure that they and their families stay in their homes.
Tech in rental housing Brittany Lee, Business Development at Naborly, spoke about how her firm helps rental housing providers to screen tenants more effectively. This includes providing free tenant screening and credit reports to landlords and property managers in the U.S. and Canada, as well as optional criminal background checks. The company also sells rental and security deposit insurance. As part of her presentation, Lee showed the Naborly dashboard and an example of a Naborly report, which was generated using risk analysis powered by artificial intelligence (AI). The report included a score based on analyzing hundreds of tenant variables, as well as financial analysis, credit summary, debt summary, rental history, employment information and other data. Lee discussed the importance of properly collecting and analyzing rental data in the tenant screening process. Since rental data is not reported as thoroughly as homeowner data, it can be difficult to interpret credit data, which is why context and expertise are required to effectively evaluate prospective tenants. She stated that there is no correlation between credit score and tenancy, and that proper analysis of publicly available tenant data can help landlords make better informed decisions. “According to our data, 62 per cent of people under 35 have subprime credit scores, and yet 97 per cent of people under 35 are considered ‘good’ renters,” said Lee. Lee fielded a number of questions on the company and its services, including one on how the AI works. She explained that it analyzes and cross references more than 500 data points to enhance the validity of the score. She also gave examples of the types of information that is collected, such as the types of pets a tenant owns and how far they travel to work.
Discover the benefits of being a member of our association The mission of the Waterloo Regional Apartment Association is to actively and positively develop and sustain the integrity of its members’ business – the provision of private residential rental accommodation – in Waterloo , Kitchener, Cambridge, Guelph and surrounding areas. To view the full range of valuable property managment resources we offer to our members, or to apply online go to http://wrama.com/, or contact WRAMA at 519-748-0703.
rentalhousingbusiness.ca | 51
52 | March 2019
City of Ottawa studies regulation of short-term and long-term rentals By John Dickie, EOLO Chair
There is a renewed push among a few City of Ottawa Councillors to bring in landlord licensing. As most reasonable people realize, landlord licensing is a misdirected policy response to a very limited problem. Landlord licensing would impose work and costs on the many landlords who are behaving properly now in an attempt to change the behaviour of a few. Enforcing the property standards by-law would be more effective, and avoid imposing costs on landlords who are behaving properly. The alleged problems are that some landlords do not maintain and repair their rental properties properly, and that some tenants are afraid to enforce their rights. We do not understand how anyone can believe that people who do not follow the current property standards rules would suddenly follow the licensing rules AND the property standards rules. The hammer in licensing is that the City will withdraw the license, and prevent the landlord from renting their property, but that would result in the tenants losing their homes. Why would a tenant be any more comfortable to complain under a new regime? If the City shuts down the rental, the tenant would have no recourse, whereas now if the landlord seeks to evict the tenant, the tenant has plenty of recourse at the Landlord and Tenant Board. Any sensible tenant would rather report a property standards violation than a licensing violation, since the latter could result in the tenant losing their rental home, and the former is unlikely to do so. Besides being badly targeted, landlord licensing would raise the cost of doing business and thus tend to reduce rental supply and increase rents. The same Councillors who advocate landlord licensing also generally want housing to be affordable, but their licensing proposal conflicts with the goal of maintaining rental supply and rental affordability. Fortunately, the current status is that City staff are reviewing the regulations and the regulatory
options. That will lead to a staff report and a public consultation, which EOLO and rental providers can still influence.
City work to date The current plan is for two rounds of public consultation, one in May or June to hear public concerns before the main staff report is issued, and one in the fall to receive input on specific options as recommended by City staff. EOLO will monitor the steps being taken, and provide further information about the consultations. The ongoing push comes from ACORN and other left-wing housing activists. It has received a more welcome reception among a few Councillors than such advocacy has in the past. Another trigger for City staff was last year’s complaints about noisy parties at Airbnb rentals in ground-oriented condo complexes. City staff are studying both short-term rentals and long-term rentals, and will make two sets of recommendations, one set for short-term rentals and one set for long-term rentals. City staff sought a consultant to review regulatory options for both short-term and long-term rentals together. However, they could not find a single consultant to do the work they wanted. As a result, City staff broke down the work into four separate work packages, as follows: 1 – Environmental Scan 2 – Rental Market Analysis 3 – Public Opinion Research 4 – Local Regulatory Review Reports 1 and 2 will be issued shortly “to inform the public consultation” about community concerns this spring. The Environmental Scan includes academic research on the impact of Airbnb and other short-term rental systems on the rental housing supply. We understand that the Rental Market Analysis includes a ten-year forecast of supply and demand for both the purpose-built rental market and the secondary market, including rooming houses and shared accommodation.
rentalhousingbusiness.ca | 53
The local regulatory review consultant has just been engaged. That research will review the regulatory systems for both short-term rentals and long-term rentals used in other cities across North America. City staff are also analyzing service requests for by-law enforcement, including the types of calls, the types of buildings for which the calls were made, whether the calls were residents complaining about other residents or tenants complaining about landlords, and any trend lines within those issues. EOLO has met with City staff on several occasions. We presented our objections to the licensing of long-term rentals as set out in the box on page 55. We will meet City staff again as often as needed. EOLO will also engage with the consultants performing the Local Regulatory Review.
Some possible issues What staff hear from tenant advocates is that some tenants are unaware of their rights or are afraid to enforce their rights, and that some unscrupulous landlords take advantage of vulnerable tenants. City staff have asked EOLO for suggestions about how those concerns can be addressed. Some ideas City staff are asking about include: • Accepting complaints anonymously • Establishing some process to address complaints that is quicker and easier than the Landlord and Tenant Board • Performance-based licensing • Licensing based on the size, age or type of property Performance-based licensing means licensing only for landlords against whom a threshold number of complaints are received or found to be legitimate. EOLO pointed out that the threshold number of complaints would need to be a percentage of the landlord’s suites, not a simple number of complaints. In addition, the complaints would need to be valid complaints (i.e., complaints about common area work or work that the landlord had not done after the tenant has notified the landlord). Further complications of performance-based licensing include the need for an appeal mechanism, and for a process for a landlord to exit from the licensing regime. EOLO is opposed to such a system.
Steps the rental industry will need to take For our views to be heard most effectively, the following steps will be needed by EOLO, by EOLO members and by other rental providers. EOLO will need to: • Participate in the process for producing the Regulatory Review and the staff report • Engage with EOLO members about our key issues and ideas • Decide on what measures we can recommend or live with to avoid full blown licensing (if any) • Report on the process, and on the reports, to EOLO members and other rental providers • Encourage landlord input into the public consultations, both from EOLO members and from other landlords
54 | March 2019
ARGUMENTS AGAINST LICENSING
EOLO members will need to: • Engage with the EOLO leadership about key issues, ideas and arguments • Work with the EOLO leadership on what measures we can recommend or live with to avoid full blown licensing (if any) • Provide input into the public consultations Other rental providers will need to: • Engage with the EOLO leadership about key issues, ideas and arguments • Work with the EOLO leadership on what measures rental providers can recommend or live with to avoid full blown licensing (if any) • Provide input into the public consultations EOLO’s leadership is in touch about the issues with the Ottawa Region Landlords Association (ORLA), the Ottawa Real Estate Investors Organization (OREIO) and Ontario Landlord Watch, as well as with the Ottawa Real Estate Board. We will reach out with more details for EOLO members in May. Ultimately, we all may need to address our concerns and objections to all City Councillors. EOLO and members of the Ottawa Real Estate Board did similar outreach in 2009 when ACORN attempted to drive landlord licensing forward with the support of then Councillor Alex Cullen. At that time, we and others opposed to licensing quashed even the idea of a study on licensing. Please stay tuned for more information about the steps needed.
In speaking with City Councillors and other key stakeholders, EOLO and other opponents of landlord licensing make these points: • Landlords are heavily regulated now, with tenants able to call in City property standards officers to issue work orders, and tenants able to apply to the Landlord and Tenant Board for orders or compensation for persistent maintenance or repair problems. • A licensing regime is not directed at the real problems (which exist in only a few cases), but rather creates new requirements and offences. • The few landlords who ignore their obligations now are probably as likely to ignore licensing requirements, so that a licensing system will primarily impose new requirements and costs on people who are complying with the rules now. • Licensing regimes require landlords to file plans for maintenance and for garbage removal or for parking, when what is required is not a piece of paper in a City file cabinet, but rather the delivery of appropriate services. • Licensing would require a bureaucracy to administer, when the City is trying to contain staffing and operating costs. • Licensing would raise the cost of rental housing, which will tend to make rental housing more expensive. • Licensing would raise the hassle factor in operating rental housing, which will tend to reduce the supply, which will also tend to make rental housing more expensive. • In some cases, licensing smacks of age discrimination because its driving force is often to try to keep student-renters out of neighbourhoods.
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
two networking receptions a year
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 | 55
O O ne n O e Vo ne M ic e e M s , ag sa az ge in , e! k in Th
e. su is xt ne e th in y! s is da e m to ri b â€™ll e sc in ou az ub ty /s ag ha ca s.
t ou ab
Vol. 12 No. 1 March 2019
The official publication of:
56 | March 2019
Failing to regularly inspect and maintain your electrical system can have serious consequencs for your building and tenants.
Your electrical system could be on life support
Canadaâ€™s #1 most widely read publication for Apartment Owners, Managers and Association Executives
RENTT: A look ahead at 2019 Panelists take a look at issues that could affect the rental housing industry both regionally and nationally.
President’s message We have an exciting month coming up with our annual trade show & keynote speaker event on April 16, 2:00 – 5:00 PM. The Spring Hope Food Drive takes place on April 17 and we will have another Education seminar about mortgage & financing with industry tax tips for housing providers on April 23. The City of Hamilton Planning Committee will be reviewing the City Staff report for the pilot licencing program in wards 1 & 8 that should include: • Education for tenants and landlords • Concrete metrics for success • An analysis of staffing levels • An analysis of the financial offsets for such a project • A review of the affordable housing and potential displacement issues of such a project We have also surveyed our members on what they would do with their properties if licencing comes into effect. Our results indicate that they would raise their rents and possibly even sell their properties. We will be sharing our findings in more detail once the survey officially closes at the end of April. - Arun Pathak, President
Recent events Feb 14 Education seminar: LTB & Rental Discounts Allistair Trent gave an amazing presentation about how to implement the prompt payment discount, explaining the importance of how it will help you down the road. He also talked about the above guideline increase (AGI) process and what items are considered capital expenditures. March 7 Dinner meeting: Tribunal Tribulations! We had a panel of experts talk about their
experience at the LTB. They gave some insightful tips on how to be prepared at tribunal, how to learn from their mistakes and what you can do to help get a favourable outcome. They talked about how the Tribunal has changed over the years and gave examples of what to expect in terms of rulings, timing and decisions.
Coming events: HDAA Trade Show Date: April 16, 2019 Time: 2:00 - 3:00 PM (the Trade Show starts after the speakers are done) Location:1555 Upper Ottawa Street, Hamilton, Ontario Topic: Rental Housing: Supply vs demand The presidents of LPMA, WRAMA & HDAA will speak about the struggles and successes each municipality is facing. The President of FRPO will speak about where Ontario is heading and what policies are important for associations to help make a positive change for all housing providers. This mini-association summit will push to promote how landlord groups are important and can make a real change.
Tenant defence fund The City of Hamilton is considering a $50,000 “tenant defence fund” to help Hamilton renters dispute rent increase applications that landlords sometimes make to the Landlord and Tenant Board. The concept of a tenant defence fund to fight above guideline increases (AGIs) suggests there is something wrong with AGIs. It suggests tenants must “defend” themselves from the unwarranted hardship of a rental increase. In fact, an AGI is a legal, fact-based application and may only be granted for eligible extraordinary increases in property taxes, major repairs or security expenditures. The applicant must show documentary evidence of payment for the expenditures,
rentalhousingbusiness.ca | 57
and prove to the adjudicator that the increase is justified. The adjudicators follow strict rules and guidelines and are trained to ensure that they only allow justified increases. Adjudicators are appointed by the government, which recruits individuals through an open, merit-based process. It is essential for Hamilton to preserve its rental housing stock. If we do not encourage companies to improve their buildings, they will deteriorate and will need to be demolished and replaced, probably by condos. Despite constant ongoing maintenance and regular repairs, even major structures like Hamilton City Hall have required substantial major repairs to keep them viable for the future. Investment in rental buildings protects the scarce supply of rental housing in Hamilton. Even if some tenants would prefer to pay a lower rent rather than to occupy a safer, better quality building, the owner must act in compliance with the law and in the interests of all current and future tenants. The Landlord and Tenant Board will not grant an increase for any expenditure that is not necessary or that is primarily cosmetic. Replacing dirty or torn flooring after 20 years of wear is important both for tenant safety and for ensuring a quality place to live. Companies that choose to improve their older buildings need income to pay for major repairs and the only source of income is from rents. Contrary to popular opinion, there is no pool of extra money from rents for large-scale improvements when the cost of providing rental housing is rising at 4 or 5 per cent a year, compared to the guideline increase of 1.8 per cent. We understand that many people in Hamilton have an income issue; that is well recognized and documented and needs to be addressed by all of society. These tenants have insufficient income and are vulnerable to any increases in their living costs, whether for rent, food, utilities, transportation costs or anything else. We also understand that tenants feel powerless against unexpected increases in their monthly expenditures, especially when they are on a fixed income with no ability to increase it. We feel the same way when mortgage rates go up, when gas, electricity, water, heat, hydro and taxes go up, not to mention the threat of licencing adding to our monthly expenditures, with only one source of revenue to work with. We understand that we donâ€™t have the same fear of losing our home because of unexpected expenses. We do, however, have the fear of losing our livelihood. If that happens, it will put an even larger strain on renters. If a tenant canâ€™t pay a $30 rent increase because he or she is on a fixed income, it is far more economical for government to provide that cash support directly to the tenant, rather than stop the landlord from investing in improvements and recovering part of the cost in rent. That will only lead to the deterioration of the building, harming taxpayers who are then called on to provide affordable housing at much greater costs. The truth is that housing providers and tenants depend on each other; creating a fund that encourages disputes only benefits those who benefit from tenants and housing providers being at odds. Professional agitators are paid to go into a building and encourage
58 | March 2019
illegal actions like rent strikes and harassing building staff and owners. We are against any public funds that would assist any tenant, paralegal or organization who in any way promotes or organizes any illegal activity such as a rent strike. If it is brought in, we sincerely hope there are steps to ensure the tenant defence fund does not promote or condone this type of behaviour. Rental housing providers are feeling threatened and under attack on many fronts. It seems to be acceptable to compare us to the oil industry and the tobacco industry to prove housing providers only care about the bottom line. We want everyone to have a safe, affordable place to call home â€“ just like all Canadians should have access to healthcare and basic education. The difference from healthcare and education is that society sometimes looks to housing providers to shoulder the cost alone. If we followed that logic, doctors and teachers should be paying for our treatment and education. We do not ask gas stations to supply gas at 50 cents/litre to people with low incomes or the grocery store to drop all their prices because some people canâ€™t afford to pay. However, it seems acceptable to ask rental housing providers to provide housing at below market rents. Creating a tenant defence fund to help tenants fight a rental increase is misdirected. The $50,000 that the City is considering spending could be better spent on a shelter allowance. It could give 40 families (approximately 100 people) a shelter allowance of $100 per month for a year, a real benefit to people in poverty who struggle with their rent. Another alternative the City could consider is putting the money
toward a reduction in the Multi-Res tax rate. The current tax rate is unconscionable; if taxes are reduced by 2.5 per cent or more, that will reduce rents across the City and help all residents of multi-residential properties. Another problem with creating a fund like this is that there will be demands to raise it every year. The return on the money put into this endeavour will be close to zero. Tenants do not face higher AGIs due to not having legal representation, and a fund is highly unlikely to prevent or reduce increases granted. All it will achieve is more delays at the Landlord and Tenant Board. There is a risk that a fund like this will cause some rental housing providers to put off work that needs to be done and will cause a deterioration in the housing stock. As pointed out, the number of AGI applications has increased, which reinforces the fact that Hamilton desperately needs landlords to improve the rental housing stock. We applaud the companies taking the initiative to improve living conditions in Hamilton. In closing, HDAA cautions the City that there could easily be a negative impact from creating this fund, and that it will not achieve the desired results. We implore you to look at alternative ways of spending $50,000 that could help those in need, such as shelter allowances or a reduction of the multi-residential tax rate. The best protection for tenants is healthy competition and choice, which can be promoted by policies that will increase rental housing supply for all levels of affordability and incomes. That is a better solution than creating a program that encourages division and discourages building rehabilitation.
Hamilton and District Landlords Since 1960, the Hamilton and District Apartment Association has grown significantly. Our members manage over of 30,000 units throughout Hamilton, Burlington, Brantford, Guelph, Mississauga, Oakville, St. Catharines and into the Niagara Peninsula. The association is a highly respected organization, sought out regularly by government, industry, media and the public.
Interested? Call us or join online! Ph: 289-208-5445 Web: www.hamiltonapartmentassociation.ca
rentalhousingbusiness.ca | 59
Brought to you by:
RHB SIDEBAR Capital Markets & National Investment Snapshot
National Apartment Group
Alberta Multifamily 2019 – A Shift to Core Assets as the Cycle Matures DAVID MONTRESSOR, Executive Vice President, CBRE - National Apartment Group
Alberta saw a meaningful increase in overall transaction activity through 2018 with an 80 per cent* spike in Edmonton’s annual investment volume. Calgary’s investment volume remained in line with elevated levels seen in 2017, showing a slight increase over the previous year. REITs and institutional advisors were the principal source of purchase activity with their share of trade volume totaling 22 per cent and 34 per cent, for Edmonton and Calgary combined. The multifamily market in Alberta continues to be segmented by asset quality. Location and building age are having an increasingly important impact on late cycle pricing with investor focus narrowing toward A-class properties. Preference for newer rental product in central neighbourhoods has supported values in the top segment of the market, which has shown the most resilience over the last three years. As Alberta finds its footing and emerges from an economic trough, core multifamily in Alberta is positioned to outperform beyond the maturation point of the current cycle. Investor preference and market segmentation is showing in cap rates as yield spreads widen between multifamily asset types. The trend is most pronounced in Edmonton where Class A product commands a larger premium over suburban and older assets than what is typically seen in other major Canadian markets. Demand for multifamily investment is relatively strong in Calgary where the spread between higher yields and those of core assets are tighter. The likelihood of continued flight to quality will create risks and opportunities over the short term. Trade volume is expected to maintain its elevated levels through 2019, which will correspond with a period of price discovery for all multifamily assets while demand concentrates on best-in-class rental properties. *Does not include Seniors Housing
60 | March 2019
Local Knowledge. National Reach. National Apartment Group
OFFICES ACROSS CANADA
IN SALES VOLUME
Contact us to learn more about how we can help you
RHB, RHB Magazine, RENTT