RHB Magazine October 2020

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Vol. 13 No. 4 October 2020

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

The official publication of:

RHB Industry

Report 2020 A comprehensive look at the status of Canada’s rental housing industry

Economic and financial analysis of the rental housing industry Where are the money, the industry, and the economy headed into 2021?

CFAA Report on the September Throne Speech

Non-profit groups helping tenants find homes in the Yukon

Unlock your potential with property management software

How will the government’s plans affect the rental housing industry?

A grassroots program helps people with mental health challenges to find rental housing

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EDITOR’S NOTES Stand still or run quickly? Depending on who you ask (and when you ask), experts will either recommend you get your money into – or out of – the market as quickly as you can, or stand pat and do nothing until the situation changes. Of course, they’ve offered this same advice during the best of times. I don’t know whether it’s better to invest now or wait, but I know it’s a fool’s errand to try timing the market to get the best return. I’m considering some opportunities, but I’m not one to take big risks, which makes it an even bigger challenge. Decisions, decisions… In the meantime, I’ll enjoy celebrating my daughter’s 10th birthday in our family bubble. This issue of RHB Magazine features an industry report for 2020, with a look at what has happened to the rental housing industry during COVID-19, and what is to be expected going forward. We interviewed leadership at both a public and private REIT, an owner of multifamily property, and a building developer, who provided their perspectives on the status of the rental housing industry and how their situations look going forward into the new year. Related to the feature is an article that provides an economic and financial analysis (based on interviews with a well-known economist and a financing professional) of the rental housing industry as it currently stands, as well as what is expected in the coming year. We also took a look at what non-profit organizations in the Yukon are doing to help people with mental health conditions to find rental housing. Make sure to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. Of course, have a read of Suite Count for a look at the market, and the Final Take Away for some tips on using property management software to your advantage. As usual, we enjoy hearing from our readers and support twoway communication. If you have any comments or questions, send them to david@rentalhousingbusiness.ca. I look forward to hearing from you.

Co-founder, Publisher

Marc Côté marc@rentalhousingbusiness.ca

Associate Publisher Nishant Rai


David Gargaro david@rentalhousingbusiness.ca

Contributing Editor

John Dickie, President CFAA jdickie@rentalhousingbusiness.ca

Creative Director / Designer Scott Clark

Office Manager Geeta Lokhram


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

Enjoy the issue! David Gargaro Senior Editor

4 | October 2020

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

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VOL.13 NO.4 2020

Non-profit groups helping tenants find homes in the Yukon A grassroots program is helping people with mental health challenges to find rental housing.

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

RHB Industry Report 2020

Hot Topics: WRAMA reports on the Waterloo rental market, COVID-19 protocols for guests and unit turns, and tax consideration under COVID-19. pg. 45 EOLO addresses the Ontario rent freeze for 2021, other changes to the RTA, and City of Ottawa support for tenants and planning for solid waste. pg. 49

Key members of the rental housing industry discuss how the market has changed and what it will look like going forward.

HDAA discusses the 2021 Ontario rent freeze in the context of the history of rent control, and its impact on rental housing supply. pg. 53 LPMA reports on protocols to manage COVID-19 risks, including face masks, dealing with deliveries, maintenance calls, and showing units. pg. 57

The Member Associations

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

Economic and financial analysis of the rental housing industry An economist and a financier explain where the money, the industry, and the economy are going for the remainder of 2020 and into 2021.

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PRESIDENT’S CORNER In his comments in this issue of RHB Magazine, Benjamin Tal says, “This is the only recession in history that saw disposable income rising.” See page 24. Hopefully, you heard or will hear Benjamin speak on October 20 at the first of CFAA’s six key webinars in October and November, 2020. If you missed him, register for CFAA’s remaining webinars and listen to the recording of Benjamin Tal’s presentation compliments of CFAA. For more on CFAA’s webinars, see page 41. What the Government does is extremely important in this exceptional time. Our best insight into what the Government will do is found in the Throne Speech, delivered on September 23. The key statement was the Government “will support people and businesses through this crisis, as long as it lasts, whatever it takes.” CFAA applauds the Government for its determination to provide the support needed throughout the COVID-19 crisis. CFAA is sure than the other parties who could govern Canada would also support people and businesses through this crisis, as long as it lasts, whatever it takes, although they might have a different view of what it takes. What all of Canada’s political parties are missing is the degree to which rents diverge across Canada and across most provinces. At $2,000 per month, CERB and CRB are more than adequate in Edmunston, N.B., and most of Quebec, where two-bedroom apartments rent for $500 per month, but woefully inadequate in Toronto or Vancouver where such apartments rent for $1500 per month or more. What Canada needs to do is to address the divergent cost of housing. That would best

8 | October 2020

be delivered by a rent subsidy program that addresses the actual rents that people have to pay. The Throne Speech also said the Government will identify additional ways to tax extreme wealth inequality, and gave three examples, but there was no reference to resurrecting the Interest Deductibility Limitation, proposed early this year, and no specific reference to any review of capital gains taxes. CFAA alerted the Government to the negative effects both issues would have on rental housing supply and affordability. CFAA is very pleased that the Federal Government has listened to our warnings. At appropriate times, CFAA will continue to press those issues on the Federal Government. For more on the Throne Speech, see page 35. And, as suggested above, register to attend some or all of CFAA’s webinars at www.cfaafcapi.ca!

John Dickie, CFAA President John Dickie, CFAA President

rentalhousingbusiness.ca | 9

In this issue of... NATIONAL OUTLOOK 35. How will the Federal Government’s plans to fight the COVID-19 recession affect rental housing providers? Learn more from CFAA’s report on the Throne Speech.

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. How will the planned changes to the First-Time Home Buyers Incentive affect rental demand? Learn about the current program and where to find out about changes.

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

41. W hat can you learn from CFAA’s webinars this Fall to improve your rental earnings?

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

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

The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $525 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.

10 | October 2020

Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703

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Public REIT Property Developer

Mark Kenney, President and CEO, CAPREIT Jason Birnboim, President, Beaux Properties International Inc.

Private REIT

Matthew Organ, President, Skyline Apartment REIT

Multifamily Property Owner

Robin Kelley, Partner, Le Groupe Denux

RHB’s Industry Report for 2020 provides a comprehensive analysis of the status of the rental housing industry in Canada in the midst of the pandemic, with a look toward what will happen when it ends. We interviewed key members of the industry, including one public and one private REIT, an owner of multifamily properties, and a developer, and asked each of them about various topics, including how the rental housing market has changed and what it will look like going forward.

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Industry 20 Report 20 REITs RHB: REITs have dropped in value, although multifamily has fared better than other sectors with a lot of cash on hand from 2019. Indications are that their performance should continue in 2020 and 2021. What are you projecting for your REIT’s performance for the balance of 2020 and looking further into 2021? Mark Kenney: We remain positive of strong performance for the balance of 2020 and 2021. Our Net Operating Income margins have remained strong even though bad debts have been higher compared to prior years. Occupancies have remained at near full levels in the residential portfolio, with marginal declines. CAPREIT has a strong balance with low leverage and significant liquidity. We could leverage up to acquire accretive; however, pricing for acquisitions appears to becoming more competitive. Interest rates dropped in 2020 and are at historical low levels, resulting in lower interest expense on refinancings and new financings. Rates have dropped from 2.5 per cent for 10-year money to 1.7 per cent. During the pandemic, we have characterized our business as back to basics: collecting as much rent as possible each month, filling vacancies, and investigating areas where we might find operating efficiencies. We are an affordable proposition for people, which we believe is a highly defensive asset class during the pandemic.

Matthew Organ: Throughout COVID-19, Skyline Apartment REIT maintained its value. As a private REIT, it is valued based on actual value of hard assets, as well as income the assets generate, and is less correlated with the ups and downs of public markets. Distributions have remained unchanged as cash flow has been stable; with nine months behind us, our 2020 Net Operating Income is forecasted to be on budget. From an operations standpoint, suite turnover is low and demand for apartments remains high. As we look to 2021, we anticipate low vacancy rates will continue, and we have significant mark to market rent growth opportunity to be realized, which will help ensure stable financial performance. In spring 2020, we temporarily slowed our acquisition process until we had the certainty of investor support to continue with our growth strategy, which was back on track by midsummer. We are anticipating the REIT to grow by approximately $400 million to $500 million by year-end 2021.

RHB: As REITs have had consistently positive cash flow, are there more opportunities to purchase product? Why or why not? Mark Kenney: We continue to see high demand and competitive bid processes in all major markets across Canada, except Alberta given the impact of the struggling oil industry.

rentalhousingbusiness.ca | 15

We are seeing a robust deal flow, as well as demand in the marketplace. All deals shelved during COVID-19 shutdown are now launching to market. Challenges with managing rent collection and COVID-19 protocols are helping to push private owners who were on the brink of retirement to pull the trigger on selling assets. Fear of change in tax legislation as well as the change in CMHC financing equity takeout has pushed some private landlords to sell. Multi-family asset class continues to be a stable, resilient, and defensive asset class when compared to other real estate asset classes such as retail and office. Interest rates are at all-time lows, and financing is available from lenders to solid multi-family players, which is driving demand for product. There is still significant difference between cap rates and interest rates, which is increasing demand for products and pushing cap rates down. Institutions, private buyers, and lenders are viewing COVID-19 as short term, and are comfortable investing and providing financing amounts same as pre-COVID-19.

given their stability and the strong fundamentals of the rental residential business.

Matthew Organ: Multi-residential real estate

RHB: How will government incentives and programs affect you when they end?

has the advantage of providing the basic need of housing, which people will always require. Thus, we believe the rental housing industry is a fundamentally stable sector for investment, perhaps as much as a food retailer. As at midSeptember 2020, the REIT owns 215 properties in 59 communities across eight provinces. The REIT focuses on purchasing in secondary and tertiary markets where demand for housing is high, and the volume of new development is typically lower. In the secondary and tertiary Canadian markets where the REIT is operating and growing, the multi-residential asset class has remained in high demand. This has made purchasing existing properties competitive and made new development feasible. We remain strategic with acquisition opportunities and continue to capitalize on opportunities we believe add longterm value to the REIT.

RHB: How will the current financial situation change REITs’ short- and long-term plans? Mark Kenney: We remain highly opportunistic in our growth programs, and our balance sheet strength allows us to capitalize on accretive acquisition opportunities should they appear. We are confident that the debt markets and financing will remain highly available for our properties

16 | October 2020

Matthew Organ: As a private REIT, we want to ensure we have enough resources to weather any storm. COVID-19 put us to the test, and thus far we have demonstrated our strength. At the beginning of the pandemic, we paused some capital projects and plans for process and product improvement until things settled. Investors felt uncertainty, and rightfully so; no one knew where the world was headed. As the months unfolded, the REIT maintained stable occupancy, collections, and income. It provided investors the peace of mind they needed during turbulent times. We are continuing down a path of strategic growth and development while taking advantage of excellent financing opportunities. In the current financial environment, historically low interest rates provide a strong opportunity for REITs to buy and build new product, which is desperately needed in most areas of the country as an affordable alternative to home ownership.

Mark Kenney: CAPREIT doesn’t have the data to know the percentage of tenants on government incentives and programs. September is the last month for CERB. We believe we must have benefited from this. However, the affordability of our product should benefit if the employment and economic situations get worse. The REIT has a compassionate call program to contact tenants, and tenants having difficulty making payments are put on a deferred payment plan. To date, under 0.5 per cent of tenants are on the deferred payment plan. In certain jurisdictions, the government has introduced legislation to support tenants by temporarily not allowing rental increases for 2021. This should only exaggerate the mark to market on our rents and reduce rental asset development and supply. The temporary legislation for “no evictions” has now been lifted, and landlords can send eviction notices if rents are not received. Rental tribunals are open for virtual hearings. This should help rent collection for those taking advantage of COVID-19 to not pay rent when economic realities have not changed. The majority of our portfolio is affordable and mid-tier so rents are more affordable compared to the luxury segment. We are primarily located in the residential suburbs of major Canadian cities, which we believe will continue to be in demand.



rentalhousingbusiness.ca | 17

Matthew Organ: The federal government’s expansions regarding Employment Insurance, and the implementation of the Canada Emergency Response Benefit, resulted in financial assistance reaching residents quickly, which had a positive effect on maintaining the REIT’s rental income. Our property management staff worked directly with tenants to ensure they were aware of all programs and resources available to help them financially. There is speculation that when government incentives come to an end, many renters will find it more difficult to pay their rent. In addition to our more supportive approach to rent collections, we have an in-house Tenant Support Team specializing in sourcing community resources for tenants, and an in-house tenant assistance program, R.I.S.E. (Reach, Impact, Support, Elevate), which has saved hundreds of tenants from potential eviction since inception in late 2018.

Multifamily Property Owner RHB: Multifamily cap rates are the lowest of any asset class in Canada. What are you seeing or projecting for performance for the balance of 2020 and looking further for 2021? Robin Kelley: This depends on the market and asset. Overall, we see things remaining the same. However, there are signs of downward pressure on the upper tier of the market with newer, more expensive product starting to see increases in vacancy and downward pressure on rents. While vacancy rates may be ticking up, it is not easy in many regions to find apartments as availability rates are low with less people moving around. Ironically, and not surprising when you think about it, suburban and smaller markets appear to be holding out well and in some cases are having upward pressure on rents. We see the central business districts of larger, more traditionally stable markets continuing to be under pressure due to the reduction of people working in downtown offices and in supporting hospitality industries. This likely will continue into the first half of 2021 and until people and tourists return to downtown cores. Surprisingly, some markets considered C and B class are holding out well. In our buildings, there were fewer tenants on COVID-19-related

18 | October 2020

government assistance programs in these markets than in more traditionally stable ones.

RHB: Are there more opportunities to buy during COVID-19 than usual, or fewer? What about post-COVID-19, or earlier next year – will there be greater opportunities to buy? Will you be exploring potential developing opportunities? Robin Kelley: We have active construction projects under way that started pre-COVID-19. For new projects, we are focusing on obtaining approvals and entitlements and taking a wait and see approach. We are hesitant to start projects with supply chains being disrupted and uncertainty over COVID-19 case trends. We are focusing on being ready to react quickly when the situation stabilizes and construction costs normalize. For purchases, we are starting to see more product for sale but prices have not changed. There seems to be a gap between buyer and seller as per usual. With low interest rates, we do not see much movement in cap rates; however, more attention will be paid to downside and upside risks to rents and vacancy. Today is a great opportunity to purchase a building where rents are below market, as downside risk is limited and interest rates are very low. However, we would be hesitant to purchase a building with market rents just because interest rates are low, without adjusting values for future increase in vacancy or stagnant rents. The one thing unknown going forward is how recent changes made by CMHC regarding refinancing and equity takeouts will impact the market. Long term, this may be more significant than people think, and could increase cap rates at the low end where investors were relying on equity takeouts in the future. These changes happened post-COVID-19 lockdowns so the market has not had time to digest the impacts. We see the central business districts of larger, more traditionally stable markets continuing to be under pressure due to the reduction of people working in downtown offices and in supporting hospitality industries.

RHB: How will the current financial situation change short- and long-term plans? Robin Kelley: We always are focused on retaining tenants, but this has heightened our focus. We are not looking at acquisitions that assume future increases in rents to rationalize continued on page 22




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The public perception of landlords Besides COVID-19, another issue that will affect the future of rental housing is the perception of rental housing held by the public and by political decision makers. Too many people believe that private landlords do not care about the well-being of tenants, and thus do not serve the interests of tenants. That belief usually arises when people think about a large corporate landlord or a real estate investment trust (REIT). In themselves, corporations and trusts have no feelings; only people have feelings. But many corporate and REIT owners and managers care about their tenants. Many have Corporate Social Responsibility (CSR) policies, and seek to show tenants and others that their leaders care about the impact of their actions on people. They are to be applauded for that, and raising broader awareness of landlords’ CSR policies is one effective way of improving the perception of rental housing providers. Likewise, many rental housing providers do good works in their communities, or assist their tenants, and making that more well known would also help improve the perception. As well, landlords who do not support charities or good works are almost always still serving the interests of people. When people go to a supermarket to buy groceries, we don’t need Metro or Loblaws to “care about us” other than offering us groceries to buy, and keeping the store clean. Grocery stores offer thousands

20 | October 2020

of products to suit virtually every taste and different budgets. Grocery stores make money for their owners by being careful about the prices they pay, and being efficient about how they sell their products. But grocery stores bring us our food, and offer customers a choice of quality food products at a fair price, based on their costs. And that provides tremendous value to everyone. Rental housing providers also provide value to their customers by seeking to provide rental offerings of high value at the lowest cost. Because there are so many rental housing providers in virtually every community, we do not have market power. Rents are determined by the amount of rental supply, and how much rental demand there is at any point in time. The main value that every landlord brings to society is the rental units they offer in the marketplace. More rental housing means lower rents, or rental units of better quality for the same rent. Landlords do not need to care about more than delivering rental units and services that tenants want at the lowest cost, but we all care very much about that, and that is what really matters. As an industry, rental housing providers need to get more people to understand and believe that renters keep us serving the public interest the same way customers keep grocery stores serving the public interest, while owners serve their own interests too. By John Dickie, President, CFAA


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a current low cap rate. From the construction side, we have been taking advantage of some programs CMHC has to offer regarding new rental construction.

RHB: How will government incentives and programs affect you when they end? Robin Kelley: The larger the market, the higher percentage of residents receiving some sort of COVID-19 relief. A lot is unknown and will depend on what happens with recent increases in COVID-19 cases and the continuing opening of the economy. We anticipate some tenants having more difficulty to pay but the fundamentals of rental housing were good going into this and remain relatively strong. We have relatively few buildings located in the core areas of large cities. This appears to be playing to our advantage as these buildings appear to be absorbing more negative impacts of the changes in the labour market.

Property Developer The low cap rates reflect the low risk and the long-term stable outlook for the best asset class to own when it comes to incomeproducing real estate.

RHB: COVID-19 has compelled lot of people to look to the suburbs. With more people working from home, do developers expect more developments to move to the suburbs, or is the city core still the place to be? Jason Birnboim: In my opinion, COVID-19 is extremely serious and disruptive to our way of life in Canada and has touched everyone’s personal and business lives dramatically. However, I view it as a temporary global health emergency that will be brought under control in six to nine months through widespread vaccinations and hopefully bring a return to pre-COVID-19 routines and lifestyles within two years. While developers need to be mindful of all factors and forces affecting their business models, if the development of apartment living of one kind or another is your preference, then the urban environment will be

22 | October 2020

more desirable overall. Suburban land is less expensive the farther out you venture, amenities are less appealing and generally speaking single family housing is the goal of a suburban resident. You can’t match the energy, excitement or dynamism of the city in the suburban landscape, digitally or otherwise. While some people are seeking to escape the virus by escaping to the suburbs, I believe an equal or greater amount will return to the city as soon as it is deemed safe and secure. The current American urban landscape looks different to me at the moment, and more disturbing from a civil unrest perspective than the more moderate and stable Canadian one.

RHB: What does the development market look like for the second half of the year and going into 2021? How will developers change their strategies going forward? Jason Birnboim: You would be reckless if you weren’t extra cautious in your assumptions and projections. The critical factor of course is a return to pre-COVID-19 immigration numbers.

RHB: Multifamily cap rates are the lowest of any asset class in Canada. What does this mean to developers going forward? Jason Birnboim: The low cap rates reflect the low risk and the long-term stable outlook for the best asset class to own when it comes to incomeproducing real estate. A developer must be extra disciplined in his or her proforma budgeting because the margin for error is very small.

RHB: How will government incentives and programs affect you when they end? Jason Birnboim: The government has a responsibility to ensure sufficient support to all renters who have been affected by COVID19 until the pandemic is brought under control. That should be one of its primary goals. As far as government incentives for new rental multifamily development, the margins on new developments are so slim that if the government wants to see new buildings get built at all and new rental stock in the market, incentives are the only way it’s going to happen.

RHB: Thank you for your input and participation.

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Economic and financial analysis of the rental housing industry By David Gargaro

COVID-19 has had a significant financial impact on the Canadian economy, the real estate industry on a national, regional, and municipal scale, and the rental housing industry as a whole. Multi-family cap rates are the lowest of any asset class in Canada, and people still need affordable places to live, which means that companies continue to invest in and develop multifamily rental properties. With these factors in mind, RHB Magazine conducted interviews with an economist and a financier to understand where the money, the industry, and the economy are going for the remainder of 2020 and into 2021.

Economic outlook: Benjamin Tal, Deputy Chief Economist, CIBC World Markets activity will be 4.8 per cent below the level seen before the crisis. During the financial crisis, the cumulative decline in real GDP from peak to trough was 4.4 per cent. The current rise in activity will only lift us to troughs seen during the darkest days of the worst global recession.

RHB: Do you expect an economic recovery going forward into 2021?

RHB: What do you project for the economy for the rest of the year? Benjamin Tal: We’re in the middle of the strongest economic recovery we’ve ever had. However, the 40 per cent seasonally adjusted annual rate projected advance in third quarter real GDP will not be enough to balance out the unprecedented economic collapse of the second quarter. By September, we estimate the level of real economic

24 | October 2020

Benjamin Tal: Roughly two-thirds of the economy experienced something of a V-shaped rebound in May and June, while the rest experienced something like a capital L. The companies in this second group were greatly affected by travel restrictions and safety concerns, including restaurants, hotels, and those involved in mass transit. The V-shaped recovery largely represents industries with operations that were able to reopen their doors and call workers back once restrictions were lifted. Led by those sectors, the recovery across the economy has been more vigorous than previously anticipated, and has led us to upgrade our forecast for 2020. But that momentum has already faded and now further easing of restrictions seems unlikely with a rise in virus cases. It seems probable that some restrictions will be re-imposed as the year comes continued on page 26

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to an end. We expected the economy to hit a ceiling before a vaccine was deployed, but it’s happening earlier than expected. This has seen us lower the growth rate for 2021. The economy will finish next year largely where we expected as our last set of projections. The path looks a bit different, with growth showing up earlier.

RHB: How is the drop in GDP tied to employment? Benjamin Tal: The drop in GDP was more pronounced than the fall in employment and the rebound was more vigorous. While GDP dropped more than 18 per cent compared to less than 16 per cent for employment, both were about 9 per cent below pre-COVID-19 levels by the end of June. The drop in GDP relative to employment might have been because many affected operations held onto employees with the help of government support. But industries that had V-shaped recoveries are more productive and require fewer workers to generate the same amount of GDP as industries in the L-shaped economy, leading to a notable increase in average productivity in the economy. The struggles of the labour market relative to the bounce in GDP are likely to create a higher unemployment rate. We project the unemployment rate to average roughly 8.5 per cent in 2021, or about 3 per cent above precrisis level.

RHB: How did government incentives and programs affect the economy, and what will happen when they end? Benjamin Tal: Government support offset the drop in employee compensation in the second quarter. This is the only recession in history that saw disposable income rising. Government support and savings from not spending on services are why many retailers have seen strong demand for their wares. Another source of savings came from mortgage and loan deferrals in which households were able to take a vacation from their monthly financial obligations. We estimate that roughly $10 billion in payments were deferred from March to September. There’s evidence that a significant portion of the deferred payments were kept in deposit accounts as opposed to being spent, while some was used to optimize debt. However, unless extended, Canadians will begin to run through their employment insurance eligibility in the second quarter of next year, when the unemployment rate is likely to hover around the peak of the 2008-09 financial crisis. Accordingly, we see household spending remaining below its pre-crisis level through 2021.

26 | October 2020

RHB: Unemployment is very high, discretionary spending is low, and the economy has contracted. How do you project these will affect the multi-residential industry? Benjamin Tal: While housing activity has been roaring back in recent months, we continue to see a softening ahead. As immigration has stalled, and swarms of younger Canadians are again living with their parents, both resale and construction activity are likely to cool in the months ahead. A large part of the surge in housing starts has been in the downtown condo space, which has already been seeing sagging rental demand.

RHB: What do you project for monetary policy going forward? Benjamin Tal: The strengthening in the Canadian dollar against falling oil prices shows how times have changed. But Canada will need a weaker Canadian dollar to boost non-energy exports. The economy has only seen healthy contributions from exports when the Canadian dollar has been weaker than 1.30. But even that would leave the economy at the end of 2022 roughly 1.5 per cent below where the trend prior to the pandemic would have taken it. As a result, policymakers have much to do. The Bank of Canada has its pedal to the metal and has committed to keeping it there, so the wild card will be fiscal policy. Canadian governments have used fiscal space to blunt the economic impacts of the virus and will only withdraw it as job creation takes hold. Fiscal stimulus in Canada was more robust than most OECD countries when compared to the economic damage. Once a vaccine is deployed and restrictions are fully lifted, the economy will be less dependent on fiscal handouts.

We project the unemployment rate to average roughly 8.5 per cent in 2021, or about 3 per cent above pre-crisis level.

continued on page 28

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Financing, borrowing, and investment: Rena Malkah, President, Cyr Funding Inc. RHB: There have been requests for loan deferrals and forbearance in the first half of the year. Where is this going in the second half of the year? Rena Malkah: There have been loan deferrals and forbearance during the first six months of COVID-19 from March to September; however, these circumstances are over now. For the borrower, it is not helpful to defer a loan because any deferred interest is added to the loan amount and then they have to pay interest on top of interest. Loan deferrals are also negatively impacting personal credit as they show up on the borrower’s credit bureau.

RHB: What do financial companies want to see from borrowers/investors who are looking for funding during COVID-19? RHB: With the low cost of borrowing, are investors, developers, and building owners taking advantage of the opportunity? Rena Malkah: Yes, investors, developers, and building owners are making the most of the low borrowing rates and purchasing opportunities to invest in the rental housing market. However, they are approaching these situations with a more cautious approach than they have in the past due to the uncertainty of the COVID-19 situation.

RHB: How have borrowing and investing changed since the arrival of COVID-19? Rena Malkah: Borrowing and investing have changed as local investors have to put more down payment, while foreign investors and borrowers have to pay 15 per cent tax. Mortgages may not be approved at Canadian banks as new to Canada and foreign investor programs are not readily available anymore. Therefore, foreign investors have to pay full purchase price to buy the property or get private financing, which is available through mortgage brokers.

RHB: Where is the money going? Who is investing in what?

Rena Malkah: Financial companies want bank statements to prove that the rents are actually being received and confirmation from appraiser that the rents are at market rents instead of just accepting the rents. Mortgage amortizations have been reduced. Financial companies are more diligent on personal and business income confirmation as well as gifted sources for down payment.

RHB: Do investors have more opportunities to buy during COVID-19 than usual, or fewer? Rena Malkah: Investors still have many opportunities to buy properties and buildings as there are distress situations due to companies’ need to rid themselves of underperforming assets. They should try contacting receivers who manage real estate and get a deal below market value.

RHB: Do you see greater or fewer opportunities to invest in rental properties in 2021? And why do you believe this will be the case? Rena Malkah: We see more opportunities for investing especially if there is a second wave or lockdown. Values may be lower and a good time to buy. Interest rates may also go down again.

Rena Malkah: Investors are interested in buying income-producing properties such as multifamily and industrial buildings. Retail plazas are not faring as well as they have in the past due to closures of many businesses temporarily during COVID-19 or permanently. Online shopping has reduced foot traffic to malls across the country. Hospitality properties have also been hit hard, as have gas stations, so those types of properties are not a preferred investment at this time.

RHB: What will be the impact when government incentives and programs come to an end?

28 | October 2020

RHB: Thank you for your input and participation.

Rena Malkah: The impact when government incentives and programs come to an end will be serious as many individuals and employers will not be able to earn sufficient income or cover expenses, especially if a second wave results in another lockdown.

Canadian Federation of Apartment Associations Canada’s voice for the rental housing industry at the federal level

Join Canada’s leading rental housing providers, suppliers and industry associations.

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Find out more about the benefits and costs of a CFAA membership. www.CFAA-FCAPI.org | admin@cfaa-fcapi.org

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SUITE COUNT Capital markets & national investment snapshot

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What is the market saying? CBRE Capital Markets – National Apartment Group | David Montressor, Executive Vice President

In order to gauge the impact of COVID-19 on the multifamily asset class, CBRE surveyed over 80 Canadian multifamily owners and operators. In aggregate, these respondents represent nearly 200,000 units across the country. Participants were asked to provide insights on their portfolio’s performance as well as the challenges they had faced throughout the pandemic. Positive indicators – Rents and collection rates Over half of the survey respondents indicated that asking rents have either held or increased since Q1. The majority of these groups indicated they would be pursuing increases as initially budgeted preshutdown. For those who responded otherwise, increases to asking rents will be delayed until 2021. Sixty per cent of survey respondents also indicated positive forward-looking expectations regarding rent collections. Geography was the main variable driving divergent survey results for both questions. Concerns remain in select subsectors of the market, including Alberta and high-end segments of Vancouver and Toronto. Heavily impacted areas While survey results offered a generally positive and optimistic outlook for the sector, there were some areas of the market which have been harder hit than others. 1) E nergy-dependent markets: The slump in oil prices has placed additional stress on energydependent provinces and their residents. This has served to magnify the impact on the residential markets of Alberta and downstream regions. 2) H igh-end units: High-end rental units in Class A buildings have also experienced softening rents relative to their accelerated clip in the previous three years. With unemployment compromising Canadian retail and service incomes among many industries, additional slack has been introduced to this upper segment of urban rentals. Further insights on rents, vacancies, turnover and tenant preferences, transaction data, and pricing trends can be found in CBRE’s 2020 Multifamily Report. For access to the report, please reach out to any member of CBRE’s National Apartment Group.

Rental Rates: Year-to-Date

Collection Rates: 12-month Outlook










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Non-profit groups helping tenants find homes in the Yukon By David Gargaro

Finding affordable housing for people with mental health conditions or on social assistance is a challenge during the best of times. Trying to do so during a pandemic makes it even more difficult. Homelessness is a growing problem for people with mental health conditions, and the current situation has made it even more prevalent. The shortage of affordable housing combined with the increase in poverty has led to a rise in homelessness in many municipalities. Government disability support services provide vulnerable people with financial support for housing. However, they also need help with finding a place to live, which can be difficult for people with a mental health condition. One such program is called Landlords Working to End Homelessness (LWEH), which helps to find rental housing for vulnerable people living in Whitehorse. This initiative was founded in 2013 by Blood Ties Four Directions, whose mission it is to “eliminate barriers and create opportunities to have equal access to health & wellness and to live in our community with dignity.” The non-profit group (NPG) rents the unit from the landlord and supports the tenant as required. In exchange, the tenant pays rent to Blood Ties Four Directions. The LWEH program helps vulnerable people to find a safe and affordable place to live. It also helps rental property owners to maintain stable tenancies with people who need housing. Under the program, the NPG leases the unit from the rental property owner, becoming the effective tenant, and assumes all responsibility for paying the rent on time, avoiding and repairing damage to the unit, being a good tenant, and providing notice upon termination of tenancy. The

32 | October 2020

NPG’s client sublets the unit and receives ongoing support from the NPG to make sure they are housed successfully. The LWEH program helps to provide access to rental housing where tenants would not have been considered. Even when a prospective tenant has the funds to pay for rent, the fact that they are on social assistance often limits their housing options. Having an NPG on a tenant’s side to handle communications and conflict can help to make rental property owners more comfortable with providing the rental. Being able to deal with a professional group that will manage communications and solve issues with tenants will encourage more rental property owners to get involved in the program and provide more units for rent. Other NPGs in the Yukon that work with the homeless population and vulnerable groups have joined the LWEH program to help people who come to them for assistance with finding rental housing. The Victoria Faulkner Women’s Centre contacts rental property owners to offer a responsible tenant to fill available units. Staff at the centre promise to keep an eye on the tenant to ensure that they don’t damage the unit. To participate in the LWEH program, tenants must agree to

receive weekly visits, which allows centre staff to stay on top of issues and see how their client is doing with counselling, work, school, and other issues. Staff at the Victoria Faulkner Women’s Centre also handle communication between the property owner and tenant. This includes mediating conflicts, helping to prevent evictions, and handling repairs to damage caused by the tenant. The Fetal Alcohol Spectrum Society Yukon (FASSY) has managed a number of rental units and housed about 20 tenants over the past two years. Although this NPG has faced challenges, primarily from damage to the units, it has found value in the LWEH program. FASSY’s staff is trained to deal with people who have Fetal Alcohol Spectrum Syndrome (FASD), who require support but not constant, around-the-clock care. The NPG takes care of communication with tenants, and checks in with them regularly to make sure that they are paying their rent. They also deal with issues that come up with other tenants, as their clients don’t always have the requisite social skills to handle conflict with other people.

Blood Ties Four Directions leadership considers the LWEH a success, as it has provided clients with a chance to find a home. Some tenants have been in their rental properties for more than three years. Beyond the challenge of getting rental property owners to accept their clients, the NPG has found it difficult to locate affordable properties in Whitehorse. Under the LWEH model, tenants must pay their own rent – there is no rent subsidy from the government. Many rental units available in the Whitehorse market cost more to rent than what tenants are getting in social assistance. The LWEH program has been running for seven years, and has continued to generate interest from other NPGs and rental property owners. Expanding this type of program across the country would help to reduce homelessness among vulnerable people and help rental property owners to fill vacant units with paying tenants.

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e n o s a m o T a c i s s e J RHBtv.ca


The September Throne Speech – what does it mean for rental housing providers? By John Dickie, CFAA President

On Wednesday, September 23, Governor General Julie Payette delivered the Throne Speech, stating the Liberal government’s vision for the remainder of 2020 and into the winter of 2021. This article will provide a short overview and then discuss the issues which have the most impact on rental housing. However, relatively little attention was paid to for-profit rental housing, or indeed to any rental housing. Items which could impact the rental Julie Payette housing sector would mostly do so indirectly, apart from the tax changes, which were not aimed at rental housing, and should have little effect on rental housing. That is discussed at fiscal sustainability, below.

The four foundations The four broad goals stated in the Throne Speech are the following: 1. fighting the pandemic and saving lives. 2. supporting people and businesses through this crisis as long as it lasts, whatever it takes. 3. building back better, creating a stronger, more resilient Canada, by “strengthening the middle class and helping people working hard to join it, and continuing to create jobs and build long-term competitiveness with clean growth”, and 4. standing up for who we are as Canadians, including fighting racism.

Supporting people and businesses through this crisis Supporting people The Government will launch a campaign to create over one million jobs, restoring employment to previous levels. This will be done by using a range of tools, including: • direct investments in the social sector and infrastructure, • immediate training to quickly skill up workers, and • incentives for employers to hire and retain workers, including extending the Canada Emergency Wage Subsidy (CEWS) right through to next summer. The government had earlier announced that, at the end of September, it would bring in the Canada Relief Benefit (CRB) providing $400 per week instead of the $500 provided by the Canada Emergency Relief Benefit (CERB). The Throne Speech repeated that promise. However, in the negotiations in which the Government sought to gain the support of the NDP on the confidence vote on the Throne Speech, the NDP demanded an increase in the

rentalhousingbusiness.ca | 35

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NATIONAL OUTLOOK amount to the $500 per week previously provided. The Government agreed, and that and other changes appear to have gained the NDP’s support. While potentially making workers less easy to hire, that change will help low-income people pay their rents. Supporting businesses This Fall, in addition to extending the wage subsidy program, the Government will take further steps to bridge vulnerable businesses to the other side of the pandemic by: • Expanding the Canada Emergency Business Account (CEBA) to help businesses with fixed costs; • Improving the Business Credit Availability Program; • Introducing further support for industries that have been the hardest hit, including travel and tourism, hospitality, and cultural industries like the performing arts. Fiscal sustainability The Government also said it will identify additional ways to tax extreme wealth inequality, including limiting the stock option deduction for wealthy individuals at large, established corporations, and addressing corporate tax avoidance by digital giants. CFAA is pleased that there was no reference to resurrecting the Interest Deductibility Limitation, proposed early this year, and no specific reference to any review of capital gains taxes. Those are the tax measures that would hit rental housing hard, and CFAA alerted the Government to the negative effects both issues would have on rental housing supply and affordability. Later this Fall, the Government will release an update to Canada’s COVID-19 Economic Response Plan, with costing. That will likely be similar to the usual Fall Economic Statement, even if delivered in these unusual times.

Building back better to create a stronger, more resilient Canada Addressing gaps in our social systems The Government will bring in a new Canadian Disability Benefit modelled after the Guaranteed Income Supplement for seniors. That will help people with disabilities pay their rents. Despite the area being one of provincial jurisdiction, the Government will also support a national drug plan with those provinces which want to Rent arrears and rental losses move forward. That too could help low-income people pay their rents. By correlating the rent collection figures from our member-associations, CFAA The Government will add to the historic National Housing has concluded that about 200,000 tenant Strategy announced in 2017 by increasing investments to households are seriously in arrears of rent rapid housing in the short term, and partnering with not-foracross Canada, while between 10,000 and profits and co-ops in the mid- to long-term. It is note-worthy 20,000 small landlords are short more than that there is no reference to for-profit rental housing, and half of their gross rental income, which no reference to any enhancement of the Canada Housing means they are having to inject a great Benefit, which pays financial support directly to low-income deal of money every month to meet the renters. expenses on their rental units. Both groups There is also no reference to helping the provinces to are in very difficult straits, and both groups assist renters who have fallen into serious rental arrears could be helped at the same time by a situations due to COVID-19. The Government seems program to address tenant rent arrears and oblivious to the degree to which rents diverge across help tenants keep their housing. Canada and across most provinces. At $2,000 per month, CERB and CRB are more than adequate in Edmunston, N.B., or most of Quebec, where two bedroom apartments rent for $500 per month, but woefully inadequate in Toronto or Vancouver where such apartments rent for $1500 per month or more. For the middle class, the Government will also move forward with enhancements to the First-Time Home Buyer Incentive, including in Canada’s largest cities, so families can afford to buy their first home. While a

rentalhousingbusiness.ca | 37

OCTOBER 2020 potential vote getter, such a policy is difficult to bring in without inflating the prices of starter homes. That policy also has the potential to draw off better off renters, to the detriment of rental demand, when rental demand has already shrunk with the decrease in immigration, in non-permanent residents and in students living away from home, when the rental market is also impacted by the increase in supply due to shortterm rentals returning to the long-term rental market. A stronger workforce According to the Throne Speech, the government plans the largest investment in Canadian history in training for workers. That will include: • Supporting Canadians as they build new skills in growing sectors; and • Helping workers receive education and accreditation. Taking action on extreme risks from climate change Climate action will be a cornerstone of the Government’s plan to support and create a million jobs across the country. The Government will immediately bring forward a plan to exceed Canada’s 2030 climate goal. The Government will also legislate Canada’s goal of net-zero emissions by 2050. As part of its plan, the Government will: • Create thousands of jobs retrofitting homes and buildings, cutting energy costs for Canadian families and businesses; • Invest in reducing the impact of climate-related disasters, like floods and wildfires, to make communities safer and more resilient; and • Make zero-emissions vehicles more affordable, while investing in more charging stations across the country. CFAA will promote the inclusion of rental housing in the programs to encourage energy retrofits, and in the expansion of electric vehicle charging stations (to meet climate change targets).

Standing up for who we are as Canadians, including fighting racism Besides protecting both official languages and addressing indigenous issues, the Throne Speech says the Government will redouble its efforts to address systemic racism by: • Going further on economic empowerment for specific communities, and increasing diversity in procurement; and • Building a whole-of-federal-government approach around better collection of disaggregated data to understand differential outcomes for groups subject to discrimination. Apart from the Throne Speech, CFAA has learned that CMHC is working with Statistics Canada to gather and correlate statistics about the treatment of different racial groups within rental housing. Clearly, disadvantaged groups are over represented in rental housing. That suggests that most rental providers do not discriminate on the basis of race. Unfortunately, disadvantaged groups are also over represented in homelessness. They may also be over represented in terminations for non-payment of rent. Rental industry associations will have to be vigilant to ensure people realize that such an over representation is not due to discrimination by rental housing providers, but rather due to systemic issues around incomes and income stability (which are important to address on a society-wide basis). CFAA and our member-associations from coast to coast have long stood for compliance with the Human Rights Codes, and for good income support for low-income people so that they can afford to pay for the housing that they need. We may need to re-double our efforts to stand with low-income and racialized people, and to make sure that the rental housing industry is not side-swiped by the misinterpretation of statistics.

Conclusion The direction indicated by the Throne Speech allows for a sigh of relief within the rental housing industry. CFAA is very pleased that the Federal Government has listened to our warning of the immense damage

38 | October 2020

NATIONAL OUTLOOK that would be caused to the rental housing sector if the Government were to carry through with an Interest Deductibility Limitation, or increases to capital gains taxes. These are issues that CFAA will continue to press upon the Federal Government. While it is true that the existing National Housing Strategy includes provision for $15 billion in loans for private rental construction under the RCFI program (over 10 years), it is disappointing that the Federal Government is apparently unwilling to address to the degree to which rents diverge across Canada and across most provinces, and unwilling to assist with the rental arrears problem faced by 200,000 private market renters, and 10,000 or 20,000 small landlords.

The First-Time Home Buyer Incentive – where is it going?

Rental demand comes from a variety of sources: there are people without the income or down-payment to buy a house, people who choose not to buy a house, people who think they may move soon (so that it does not make sense to buy a house). Renters come from all income groups and all age groups, but many renters are young people establishing separate households for the first time, or recent immigrants, or non-permanent residents staying in Canada for a limited period of time. Or they can be low-income people who are unlikely ever to afford a home apart from a program like Options for Homes. In most of Canada’s cities, an important part of the rental market is young people who expect to move from rental housing to their “first home”. In many centres across Canada, those moves are happening as they have for fifty years. However, in major centres, house prices are so high that many young people are “stuck” renting their homes. They may have the income to buy a house, but they lack the down-payment. In 2019, the Federal Government introduced a Shared Equity Mortgage (SEM) to help with that problem. In the Throne Speech presented on September 23, this year, the Government revealed its intention to enhance the SEM to help first time home buyers, especially in Canada’s largest cities. So that rental providers know the programs enticing some of their customers out of rental housing, here is CMHC’s description of the current First-Time Home Buyer Incentive, and some additional information. The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens. The Incentive is a shared-equity mortgage with the Government of Canada. It offers: • 5% or 10% for a first-time buyer’s purchase of a newly constructed home • 5% for a first-time buyer’s purchase of a resale (existing) home • 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home. Under the Incentive, the Government has a shared investment in the home. The Government shares in both the upside and downside of the property value. By using the Incentive, the borrower does not have to save as much of a down payment to be approved for their mortgage. The effect of the larger down payment is a smaller mortgage, and lower monthly costs.

WANT TO STAY UP TO DATE WITH NATIONAL OUTLOOK? Sign-up for CFAA’s National Outlook e-newsletter to receive up-to-date news on what is happening across Canada, as well as industry insights and insider information on CFAA happenings. Email communication@cfaa-fcapi.org to start receiving CFAA’s e-Newsletter today!

rentalhousingbusiness.ca | 39

rentalhousingbusiness.ca | |39 39 rentalhousingbusiness.ca

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OCTOBER 2020 The homebuyer will have to repay the Incentive based on the property’s fair market value at the time of repayment. If a homebuyer received a 5% Incentive, they would repay 5% of the home’s value at repayment. If a homebuyer received a 10% Incentive, they would repay 10% of the home’s value at repayment. The homebuyer must repay the Incentive after 25 years, or when the property is sold, whichever comes first. The homebuyer can also repay the Incentive in full any time before, without a pre-payment penalty. A person is considered a first-time homebuyer if: • they have never purchased a home before, • they did not occupy a home that they or their current spouse or common-law partner owned in the last 4 calendar years, OR • they have recently experienced the breakdown of a marriage or common-law partnership. A few additional criteria to qualify for the First-Time Home Buyer Incentive are these: • the total annual qualifying household income does not exceed $120,000 • the total borrowing is no more than 4 times the qualifying household income (i.e. a maximum of $480,000). The borrowing limit of $480,000 is a problem in Toronto and Vancouver, because that amount doesn’t buy much in those markets. Without providing any details, the Throne Speech suggests that limit will be raised in Toronto and Vancouver. However, it is unclear how far into the suburbs the increase will apply, whether the household income to qualify will also have to be higher, and whether the enhancements will apply in centres other than Toronto and Vancouver. Those will be important issues in determining what impacts an enhanced Home Buyer Incentive will have on rental demand. By the time you read this, more information is likely to be available from CMHC’s website, and from CFAA at www.cfaa-fcapi.org.

40 | October 2020

NATIONAL OUTLOOK Upcoming CFAA webinars – key topics for rental housing providers By Andrea Wong, Client Service Representative, CFAA Due to COVID-19, CFAA cancelled Rental Housing Conference 2020. As a partial replacement, we conducted three webinars in May and June. In October and November, CFAA plans to host 6 webinars, to draw people together, share information, and to replace some of the funding lost due to the cancellation of the in-person conference. Yardi, Home Depot, Wyse Meter Solutions, HD Supply, CTI Canadian Tenant Inspection Services, Building Stack and other industry suppliers are being very supportive of the webinar program. CFAA thanks them for their support. Webinar topic Benjamin Tal’s Fall Economic Update Executive Roundtable

Scheduled date Tues, Oct 20 Tues, Oct 27

Operations Roundtable What you need to know about CMHC’s new mortgage insurance rules Technology Updates for COVID-19 and beyond Future proofing your business with effective energy management strategies

Tues, Nov 3 Tues, Nov 10 Wed, Nov 18 Tues, Nov 24

In all cases, the webinar is to run for one hour and start at the following time: 4:00 pm Atlantic, 3:00 pm Eastern, 2:00 pm Central, 1:00 pm Mountain and 12 noon Pacific. Recordings will be available for those who miss the live sessions. The dates above are tentative. For up-to-date information, and to register for the webinars, please visit www.cfaa-fcapi.org. If you want to receive more information directly from CFAA, please ensure you are signed up to receive CFAA’s e-Newsletter, by e-mailing admin@cfaa-fcapi.org. We look forward to seeing you at CFAA’s webinars in the Fall of 2020!

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Visit www.cfaa-fcapi.org for more information.

rentalhousingbusiness.ca | 41

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

Hot Topics: WRAMA reports on the Waterloo rental market, COVID-19 protocols for guests and unit turns, and tax consideration under COVID-19. pg. 45 EOLO addresses the Ontario rent freeze for 2021, other changes to the RTA, and City of Ottawa support for tenants and planning for solid waste. pg. 49 HDAA discusses the 2021 Ontario rent freeze in the context of the history of rent control, and its impact on rental housing supply. pg. 53 LPMA reports on protocols to manage COVID-19 risks, including face masks, dealing with deliveries, maintenance calls, and showing units. pg. 57

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PRESIDENT’S MESSAGE The Annual WRAMA Expert Panel & Hot Topics Event took place on September 9, 2020. Sincere thanks to The Home Depot for sponsoring the event and Robert Spicer, National Sales Manager Home Depot Pro, for being our keynote speaker. Our expert panel did not disappoint, with COVID-19 impact being the common theme. Thanks to Ho Tek, DOMUS Student Housing, Lisa Nadon, Small Matter Paralegal, and James Craig, CBRE, for providing insights on the local residential market in and around Waterloo Region and Guelph.

- Andrew Macallum, President

Expert Panel Market Update - Waterloo Region By James Craig, CBRE

Immigration was a major driving force with respect to the low vacancy rates and the rise in rental rates over the past year. This was before the COVID-19 pandemic hit and will limit the number of net new immigration to Canada. Interprovincial migration will continue to help drive demand for rental product. Housing affordability and limited housing units available to purchase have pushed more people to continue to rent. The low supply of rental units across the country and locally continues to be imbalanced with demand. The result is low availability, shorter lease up, and higher rents being achieved. Construction continues to be hot in many areas in many stages of development. Typical developers have long been in building multi-family; however, many REITs, equity funds, and other multi-family owners are now looking at their own holdings for additional density and new building opportunities. At the end of 2019, there were over 70,000 rental units under construction in Canada. This is significant as it represents almost 40 per cent of the total multiple construction (condominium and rental). This is the first time this has occurred since the early 1990s. Even through the pandemic, construction remains strong. With respect to multi-family values, prices continue to rise. Interest rates have fallen since the start of the pandemic, which has in turn pushed down cap rates and increased prices per unit. Many investors had hoped that the opposite was true. With limited product available to purchase, pricing will remain strong as underlying fundamentals remain strong.

Expert Panel pandemic impact Rental payments: The April 2020 rent cycle was especially nerve wracking, with business shutdowns impacting income and ability to meet financial obligations. Consistent messaging to members included communicating with tenants to help ensure expectations were clear for all parties. Upgrading maintenance requirements: Completing audits on building maintenance became the priority. Types of cleaning supplies used in common areas, scheduling of regular cleaning, ensuring maintenance staff was properly outfitted with appropriate PPE, and being hypervigilant of sanitizing handrails and door knobs were just a handful of actions necessary to help keep people safe. Mortgage & utility deferrals: Banks began advertising mortgage deferrals to Canadians who might have trouble making mortgage payments. There was some confusion about how this applied to rental properties big and small, and the long-term impact of taking advantage of these programs.

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Residential rental advocates have asked governments for similar rent relief programs to those offered to commercial landlords, although to date nothing has materialized. Municipalities followed suit by providing no-interest penalties on missed utility payments. Guests entering buildings: Significant media attention was focused on long-term care homes across the country, with older Canadians especially vulnerable to COVID-19. Owners with tenants who would fall under the umbrella of being susceptible to the illness, yet were not operating as long-term care homes, found themselves in a predicament. Navigating guest entry into buildings, tenant movement through a building, and providing a sanitary environment were among the challenges voiced by WRAMA members. Unit turns: Renovating and updating vacant units fell victim to the essential workers lists that were released and updated through the spring. With each announcement, questions ranging from floor refinishing to lawn care were raised, with fear of being ticketed by local by-law officers. Student rentals, international students, and school programming: Waterloo Region is home to Conestoga College, Wilfred Laurier University, and University of Waterloo, with campuses spread throughout each of Cambridge, Kitchener, and Waterloo. Owners and management companies were confronted with an environment that saw students leaving town due to school closures and class cancellations, halting of inquiries about leasing units in September and, in some cases, breaching of lease obligations. International students found themselves having to decide on whether to stay in Canada or leave for their home country. Post-secondary institutions began announcing a move to online delivery in late June, with many in-person classes cancelled for September.

20 planning ideas for the real estate and construction industry during COVID-19 By George E. Dube, CPA, CA, Tax Partner, Real Estate and Construction Industry, BDO Canada, and Chris Witzel, CPA, CA, Senior Manager, BDO Canada

For real estate and construction businesses, whether concerned with cash flow now or planning for recovery and future opportunities, tax planning ideas are well worth your time. In April, we held a series of real estate and construction webinars focused on preparing and responding to COVID-19: • Real Estate & Construction Industry: Cash Flow and Tax Strategies amid COVID-19 – Part One • Real Estate & Construction Industry: Tax, Insurance, Contractual and Digital Considerations amid COVID-19 – Part Two Now, though, we want to start looking at what recovery may look like, and how to prepare for the future. For many of us, there are challenges as cash flow is frequently restricted, but an opportunity may be here to save considerable taxes in the future. Addressing these challenges may effectively require an investment in funds – paying something now for a larger return later on. We have an unfortunate situation upon us now, but it may be prudent to implement planning today for the future. As perspective, if you believe that governments will be increasing taxes to help pay for the COVID-19 stimulus, you will be increasingly concerned about your after-tax income. For example, is it possible that the capital gains inclusion rate could increase, the capital gains exemption be eliminated, or tax rates increased? All of this means we will want to implement tax plans that help our businesses, families and investments recover.

What can real estate and construction businesses discuss with their BDO advisor? Now is the time to talk with your BDO advisor to review specific tax planning strategies. These discussions may revolve around a variety of strategies, including: 1. Recalculating instalments, and potentially reducing them, to save cash flow

46 | October 2020

2. Potentially redirecting existing instalments to GST/HST or payroll accounts 3. Carryback of losses and/or trigger capital losses to recover previously paid taxes – watch for various stop-loss and superficial loss rules, and implications to your capital dividend account, implications to refundable taxes over the relevant time period 4. Prescribing rate loans for income splitting to decrease current and future family tax burden 5. Unlocking trapped losses in a corporate group to protect existing and future profits 6. Considering interest deductibility opportunities while restructuring assets and lending arrangements 7. Caution regarding when personally owned real estate (for example) is refinanced if looking to transfer (may limit tax deferral opportunities) 8. Considering transfers of real estate inventory while values are lower 9. Considering transfers of real estate if land transfer tax is applicable while values are lower 10. Considering selling assets now if you were otherwise likely to sell shortly to take advantage of the 50 per cent inclusion rate, use personal tax brackets or offset losses 11. “Freezing” or “refreezing/thawing” – locking in the value of your business at a lower value may ultimately save approximately 25 per cent of value of decrease and future appreciation of business, liquid investments, real estate, etc. 12. “Crystallizing” – locking in the capital gains exemptions

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13. Tax planning strategies to take out larger sums of funds from a corporate group in a tax effective manner are available 14. Looking at a family trust in combination with different strategies from tax, legal, succession, estate planning, and financing perspectives 15. Complementing asset protection planning from your legal team with tax reorganization to help prepare for the next recession and protect against normal business risks 16. Considering tax effective acquisition strategies for potential buying opportunities 17. Considering changing your remuneration model to what may be less tax effective (regular wages to owners/family) to potentially qualify for future programs for a potential future crisis 18. Tax implications of losing investment deposits on bankrupt condo or other developments that cannot come to fruition – timing of triggering losses 19. Tax implications of having to foreclose on second mortgage for your investments, differences given property values, etc. 20. Allowable business investment loss (ABIL) that can be deducted against different sources of income versus capital loss, which is generally restricted to application against capital gains More complex strategies and those unique to your business should be discussed with your BDO team. Many of the ideas listed above may be implemented more efficiently if done at the same time.

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CHAIR’S MESSAGE Difficult times continue, with a new curve being thrown at Ontario residential landlords in the form of a rent freeze for 2021. Misguided as that decision is, it could have been worse. Rental housing providers are resilient, and will cope with that curve as we have coped with the other impacts of COVID-19. This issue explains the details of the rent freeze, other new rules that are neutral or helpful, and several developments at the City of Ottawa. Like all of you, we at EOLO would love to return to normal. Just as you are doing your best for tenants and for rental owners and managers, we are striving to do our best to help rental owners, managers, and suppliers. Just as with your work, in many cases, EOLO’s work also involves making tenants’ lives better. We are all in this together.

- John Dickie, Chair

Rent freeze for 2021 The Ford government has now enacted its rent freeze for 2021. For 2021 (and only 2021), the guideline has been changed to zero. That limit on rent increases has been applied not only to rental units normally subject to the guideline, but also to rental units that were exempt from the guideline because of being new construction, first occupied after November 15, 2018. Pursuant to the Residential Tenancies Act, the 2021 guideline was announced on August 31 at 1.5 per cent, in accordance with the formula that makes the guideline equal to the average increase in the Consumer Price Index for Ontario, but that was rolled back by legislation announced at that time, and enacted on October 1. Rental housing providers are still allowed to take above-guideline rent increases for capital expenditures. We can also still set new rents at market on turnover. Unless there is further legislation or they take an above-guideline increase during 2021, rental housing providers will next be able to give notices of rent increase effective January 1, 2022. In other words, you may move up your increase date in the year. Those notices would need to be given in September 2021. That will be an interesting month, since it will be 10 months before the next Ontario provincial election, unless Premier Ford calls an early election, as has been done in several other provinces.

Other LTB and RTA updates The Landlord and Tenant Board is gradually reopening, with most hearings being held by video conference or telephone conference. The LTB has

an increased complement of adjudicators to try to reduce and then clear its backlog. As well, two sets of rules have changed as a result of Bill 184, which was enacted in late July 2020. Obligations about payment plans Until further notice, landlords need to offer payment plans to tenants for rent arrears that accumulated under COVID-19. In considering whether to grant an eviction, the LTB is required to have regard to whether the landlord has attempted to negotiate a payment plan for arrears. It is implicit that the landlord’s offer of a payment plan needs to be reasonable, but it is not yet clear what will be considered to be a reasonable offer. In British Columbia, for example, the government has decided that arrears due to COVID-19 can be repaid over a time period until July 2021. Provided the tenant pays their ongoing rent in full and on time, we can hope that timeline will also be considered to be reasonable in Ontario in cases where the tenant lost all their income and owes much of the rent from April to September. For tenants in slightly better situations, a shorter time frame to catch up on the arrears may be seen to be reasonable. We will know more once the LTB has heard a number of cases. In particular, tenants need to pay the amount of their current rent each month. If they cannot do that, then landlords may want to cut deals to receive some of the arrears of rent and write off some rent, but see the tenants move promptly (to more affordable accommodation), so that the landlord can rent to a new tenant who can pay the rent. Landlords will need to pay attention to the market rent for their units, since some weakness has already become apparent at the higher end of the rental market.

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No more tenant ambushes at the LTB At eviction hearings before August 2020, tenants had the right to introduce evidence of a landlord’s failure to repair a rental unit without prior notice to the landlord. Many landlords sought to address that risk by inspecting units shortly before the eviction hearing and by being ready with the maintenance file for the rental unit. But that was often wasted time and effort because it turned out not to be needed. Alternately, at such a hearing, a landlord could request an adjournment, but that resulted in more delay, when there was already far too much delay in the dispute resolution process, even before the new backlog introduced by the COVID-19 shutdown. Thanks to Bill 184, a tenant now needs to disclose any repair claims at least five days before the hearing, using a form made available by the Landlord and Tenant Board. That should reduce the work that landlords need to do to prepare for eviction hearings for non-payment of rent.

City of Ottawa developments City help for tenants with rent arrears Tenants with rent arrears may be able to get the financial support the City of Ottawa is rolling out to help people who “fall through the cracks� in the new EI and CRB programs. To see if they are eligible for this new benefit, anyone on Ontario Works or Ontario Disability Support Plan should call their caseworker. Other people in serious financial need in the City of Ottawa should call 3-1-1, select language, then press 4 for Social Services, and 3 to speak with an agent. To receive assistance, a tenant would need to have a low income, relatively few assets (i.e., little money in the bank and few savings they can access), and be paying less than 90 per cent of their income on rent. Housing Blitz Together with the Alliance to End Homelessness, the City of Ottawa is running a Housing Blitz. The goal is to house 100 single people and female-led families who are currently homeless but ready to maintain their housing. At the end of September, the Housing Blitz was over half-way to its goal. Landlords with units available now, or for November or December, are invited to email Housing-Logement@Ottawa.ca, or to go to ottawahousingblitz.ca. The City or the Alliance should contact you within two business days to follow up. There are two program streams. One is for single people, which comes with social service supports, a $600 subsidy limit (which would allow a rent of up to about $900), and access to the Landlord Damage Fund. The other stream is for single women and female-led families, with a higher subsidy, but not access to the Landlord Damage Fund. For families to pay only 30 per cent of their income on rent, the units would need to have rents of not more than $1,178 for a studio or a one-bedroom apartment, $1,415 for a two-bedroom apartment, or $1,559 for a three-bedroom apartment. However, units with somewhat higher rents may also be of use, since most people would prefer to pay 40 or 50 per cent of their income on their rent rather than be homeless. Solid waste issues The City is developing a 30 year Solid Waste Master Plan. The main trigger for that work is the realization that the Trail Road landfill site has only 10 years life left at current rates of use. Siting a new landfill would be extremely expensive and fraught with difficulties, as few landowners want a landfill located next to their property.

50 | October 2020

EOLO has been participating in the stakeholder consultation about the Solid Waste Master Plan. We are making sure that the costs that users will incur under various programs are considered, along with the costs to the City and the impacts on the environment. Other important factors are the acceptability of new programs or rules, and the inconvenience that new programs or requirements will impose on users.

thank our sponsors: Coinamatic, Giant Wholesale, The Home Depot, and Wyse Meter Solutions. We received positive feedback from the sponsors and the many landlords in attendance. Networking Event - October 14, 2020 EOLO held its Networking Event on October 14, 2020. EOLO would like to thank our sponsors:

Phase I of the consultation has concluded. The report on the goals and evaluation criteria will go to the Environment Committee and City Council early in 2021.

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At the same time, and on a separate track, the City is working on a program of organic recycling for apartment buildings. In effect, it is a Green Bin program for apartments. EOLO is acutely aware of the concerns of rental housing providers about the difficulties of organic recycling in apartment buildings. However, considering the political, environmental, and cost pressures that are driving the push for more organic recycling, rental housing providers need to be ready to make some changes. The City Solid Waste staff know how difficult it is to get tenants to do organic recycling (in buildings without tri-sorters), especially when tenants can throw residual garbage down a garbage chute, whereas they need to carry organic recycling and other recycling to a garbage room at the base of the building. Various solutions to that issue are under consideration.


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EOLO Fall 2020 virtual events Because COVID-19 forced EOLO to cancel our inperson Fall events for 2020, we replicated them in a virtual format through separate Education and Networking Events. Education Event - September 24, 2020 EOLO held its first virtual event, the Education Event, on September 24, 2020. EOLO would like to



BECOME AN EOLO MEMBER NOW! EOLO invites Ottawa area landlords to join the organization. Have your interests and concerns heard, and benefit from EOLO’s support. As an EOLO member, you will be able to: • Receive

prompt emails of relevant City rule changes

• Attend

two networking receptions a year

• Attend

two free education events a year

Receive all 6 annual issues of RHB Magazine with current developments, City and provincial funding programs, and landlord-tenant laws.

To apply for membership, go to www.eolo.ca, download the membership application form and send it to us at the contact info on that website.

rentalhousingbusiness.ca | 51

PRESIDENT’S MESSAGE We are now in the fall season and are bracing for what will come in the next few months as the weather continues to cool. Schools have started reopening and we have now been in stage 3 for some time. Unfortunately, we are starting to see COVID-19 numbers rise once again and are now bracing for a second wave. Whether this will come with another closure similar to what we had seen in March is to be seen, but we hope that the government is able to think of a plan that would have less of an impact on the economy. The rental apartment industry continues to do its best in regard to cleaning, safety, and following government recommendations and we can hopefully weather whatever storm comes our way next. - Arun Pathak, President

Rent freeze Several weeks ago, the Province of Ontario made an announcement that it planned to implement a rent freeze in 2021, essentially freezing all rental amounts at December 2020 levels. The government advised that legislation would be following in the weeks to come after holding consultations with relevant parties. After limited consultation, the government

introduced Bill 204, the Helping Tenants and Small Businesses Act, and provided information on how it would be applied and which units would fall under this new legislation, which was enacted on October 1. The intention is to freeze rent in 2021 for most rent-controlled and non-rent-controlled residential units with the hopes of providing Ontario’s tenants with

rentalhousingbusiness.ca | 53

financial relief as the province continues with its economic recovery. The new Act also extends the temporary ban on evictions for commercial tenancies, continues to protect small business and help them get back on their feet, creates more jobs, and helps rebuild the economy. The lack of a rent increase in 2021 is a concern, as many landlords, particularly smaller landlords, are already struggling with increasing maintenance and utility costs, as well as issues from the eviction ban. Introducing new legislation that creates another hurdle will be an added struggle some landlords may not recover from. The new legislation does not apply to previously applied for, agreed upon or approved AGIs but does apply to units first occupied after November 15, 2018, units which were previously exempt from having to adhere to the rental increase guidelines. This poses quite a concern not only due to the lack of a rent increase but in regard to the increase of rent control we are seeing. Rent control in Ontario has had a long and varied history and has been proving less favourable for landlords over time. Some form of rent control has been in place in Ontario for many decades with varying degrees of severity. It was first introduced in 1944 under the National Housing Act but was repealed in under a decade after lobbying efforts. More modern rent control began in 1975 with the enactment of the Residential Premises Rent Review Act; it was further tightened in 1985 by the Liberal government and then in 1992 by the NDP government with the Rent Control Act. Under this system, the amount of rent charged was regulated and controlled by the government and rents had to be registered. A landlord was not allowed to raise rents on unit turnover if it was higher than the registered amount. This led to many landlords being unable to afford maintenance and renovations in their buildings, causing some to fall into disrepair. Then, in 1997, the Conservative government enacted the Tenant Protection Act which repealed the Rent Control Act. Landlords were once again allowed to raise rents on unit turnover and rents did not have to be registered. However, there was a limit on rent increases for existing tenants, except on units built or first occupied after 1991. This form of rent control extended into the Residential Tenancies Act enacted in 2006.

54 | October 2020

Until 2017, rent control only applied to units that were first built or occupied before November 1, 1991, but in April 2017 this rent control exemption was rolled back and rent control applied to all units. Rental increases could also be no higher than the rate of inflation and were capped at 2.5% if inflation was higher than 2.5%. Doug Ford’s government, however, enacted legislation in 2018 so that new construction was not subject to rent control, meaning all units first built or occupied after November 15, 2018 would not fall under rent control. This was done in the hopes of increasing supply by incentivizing investors and encouraging developers to build. We are now in a climate where the only units that do not have rent control are thus those built after November 15, 2018. Now for 2021 this has been this taken away as well, and there is fear that this will be followed by even more rent control in the future. We know that there is a shortage of rental housing in Ontario. The number of new rental apartment buildings being built has decreased dramatically since the 1970s and there is

little in the way of incentives for builders and investors to build more. More legislation is being enacted that makes it less appealing for investors and landlords to enter the market or create more rental housing supply. It seems counterproductive for the government to be doing this when it should instead be looking at ways to incentivize the building of more rental buildings. Unless the government decides to step up and provide more subsidized housing, we will continue to see a lack of supply in the market and we may even see a reduction in supply, as housing providers start to feel less supported by the government and decide to leave the market entirely.

Upcoming Events October 7 – Bill 184 Webinar

In this free member-only webinar, Mark Melchers from Cohen Highley will be discussing the new legislative changes arising from the passing of Bill 184. Join us to learn all you need to know about the new legislation and come prepared with your questions.

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: 905-616-2058 Web: www.hamiltonapartmentassociation.ca

rentalhousingbusiness.ca | 55

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Vol. 13 No. 4 October 2020


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The official publication of:

RHB Industry

Report 2020 A comprehensive look at the status of Canada’s rental housing industry

Economic and financial analysis of the rental housing industry

PRESIDENT’S MESSAGE Government’s rent freeze legislation heightens landlords’ concerns As schools open and children return to some sense of normalcy, trying times continue with the fear of a second wave of COVID-19. Infection rates have been slowly increasing as larger groups ignore physical distancing and mask guidelines. Landlords have further cause for concern, given the provincial government’s intention to freeze guideline rent increases for 2021. Announcement of the guideline was already delayed this year due to the pandemic; the increase is usually publicized in the spring for the following year. The proposed freeze will add to landlords’ burdens since many have deferred issuing rent increases out of concern for their tenants. LPMA continues to update members with bulletins from our legal representatives and government news. It’s important to stay current on industry issues. Visit www.lpma.ca and join our closed Facebook group. Let’s remain positive, and continue to be healthy and safe.

- Shirley Criger, LPMA President




The key to securing compliance with tenants centres on landlords’ ability to enforce a protocol, Hoffer says. It’s much easier when a municipal government or health unit includes the common areas of apartment buildings in a bylaw that requires the use of masks in indoor public buildings. Without that, landlords can’t make KS REQUIR E AS wearing masks part of the rules in the Rules and Regulations section of their lease and the practice can’t be enforced at the Landlord and O Tenant Board or by the MiddlesexRY E O UR SAF London Health Unit. “Typically, unless there is a bylaw in place, our advice is that landlords simply recommend the wearing of a mask,” he says. Norquay has posted signs requiring that tenants wear masks in the common areas of its buildings. “Although apartment buildings are not included in F

At the beginning of the pandemic, landlords created protocols and designated staff members to communicate them to residents. Now that fall is here and infection rates are increasing, landlords are refining those protocols to further protect their tenants — no easy task in multi-residential buildings. London lawyer Joe Hoffer says larger landlords, in particular, are highly attuned to risk management as a result of the duty of care they owe to their tenants and visitors. Many landlords adapted the protocols provided early on by the provincial government and health units, as well as the information offered by landlord associations and legal counsel. “Most landlords are driven by what the best practices are generally as recommended either by the province or public health,” Hoffer says. “They have a heightened awareness of the need to follow protocols and then figure out what the best practices are and implement them.” Lisa Smith, senior property manager with Norquay Property Management, says the pandemic has ignited the property management industry unlike any other emergency. The industry has always been able to respond to crises, but COVID-19 “took us all to a whole different level,” she notes. “The protocols changed daily at the beginning, Lisa Smith

which weighed heavily on all staff, from CEOs to building cleaners. This pandemic has brought all staff together more than ever before to get the job done, and to keep themselves and their tenants safe,” Smith says. Smith points to Norquay’s COVID-19 cleaning protocols, which focus on touchpoints. The building staff have increased their cleaning routine from daily to hourly for all touchpoints in the lobby, elevators, mail room, and laundry room. Norquay’s cleaning supply contractor suggested purchasing a sanitizing fogger as an additional line of defence. The fogger is operated by one worker in all buildings and is used daily in the main lobby, mail rooms, and elevators, and weekly in hallways and stairwells.



rentalhousingbusiness.ca | 57

the mask bylaw set out by the City of London, we felt it was an added safety precaution for all tenants and their guests, and delivery personnel,” Smith says.

DELIVERY PERSONNEL Hoffer says some landlords stipulate that tenants go downstairs to collect their packages, while others require delivery personnel to go straight to recipients’ apartments. He believes the first option is safer because fewer people are exposed to the delivery person in the elevator or on the stairs. Residents with mobility issues would have to be exempt from that rule and have packages delivered to their apartment. Food delivery personnel are at higher risk because they come into contact with more people in restaurants, and then in homes and apartment buildings. “That’s why, if they’re met at the front door, there is in my view substantially less risk,” Hoffer says. At the beginning of the pandemic, Norquay required residents to collect their packages in the lobby. However, the company is now allowing delivery personnel to take parcels to apartments using the elevators or stairs. “Unless a large second wave occurs, we don’t see changing it back,” Smith says.

MAINTENANCE CALLS Landlords are taking measures to keep tenants, employees, and contractors safe while maintenance duties are being performed. For example, Hoffer advises landlords to ask tenants to sanitize the area that requires maintenance in advance and then vacate the unit. The workers, clad in masks and face shields, then perform their duties and sanitize the area they worked on prior to leaving. Theresa Lapensée, operations manager of London residential rentals for Sifton Properties, says tenants receive an email in advance informing them of what they must agree to and what the maintenance call will entail. Workers wear masks and foot covers when they enter a suite and then dispose of the foot covers directly after. “People are very appreciative and co-operative,” she says. Even small landlords who lack a software program that enables them to send a similar email can send a text message or call tenants. “It’s a time of pressure, but I do think there are a lot of small things that we can do as landlords to reassure our residents. We’ve actually found it’s been the smallest things that we’ve been doing that people are most impressed with,” Lapensée says. Dave Strano, president of Strano Property Management, a third-party manager of student and single-family properties, uses email mainly to communicate with owners and tenants. He says communication is key. “If we’re not communicating with the tenants or the owners, what we’re doing would fall apart. We’re constantly getting better at that,” he says. Introducing and refining protocols is challenging for landlords when there are constant maintenance issues. “We have new protocols and we can only get so much done in a day compared to what we were able to get done in the past,” Strano says. “We try to implement new protocols to make sure our staff is safe, but some people are more comfortable with them than others. We try our best to toe that line.”

SHOWING UNITS The protocols for showing units to prospective tenants are also changing. Strano says his company offered walk-throughs of vacant units and virtual tours of occupied units at the beginning of the pandemic. “We would ask our tenants who were currently there to help us out with videos or we’d come in for a video. Everyone has been understanding of the circumstances and helped out in as best a way as they could.” However, the company is now allowing prospective tenants to enter occupied units wearing masks as long as the current tenants agree to it. Rental applications are completed online and the property

58 | October 2020

similar. Instead of inspecting units 45 days before tenants vacate, it now waits until units are vacant and sanitized. “It slows the process down a little, but our contractors have been really great with understanding that we won’t have orders in 45 days before the tenant vacates,” Smith says.


The Berkshire Club office in London is closed to the public, but staff provide phone and virtual support.

owners approve the prospective tenants in advance to eliminate any guesswork. “If they like it, they take it,” Strano says of prospective tenants. “We only get that special circumstance once or twice on a property so we want to make sure it’s worth it. We wouldn’t just bring anyone who’s interested.” Smith says Norquay shows only vacant units to prospective tenants, who must wear masks, and touchpoints are cleaned between showings. Rental applications are completed using physical distancing protocols and any other documents are sent by email to Norquay’s office. “We have been really good with renting very quickly after units are vacant and usually losing only a month’s rent,” she says. Norquay’s approach to outgoing inspections is

Tenants understand that no one has all the answers because the virus is still new, Lapensée says. A recent notice to residents stated that the company is continuing to learn and change the way it operates during the pandemic. Sifton also explains why it’s changing a protocol that it instituted a short time before. “When you give people that reasoning, it’s hard for them to argue,” Lapensée says. As the rates of infection increase during the fall and winter, landlords will continue to refine their protocols. Hoffer says larger landlords recognize that ‘use at own risk’ signs have no legal effect and now require that tenants sign waivers and schedule appointments to use amenities. They also keep records of amenity use and use them to trace contacts when tenants become ill. “It seems that we keep learning more and more about maintaining distance, wearing masks, and those sorts of things. As those recommendations continue, landlords will continue refining what they’re already doing,” Hoffer says.



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rentalhousingbusiness.ca | 59

Final Take Away

Brought to you by Yardi Canada Ltd

Unlock your potential with property management software Peter Altobelli, Vice President, Yardi Canada LTD.

Not every property management business has a big budget for technology and innovation. At a time where we find ourselves in a state of ambiguity, grappling with the challenges of social distancing and health risks, there are affordable and easy to implement technologies that can boost your marketing and streamline your operations. This perspective applies to small businesses as well as large operations that need to reduce costs without sacrificing efficiency and productivity. Attract qualified prospects The beauty of an ILS is it’s easy to set up. The challenge is keeping them current while standing out in a sea of listings. Get a competitive edge with corporate and property websites. The company that offers you property management software should be able to help you create websites and syndicate your ILS listings across all major sites, at no additional cost. This is a great way to guarantee that your online presence is professional, optimized for mobile devices, and easy to update when needed. Virtual and online tours are great ways to let prospects view your community without having to meet them in person. Both methods should be available on your website because they also allow prospects to explore your vacant units within their schedules and at their own pace. After you have modified your online marketing tools, you will see an increase in applications. Here’s where automated resident screening is valuable. It should allow you to check credit and criminal histories in minutes. The faster you can sign up qualified prospects, the better. If everything looks good, property management software makes it easy to send lease documents electronically and obtain e-signatures. This eliminates paper and ensures physical distancing while storing your leases in the cloud for safekeeping. Protect your residents and stay contact-free Keep your residents safe and supported during a pandemic through automated rent deferments. By streamlining this otherwise cumbersome task, you can confidently “set and forget” how much is to be

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deferred and for how long. The original payments will automatically recur at the end of the forgiveness/ deferment period, and residents will be able to log into their online portals to pay. In fact, the ability to automate rent collection may end up being your biggest timesaver of all. Having residents set up recurring auto-payments will also help them never miss a payment and reduce the risk of late fees. No more trips to the banks. No more chasing down residents. The 2019 Informa Multi-Res Tenant survey shows 69% of residents prefer to pay their rent electronically. Empower your staff Online portals aren’t just for residents. Your staff will use them to communicate with residents via text and email while still following CASL requirements. Your team can receive maintenance requests and seamlessly make arrangements with the appropriate vendor. And, of course, vendor communications are just as easy to manage. You and your residents will be able to track the progress of the job through your portals. Many property managers dread the end of the month. Reporting can be time-consuming work that’s also prone to human error. With the right software, accurate report packets can be generated in seconds. Do you manage properties for more than one owner? Each packet is easy to customize based on the owner’s level of investment and what they want to see. All the data they need is at your fingertips. Engage with technology now This is an interesting time for small businesses that have had to find innovative ways to adapt to the changing working environment. If you’ve never used property management software — or yours doesn’t offer the features mentioned in this article — it might be time for a change. Our advice: Look for a free demo of the software before making any final decisions. Boldly explore the option of employing technologies to protect your residents, attract higher quality prospects, and empower your on-site staff.

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“ You can’t go wrong with Yardi Breeze. It will make your life so much easier! ” – Joni Butterfield GF Property Management Group

Property management software for smaller portfolios See for yourself at YardiBreeze.ca | 888.569.2734 Multifamily | Commercial | Mixed Portfolios




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