Vol. 13 No. 6 January 2021
Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives
The official publication of:
One year later - Conversations about COVID-19 and the rental housing industry
Where real estate is taking us: Postpandemic business strategies
Imposing a moratorium on evictions is poor public policy
Follow these tips to manage your properties during the new normal
The eviction ban takes away an important tool from rental property owners
Personal perspective of how the pandemic has affected rental property owners
Associations’ view of the pandemic’s impact on the rental housing industry Discussions on what is happening with rental property owners across Canada
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EDITOR’S NOTES Keep going We’ve all been through a tough year, and even though it’s 2021, last year’s problems have not magically gone away. Things will continue to be challenging before they get better. We’re all going through a pandemic, but we’re also dealing with our own private challenges. What can you do? Perhaps we should follow the advice of Winston Churchill, who said, “If you’re going through hell, keep going.” One of my favourite authors, Austin Kleon, also wrote a book called Keep Going. It’s one of the best things we can do, and sometimes it’s the only thing we can do that is under our control. The February issue of RHB Magazine features a conversation with a rental property owner on his views of what’s happening in the industry one year into the pandemic. We discussed his views on the government’s actions to help people and businesses deal with the financial challenges, among other topics. We also spoke with legal and financial experts on related issues. Our second article involved a group discussion with several landlord association leaders on the pandemic’s impact on the rental housing industry. We discussed a look back at the past year, the impact of government programs, what they would like to see from the governments to help property owners, and what they expect for the future. We also published an article about the Ontario moratorium on evictions, and how it is poor public policy. Don’t forget to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. Check out Suite Count for a snapshot of the Vancouver Legacy Apartment Portfolio, and Final Take-Away for post-pandemic business strategies. Of course, we always enjoy hearing from our readers, and we want to support two-way communication. If you have any comments or questions, send them to david@ rentalhousingbusiness.ca. I look forward to hearing from you.
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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 | January 2021
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VOL.13 NO.6 2021
Imposing a moratorium on evictions is poor public policy The Ontario government’s eviction ban hurts property owners and responsible tenants.
RHB’s forum for rental housing associations to share news, events and industry information
One year later - Conversations about COVID-19 and the rental housing industry How has one rental property owner fared during the pandemic, and how does he feel about the government’s actions?
Hot Topics: HDAA reports on the change in association leadership and the challenges facing the City of Hamilton, and describes HDAA’s recent and pending events. pg. 45 LPMA discusses the issues affecting rental property owners due to the accumulating rent arrears from the backlog at the Landlord and Tenant Board. pg. 49 WRAMA reports on the Board’s priorities, puts a call for volunteers, and outlines its current and future events. pg. 53 EOLO reports on obtaining evictions under the Ontario eviction moratorium, the rent freeze and AGI increases, COVID-19 operating impacts, financial relief for tenants, a new City by-law, and the new CMHC mortgage rule. pg. 57
The Member Associations
Regional Association Voice Regional Association Voice features the latest industry news from four member associations.
Associations’ view of the pandemic’s impact on the rental housing industry Association leaders across Canada discuss COVID-19’s impact and the government’s actions with respect to the rental housing industry.
6 | January 2021
Final Take Away Post-pandemic strategies for rental housing property managers
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PRESIDENT’S CORNER CFAA invites you to register to see and hear Benjamin Tal on April 22, when he will lead off CFAA Virtual Conference 2021, with his always-insightful and ever-engaging Economic Update. Attend Benjamin’s presentation from 3 to 4 pm EDT, and then stay to network with him and your colleagues and friends. See page 40 for a full description of CFAA Virtual Conference 2021. As CFAA has said for decades, government financial assistance to low-income people should take into account the amount of rent that they need to pay in different regions. CERB saved the day for most homeowners, renters and landlords, but it has left a segment of the renter population with substantial rent arrears, to the detriment of them and their landlords. See page 35 for CMHC’s data on rent arrears, and the adjustments needed to get to a more accurate, current figure. CFAA is working with anti poverty groups, non-profit housing providers, other private sector associations, researchers, and policy experts, in a group known as the Canadian Housing Policy Roundtable, to advocate for a solution to the rent arrears problem. See page 37 for more details. On January 28, CMHC released the result of its rental survey for October 2020, which showed a modest increase in vacancies, and continued rent increases, in most regions. See page 39 for some details, including how vacancies vary between City cores and suburbs. CFAA comments on the figures in a section called “Vacancies versus rent increases: a matter of time and location.” We also provide a brief update on vacancies and average asking rents in Toronto, from the research firm Urbanation.
8 | January 2021
CFAA is establishing an Equity, Diversity and Inclusion Committee to support rental housing providers in meeting today’s standards for promoting those goals. CFAA’s committee will co-ordinate its work with the equivalent committees within the Federation of Rental-housing Providers of Ontario and LandlordBC. CFAA invites input on those issues. CFAA is continuing its strategic partnership with The Home Depot, which sells maintenance, repair and renovation products and services across Canada. Join HOME DEPOT PRO at no cost, and make sure The Home Depot knows you are a member of CFAA, either as a direct landlord member, or by being a member of a CFAAmember association. HOME DEPOT PRO provides benefits for purchasers, and increases support for CFAA, thus helping us protect the rental housing industry at the federal level.
John Dickie, CFAA President John Dickie, CFAA President
rentalhousingbusiness.ca | 9
In this issue of... NATIONAL OUTLOOK CFAA Member Associations 35. How much are current rental arrears? What is the total impact of COVID-19 on rental housing?
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
37. How should governments address COVID-19 rental arrears?
Greater Toronto Apartment Association (GTAA) www.gtaaonline.com P: 416-385-3435 Hamilton & District Apartment Association (HDAA) www.hamiltonapartmentassociation.ca P: 905-632-4435
39. How high have vacancies risen due to COVID-19? How much does location matter? How have rents changed?
40. W hat does CFAA plan for its Rental Housing Conference in 2021?
To subscribe to CFAA’s e-Newsletter, please send your email address to firstname.lastname@example.org.
The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $525 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.
10 | January 2021
Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572 LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604-733-9440 Victoria Office P: 250-382-6324 London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999 Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560 Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703
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One year later – Conversations about COVID-19 and the rental housing industry It has been a year since the first case of COVID-19 was reported in Canada, and a lot has happened since then. The Canadian economy has been affected in many different and negative ways. The pandemic has also taken its toll on the rental housing industry. Rather than taking a big picture view of what has happened to our industry, RHB Magazine wanted to speak to an owner one on one to get their take on the government’s actions to help people and businesses weather the pandemic financially. We discussed how these decisions have affected their business, as well as other related topics. We also spoke to a legal expert and a financier about their perspectives on pandemic-related matters that have affected the rental housing industry. certainly helped deal with what could have been a major problem for multi-residential landlords. By and large, our tenants have been doing the right thing with their stimulus money, that is buying food, paying their rent and staying safe. This pandemic has brought many things to light, one of them being just how important housing is in this country and around the world.
R. Jason Ashdown Co-Founder and CSO. (Chief Sustainability Officer), Skyline Group of Companies
RHB: The federal and provincial governments have instituted a number of programs to help businesses and individuals deal with the financial challenges brought about by COVID19. What is your take on the government’s financial relief programs for people who have lost their jobs or been forced to close their businesses? Jason Ashdown: The financial stimulus the government has delivered in a variety of ways for a variety of segments of the population has
14 | January 2021
RHB: How have you and other landlords helped tenants during these difficult times? Jason Ashdown: I will start by saying that out of all the landlords that I know and have had conversations with during this pandemic, all have worked diligently to find ways to help and implement programs to keep our customers, our tenants, housed and safe. Respected landlords have been finding ways to help tenants through a variety of programs with rent deferral, rent assistance, tenant relief efforts, and the list goes on. Unfortunately, the general public rarely hear about these efforts. As a company, we developed and implemented a Tenant Relief Fund in 2019. We call the program RISE (Reach, Impact, Support, Elevate). This program is meant to help our tenants that fall upon hard times, generally at no
By David Gargaro
fault of their own. Things like illness, job loss, abuse, accidents, and any number of situations. This fund is available to help those tenants that need it most. We have a dedicated Tenant Support Team that will help our tenants find resources, and assistance with problems, including financial aid. Coming into this pandemic, we were very fortunate to already have this program in place, so it was relatively easy for us to implement on a larger scale.
RHB: Have you had any challenges with making use of the government programs to get financial assistance for yourself or tenants? Jason Ashdown: That is a good question. I
RHB: What do you mean by “bad acting”? Jason Ashdown: By bad acting, I don’t mean falling behind on rent because they are struggling to make ends meet through no fault of their own. I’m talking about tenants who are choosing to boycott paying rent because they can’t be evicted. These constitute a small number in our portfolio, but the outstanding balances owing are unprecedented in my 25 years in this business. As for the moratorium on evictions, I understand this may sound like a good idea to keep people housed, but it will also cause some very good tenants to have to endure some very difficult neighbours for an extended period of time.
think the rental system, although slightly different from province to province, works just fine when operating in a normal environment. That being said, Ontario is hands down the most burdensome and takes by far the longest amount of time to administer; it takes up to five times longer than the other provinces. When we experience something like a pandemic, it’s obviously very, very hard to plan for, for landlords and the government. So having a system with challenges going into the pandemic is exacerbating the problem now.
RHB: How has this affected the tenants who are paying the rent? Jason Ashdown: I would generally like to
RHB: Are there any government actions that have been detrimental to your rental housing business? If so, what has been the problem? Jason Ashdown: If we want to highlight things
a broad-brush approach that really didn’t help the tenants needing help the most. There are several tenants that are falling through the cracks, who are finding themselves in a very difficult financial position, for any number of reasons, job loss, illness, or perhaps they do not qualify for a stimulus package. Any variety or combination of reasons really. The rent freeze gave everyone in Ontario and BC a holiday on rent increases for one year.
that were detrimental, I would bring attention to decisions that were knee-jerk in nature. Had there been more consultation with our industry, they could have been rolled out differently and more effectively. Now, obviously, having a moratorium on evictions removes the one and often only tool that landlords have for dealing with bad acting tenants.
commend our tenants for what I have witnessed over the course of this pandemic. Most have been managing the situation with discipline and respect for one another and our building staff.
RHB: What is your take on the freeze on rent increases? Jason Ashdown: The rent increase freeze was
rentalhousingbusiness.ca | 15
RHB: Do you have an alternative solution than instituting a freeze on rent increases? Jason Ashdown: From a landlords’ perspective, it may have been more impactful to give more money to less people. I mean, rather than giving everyone in a building $40, it would have more impact to give a select number of people $400 or $4000 to help them get back on track. That way, everyone would be helping just a little bit to support those that need it most, thus taking significant pressure off those tenants that are really struggling. But once again, hindsight is 20/20.
RHB: What should the government have done to address these issues instead? Jason Ashdown: I guess if I was to say anything here, it would be to consult with the professionals in the industry before implementing wide-sweeping changes. As an industry, we take great pride to work diligently and be a part of the solution when it comes to housing management and housing supply, including in a crisis, so please include us in the conversation.
RHB: As a property owner, you still have to take care of your buildings and make sure that tenants have a safe place to live. Has the pandemic affected your ability to maintain or upgrade your rental housing properties? Jason Ashdown: When you ask how the pandemic has affected the ability to maintain or upgrade rental housing properties, those answers are simple ones really. We are trying to reduce access to occupied apartments, as we’re mandated to reduce contact with each other, so any non-urgent maintenance in apartments has basically been put on hold or taken care of in a different way. When it comes to capital expenditures, the same thinking applies. Some non-urgent capital improvements have been put on hold. Capex projects that are relatively noninvasive in nature can still move forward, like a roof repair or replacement. But considering pretty much everyone is home right now 24/7, we have reduced our number of cosmetic construction projects like hall or lobby upgrades until a future date. Some projects that we must move forward with that relate to tenant and public safety. Things like elevator modifications, fire safety systems or emergency lighting as examples must still be completed.
16 | January 2021
Kristin Ley, Lawyer, Cohen Highley LLP
RHB: The federal and provincial governments have instituted a number of programs and initiatives to help companies and individuals deal with pandemic-related financial and business challenges. Has the government amended any legislation designed to help those in the rental housing industry? Kristen Ley: Amendments to the Residential Tenancies Act, 2006, which provide improved opportunities for early resolution of applications before the Landlord and Tenant Board, are helpful to the industry. A lot of misinformation was circulated by tenant advocates about Advanced Resolutions and, in particular, the ability for landlords and tenants to agree that a section 78 clause would apply to a rent repayment agreement reached between them. In truth, the expanded scope of early resolutions will assist with the backlog of cases before the Board and will afford parties an opportunity to save the expense and time associated with waiting for a hearing date simply to meet with a Dispute Resolution Officer or mediator.
RHB: Is there any new legislation that relates to COVID-19 and the rental housing industry? Kristen Ley: The passing of Bill 218, Supporting Ontario’s Recovery Act, at the end of the year limits liability for COVID-19-related claims. It gives some comfort to organizations and operators who acted in good faith in following the public health guidance offered for limiting the spread of COVID19.
RHB: Have government actions have been detrimental to the rental housing industry? Kristen Ley: The financial support offered through CERB and other government programs did not do enough to assist tenants who were unable to pay their rent or who chose to spend the funds received on expenses other than rent, continued on page 20
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How much money has the government paid out? The Government of Canada has created a number of benefit and incentive programs to help Canadian businesses and individuals to deal with the financial issues brought on by pandemic-related shutdowns. There has been a lot of discussion about whether this funding could have been put to better use or directed to people who really need it. To follow is a breakdown of the payouts from different programs. According to the Government of Canada, from March 15 to October 3, 2020, 8.9 million Canadians applied for the $2,000 per month Canada Emergency Response Benefit (CERB) payments. During this time, there were 27.57 million applications, with a total dollar value of $81.64 billion. According to the Canada Revenue Agency (CRA), the majority of payments went to people who earned less than $47,630 in 2019. However, at least 114,620 people who earned from about $100,000 to $200,000 applied for the CERB, while 14,070 people who earned more than $210,000 also applied. The Canada Recovery Benefit (CRB), which replaced CERB, has paid out more than $2.72 billion in benefits to 1.1 million people since late September. From March 15, 2020 to January 24, 2021, there were 2,274,610 approved applications for the Canada Emergency Wage Subsidy (CEWS), with a total dollar value of $60.42 billion. The highest number of applications (2,185,200) were for less
18 | January 2021
than $100,000. The majority of claims went to small businesses with 25 or fewer employees. Companies in professional, scientific and technical services, construction, and the retail trades had the most claims. As of January 21, 2021, there were 819,782 approved Canada Emergency Business Account (CEBA) loans, covering 407,543 businesses. The total number of funds approved for CEBA loans and expansions was $41.3 billion. Businesses with up to nine employees accounted for 77 per cent of approved CEBA loans. According to Statistics Canada, almost 30 per cent of CEBA amounts went toward payroll, while less than 20 per cent went toward paying suppliers. Starting on September 27, 2020, Canadian businesses, non-profit organizations, and charities that have lost revenue due to COVID-19 may be eligible for the Canada Emergency Rent Subsidy (CERS), which will cover part of their commercial rent or property expenses until June 2021. This subsidy will provide payments directly to qualifying renters and property owners, and will not require landlords’ participation. As of January 24, 2021, there have been 265,510 approved applications for CERS, with a dollar value of $918.7 million ($821.2 million in CERS, $97.4 million in lockdown support). Most applications have been for amounts between $2,000 and $4,000. By John Dickie, President, CFAA
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continued from page 16
despite mounting arrears. Given the monthslong moratorium on residential evictions and the fact that the Landlord and Tenant Board ceased processing the majority of eviction applications during that time, a program for residential rents similar to that provided for commercial rents would have benefited the industry. Both the backlog of cases before the Board and the sizeable arrears owed by households can be expected to grow, straining the financial position of larger operators and risking the viability of smaller operators.
RHB: Have there been any other detrimental government decisions? Kristin Ley: On top of a lack of support for the residential rental industry, the imposition of a rent freeze for 2021 was a significant hit to operators, especially those who had waived or deferred rent increases in 2020 in an effort to provide some relief to tenants. Early public comments by the Premier and the Mayor of Toronto concerning rent and an assurance that individuals who could not pay their rent would not be evicted was certainly detrimental to the industry. The message was misleading at best and was shared widely.
RHB: What do rental housing owners need to know or do with respect to legislation? Kristen Ley: Owners need to be aware of the Bill 184 amendments to the Residential Tenancies Act, 2006, particularly with respect to the obligation for a Board Member to consider whether a landlord has attempted to negotiate a resolution with the tenant on an application for rent arrears, some or all of which were accumulated after the start of the pandemic. An adjudicator must consider the steps taken by the landlord and if the Board is not satisfied that attempts were made in accordance with 83(6), a member may delay or deny an order terminating the tenancy.
RHB: Is there anything else that rental property owners should know or do to protect themselves from a legal perspective? Kristen Ley: Operators will want to continue to follow public health guidance on limiting the spread of COVID-19 and ensure appropriate cleaning and sanitizing procedures are in place. It will be important to have policies in place for mask and face coverings and documentation should be maintained to evidence efforts to ensure compliance, such as postings, reminder letters, confirmation received that an individual is exempt from a mask by-law, etc.
20 | January 2021
Rena Malkah, President, CYR Funding Inc.
RHB: COVID-19 has caused a significant number of financial challenges for rental housing owners, especially smaller property owners. Has the pandemic affected their ability to renew mortgages or get financing on rental housing properties? Rena Malkah: The pandemic has not affected the ability to renew mortgages, provided the payments have been made on time throughout the term. However, getting new mortgages approved may be more difficult, as lenders are concerned about tenants being able to pay the rents due to many people having lost their jobs or their businesses.
RHB: On May 28 of last year, CMHC changes its use of fund rules. How has this affected the financing situation for rental housing owners? Rena Malkah: The changes by CMHC not allowing equity take-out funds on multi-family buildings, except for certain uses, have not affected financing much. Since CMHC no longer allows equity take-out, owners can get conventional financing at about 1 per cent higher rate than CMHC. After saving the CMHC premium, it is almost a wash during the first five years.
RHB: Thank you for your input and participation.
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The MAC Awards Celebrate 20 years of Rental Housing Excellence
The 2020 MAC Awards were presented virtually on Thursday, December 3rd in conjunction with the Buildings Show. FRPO’s MAC (Marketing, Achievement and Construction) Awards recognize excellence, innovation and leadership in Ontario’s vibrant rental housing industry. Though we could not gather together in-person to celebrate 20 years of the awards program, this event provided our members an opportunity to network and acknowledge this year’s industry leaders. FRPO President and CEO; Tony Irwin led this year’s ceremony which also included remarks from the Honourable Steve Clark, Minister of Municipal Affairs and Housing. Margaret Herd; Chair of the Board also took to the podium to recognize FRPO’s annual corporate sponsors for their strong support of rental housing in Ontario. On behalf of the FRPO Board and staff, we wish to congratulate the 2020 winners and nominees for their achievements and professionalism. We look forward to gathering together again in the near future at this must attend event. Thank you to our generous sponsors for their unwavering support of FRPO and rental housing in Ontario.
2020 FRPO MAC Award Winners Best Property Management Website Hazelview Properties (formerly Timbercreek Communities) Advertising Excellence for a Single Campaign Rhapsody Property Management Services – The Brixton Prelease Campaign 22 | January 2021
Excellence – Social Media Hazelview Properties (formerly Timbercreek Communities) Rental Development of the Year Sifton Properties Limited – 1325 Riverbend Road, London
Outstanding Community Service – Rental Housing Provider Skyline Group of Companies Outstanding Community Service – Supplier Member Wyse Meter Solutions Inc. Environmental Excellence Minto Apartments Leasing Professional of the Year Grace Evans – CAPREIT
Resident Manager of the Year Diane & Bruce Nace – Realstar Customer Service Award of Excellence Rhapsody Property Management Services Company Culture Award of Excellence Killam Apartment REIT Certified Rental Building Member of the Year Minto Apartments
Property Manager of the Year Marc Blanchard – CAPREIT
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Associations’ view of the pandemic’s impact on the rental housing industry
By David Gargaro
RHB Magazine spoke to several rental housing association leaders about the impact of COVID-19 on the rental housing industry. We discussed the situation in different parts of Canada, the impact of government programs, initiatives, and incentives, what associations would like to see the government do to help rental housing owners, and what they foresee for the industry.
Participants: • David Hutniak, CEO, LandlordBC • Cameron Choquette, CEO, Saskatchewan Landlord Association • Tony Irwin, President and CEO, Federation of Rental-housing Providers of Ontario (FRPO) • Kevin Russell, Executive Director, Investment Property Owners Association of Nova Scotia (IPOANS) RHB: What is the situation for rental housing owners one year into the pandemic? David Hutniak: The impacts were more
pronounced for smaller landlords, and they will continue to feel those impacts for some time. We weathered the pandemic better than anticipated, which is good news. Landlords must be vigilant, as we’ve had some nasty surprises, like the emerging insurance crisis, which adds to financial uncertainty for landlords. There is downward pressure on rents and vacancies have nudged up, particularly at the higher end of the market. Landlords are being innovative by offering a month or two of free rent and other incentives to retain and attract tenants. This is a short-term adjustment in the market, as there will be pressure
24 | January 2021
on supply once foreign students return and immigration resumes.
Cameron Choquette: After an eviction
moratorium from April to August of 2020, rental housing providers are seeing stability around nonpayment, and are looking forward to a stable 2021. We are seeing movement from tenants who may be taking advantage of low interest rates to buy a home.
Tony Irwin: In Ontario, members are
experiencing an increase in vacancies, a decrease in average rents, and a decline in rent payments. Vacancies are up from 2 per cent in October 2019 to a projected 3 per cent In October 2020. Average rents are down 2 per cent and rent collection shortfalls have remained around 4 per cent each month. However, initial data appears to show the softening of the market is primarily an issue in urban cores. Downtown Toronto and surrounding areas have been hit the hardest, as residents no longer need to live near major employment areas with the uptake of remote work. Other parts of Ontario appear to be around near-term norms for vacancies and average rents. A challenge for many owners remains accounts receivable. Many operators have been helping residents stay in their homes by providing deferred payment plans. The challenge remains how much and over what period of time will residents be able to pay back past rents. This issue is challenging for smaller owners who may not have the balance sheet strength to continue to support residents in this manner.
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Kevin Russell: The Nova Scotia market is
beginning to experience softness in vacancy rates due to lack of immigration, including international and out-of-province university students taking online classes from home. People who lost service industry jobs gave up apartments for alternative living arrangements. Purpose-built multi-unit residential buildings under construction are beginning to come onto market, with 4,800 units expected in the next 20 to 30 months.
RHB: How have government programs, initiatives or incentives helped or hindered rental housing to date? David Hutniak: The BC government helped
our sector navigate the crisis well. The Rent Supplement Program was a great response to help renters. The government was responsive in returning our sector to a state of normalcy quickly, and took a balanced approach to addressing rent arrears incurred during the COVID-19 period ending August 2020, with the Rent Repayment Plan. We were disappointed during the election, when the government extended the rent freeze through June 2021 but they deserve credit for supporting renters and our sector.
Cameron Choquette: There has been no
targeted industry support for rental housing providers in Saskatchewan, even after providers experienced spikes in rental arrears as a result of the eviction moratorium. However, the federal and provincial benefits for tenants have improved tenants’ ability to pay amidst job losses, reduction in hours, and increased costs.
Tony Irwin: In Ontario, many members have
bridged residents by providing deferred payment plans. Provincially, there have not been direct rent supports. The Canada Emergency Response Benefit (CERB), in combination with other income and employment supports, has a lot to do with why our rent collection shortfall has only been around 4 per cent. There have been positive improvements in relation to the Landlord and Tenant Board in 2020. The government passed Bill 184, Protecting Tenants and Strengthening Community Housing Act, last year, which addressed some challenges. The government increased the complement of adjudicators at the LTB by more than 50 per cent. However, the LTB was not operating at normal levels for most of last year due to the crisis, resulting in a continued backlog of cases.
26 | January 2021
Kevin Russell: The Canada Emergency
Response Benefit kept apartment renters in place. CERB assisted landlords and tenants in working out rental arrears by agreeing to rent repayment schedules. Hearings for Residential Tenancies Applications to Director for non-payment of rent experienced a 37 per cent decrease from July until the end of November. In response to pressure from “renovictions” and rent renewal increases, the Nova Scotia Government introduced a 2 per cent temporary rent cap, through a November 25 Ministers State of Emergency Directive. The cap is scheduled to be in effect until February 2022 or when the state of emergency is lifted, whichever comes first. The 2 per cent cap was retroactive to September 1, and negatively impacted operations, cashflows, major capital upgrades and property transactions.
RHB: What would you like to see from the federal and provincial governments at this stage in the pandemic to help rental housing owners? David Hutniak: We’re concerned that the
federal government will continue to be less than responsive to our sector’s challenges, so LandlordBC’s main federal advocacy goal is to avoid potential damage from increased capital gains tax or other tax increases. Provincial advocacy dominates our focus. Cost increases impacting our sector is exceeding the maximum allowable annual increase permitted under the RTA. The impacts of accelerating cost increases, especially increases in the cost of insurance and impacts of the pandemic, are concerning. We need a cost inflation index aligned with the costs to deliver rental housing, rather than consumer prices. LandlordBC has advocated for portable housing benefits like BC’s Shelter Allowances for Elderly Renters (SAFER) and Rental Assistance Program (RAP). The pandemic has reinforced the belief more must be done to support renters. In fact, now is the time to make rent control more targeted. There is a significant group of higher income renter households who do not need access to rent-controlled housing. By targeting rent control, the subsidy that rent control gives renters could be delivered more effectively to those in need. This would allow our sector to provide people with low and moderate incomes with more access to more affordable market rental housing units, since better-off renters would move to newer, more expensive rental units or into home ownership, leaving more affordable units for the people who need them.
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continued from page 26
Cameron Choquette: A relief program for
landlords who experienced rent arrears due to the eviction moratorium is crucial for small and medium-sized rental housing providers that are important to the housing continuum in Saskatchewan.
Tony Irwin: The best thing the government can do is help residents. Focus on income support programs, support economic recovery measures to reduce unemployment rates, and look for solutions to rent arrears so people can continue to live in their homes, especially those who live in units owned by small owners who may not be able to sustain deferred payments. Governments should look at investments in rental housing as a key driver for economic recovery. Rental housing is in short supply in Ontario, and there is no better time for the government to incent more investment into new construction. The industry has been calling for an expedited path for rental development, including unlocking the potential of infill development. A framework that enables more rental construction can support economic recovery post-COVID-19, and work toward decreasing the substantive supply shortage of rental housing in Ontario.
Kevin Russell: It would have been prudent if
the government enlisted industry input before implementing policies that impact the industry. Policy decisions were not evidence-based, made in haste, and ill-conceived and made without considering the long-term economic impact on the industry and renters.
RHB: What do you foresee happening in rental housing in the next 6 to 12 months? David Hutniak: While there are many
challenges, I remain optimistic about the sector. As foreign students return, and immigration ramps up again, our sector will continue to be called upon to provide the important housing we deliver. In many parts of BC, we have experienced persistently low vacancy rates and we are not building enough new supply of purpose-built rental to meet the demand. We are certainly seeing municipalities target new rental properties, and a pipeline of new projects is unfolding in many of them. Purchasing one’s own home, despite record low interest rates, will continue to be challenging for many folks; for many people, renting is the better option. We need to ensure we meet the demand and provide them with safe, secure, affordable rental housing for the long term.
28 | January 2021
Cameron Choquette: I think the rental housing industry is going to continue to see movement as a result of tenants buying homes. I know our members in our university cities are also hoping for universities to resume in-person classes so that they can recapture students back into the marketplace.
Tony Irwin: As vaccines are administered to
Canadians, COVID-19 cases decline, and the economy recovers, we expect the rental market across Ontario to tighten rapidly. The federal government has announced an increase in immigration targets by 50,000 over each of the next three years. Ontario, specifically the Greater Toronto Area, has been the most attractive place to settle for new immigrants and we expect that to continue. International students and household reformation, driven by young professionals who have moved back home, should drive demand for rental housing. Collectively, these demand factors should drive down vacancies and take us back to a fundamental supply crunch that needs to be addressed. A recent report by Urbanation forecasts a 200,000 rental unit deficit over the upcoming decade in Ontario. Our industry will continue to call on governments to take action to address this underlying challenge that is the root cause for many issues that impact our sector.
Kevin Russell: The next six to twelve months
are going to be interesting for Nova Scotia’s apartment industry. The market will continue to experience softness until immigration picks up, and out-of-province students return to inperson classes. Operations will continue to be negatively impacted until the 2 per cent rent cap is lifted. Nova Scotia will have a new Premier after a leadership campaign ends in February. Two of the three leadership candidates are on record supporting rent caps. An Affordable Housing Commission to remedy the affordable housing crisis was created by the Minister’s State of Emergency Directive. The Commission is to release its report on May 31, impacting the Province’s affordable housing strategy moving forward. IPOANS is well represented on the commission. A bright spot alleviating some of the stress points being experienced, Nova Scotia’s employment numbers have surpassed prepandemic employment numbers.
RHB: Thank you for your input and participation.
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Imposing a moratorium on evictions is poor public policy By John Dickie, Chair, Eastern Ontario Landlord Organization
Several weeks ago, the Ontario government declared a provincial state of emergency, which was expected to last 28 days. Premier Doug Ford also implemented a moratorium on residential evictions, tying it to the Province’s state of emergency. In principle, this action is bad public policy, although it has been implemented with some common sense, as will be noted below. Residential tenancies are terminated for various reasons, including the non-payment of rent, which is often cited as unfair by tenancy advocates. Other reasons for termination of tenancy include tenant behaviour that seriously disturbs other tenants (e.g., failure to prepare for pest treatment and control), that endangers other tenants’ safety (e.g., disabling smoke alarms after previously being warned), or is deemed illegal (e.g., selling illegal drugs, assaulting tenants or building staff). Tenants can avoid having their tenancies terminated if they correct their behaviour. However, the landlord requires the realistic threat of eviction to compel the tenant to change their behaviour if they do not change their behaviour after being properly warned as per the Residential Tenancies Act (RTA). Without this tool, landlords cannot effectively enforce the rules that protect other tenants and neighbours. Tenant advocates see an eviction moratorium as protecting tenants. However, other tenants (i.e., the neighbours of the disruptive tenants) suffer if the landlord cannot compel the disruptive tenant to either change their behaviour or vacate the premises. Those other tenants receive less protection under the moratorium than they should. An eviction moratorium reduces the landlord’s ability to maintain a safe and secure building and rental environment.
32 | January 2021
Terminating residency due to a tenant’s bad behaviour does not typically lead to the tenant becoming homeless. Since they are often capable of paying rent, tenants evicted due to disruptive behaviour typically move into other housing when they leave their current rental unit. In bringing in the eviction moratorium, the Province addressed some of these issues. See the article at page 57 for an explanation of the tenant mis-behaviour that will lead to an eviction order which is enforceable under the eviction moratorium, and which will allow a landlord to obtain an expedited hearing at the Landlord and Tenant Board. Ontario has legal limits on reasons for which a rental property owner can end a tenancy, and offers more protections against evicting residents than other provinces and most other countries. Rental property owners in Ontario have the right to occupy the property for their own use. Therefore, they may need to use eviction applications to enforce an agreement to terminate a rental agreement. A new purchaser or a continuing owner can obtain possession of their property for personal use. Terminating a lease for personal use does not typically lead to homelessness for the tenant, as they have the time and usually have the resources to find a new place to live.
The main problem with an eviction moratorium is that some tenants who can pay rent are choosing to withhold their rent payments until they are legally ordered to pay. Some tenants who have lost their jobs, or have faced financial challenges, require government assistance to pay their rent arrears. However, they often only seek financial aid once the landlord has commenced an eviction application. When the government imposes an eviction moratorium, many landlords are essentially forced to provide housing without receiving compensation.
payment plan. As long as the tenant follows the plan, the LTB will not order their eviction. The tenant always has the opportunity to save the tenancy if they pay their rent arrears.
It is unjust to allow people to receive the benefit of housing without having to pay for it. That is like allowing people to walk out of a grocery store without paying for the groceries in their cart. No store owner would accept that situation, and neither would the police or the courts. However, the government expects landlords to accept that situation.
Rental housing providers would like to see a dedicated program from the Province to pay rent arrears due to COVID-19, and to support people who are locked into higher rents than they can afford with their reduced incomes. However, the Province should not force landlord to provide free housing to tenants with income problems. No one expects grocery stores to feed the poor or department store owners to clothe the poor. Equally, rental housing providers should not be expected to house the poor, regardless of the reasons they are poor.
The RTA makes an eviction moratorium unnecessary. When the Landlord and Tenant Board (LTB) imposes an order for termination due to non-payment of rent, the LTB allows a tenant to stay in the unit as long as they make payments toward rent arrears. The LTB encourages tenants and landlords to create a payment plan for unpaid rent. If the landlord and tenant do not come to agreement on a plan, the LTB will impose its own
The federal and provincial governments are already helping people who have faced financial hardship due to COVID-19. In many municipalities, the city will provide funds to pay off rent arrears in order to keep people housed. The Province has provided a great deal of funding for that and other pandemic relief.
If governments want to help the poor, they should provide housing, or better for taxpayers and poor tenants, governments should provide the money needed for the poor to pay for adequate housing in the rental market.
rentalhousingbusiness.ca | 33
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Current rental arrears $600 million across Canada By John Dickie, CFAA President
CMHC issued the results of its October 2020 rental survey on January 28, 2021, including data on rental arrears. Having CMHC data on rental is welcome, but the data does not cover the secondary market, and it is out of date. CMHC reports rental arrears of $150 million for the 1,912,000 rental units in the purpose-built rental supply across Canada. Extrapolating that figure to the 4,100,000 rental units which make up the whole private rental market suggests total rent arrears of $320 million, at the beginning of October 2020. Since October, rental arrears have been building steadily. From industry reports, it is clear that most tenants who were behind on their rent in October continued to be behind every month since then. In Ontario, the arrears situation is worsening because of the second major lockdown. Other regions have also seen renewed lockdowns, with similar income disruptions as those which occurred during the March-April lockdown. By the time you read this, arrears will have built up for five months since October 1, while the October 1 figures reflect six months of income disruption. If the build up of arrears is consistent across the two periods, as reported by many rental housing providers, The arrears figure understates then by February 15, 2021, the total the impact of COVID-19 on rent arrears will amount to $587 rental housing providers. million, or $600 million in round numbers. When the CMHC survey was taken, many post-secondary students had Investors who rent out just one or broken their leases, leaving units two condos or single-family homes vacant and un-rentable from May are particularly hard hit, since they to August 2020. Those rental losses may be short half or all of their rent would have been classified as bad revenue, while their costs still have debts, rather than arrears. to be paid. As well, other tenants ended their CFAA has come together with other tenancies, and landlords were hardassociations and housing groups to pressed to re-rent the units. advocate a rent arrears program to $1 billion or $1.2 billion would be a address this important industry and more reasonable estimate of those tenant welfare issue. two impacts together with the rent For details, see the article on the arrears. next page.
rentalhousingbusiness.ca | 35
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NATIONAL OUTLOOK COVID-19 Rental Arrears Response
To address the rent arrears problem, CFAA is working with housing associations and actors from across the housing continuum, including community organizations, other private sector associations, researchers, planners, data and policy experts. The group is known as the Canadian Housing Policy Roundtable.
The arguments advanced by the Roundtable As a result of COVID-19, previously precarious but steadily employed workers, such as restaurant workers and retail employees, became vulnerable and at risk for eviction due to non-payment of rent, particularly in higher rent communities like Toronto and Vancouver. Tenancy insecurity disproportionately affects those with low incomes, lone parent families, children, female headed households, single adults, Indigenous people, newcomers, racialized people, and those with mental health challenges. An eviction crisis due to the massive job losses was avoided by the swift federal roll out of the Canada Emergency Response Benefit (CERB). CERB was designed for simplicity and speed in order to sustain households and the economy, and as a result a flat rate delivery structure was a key feature of the program. As a result, while a national evictions crisis was averted, rent arrears have grown, especially in the communities with relatively high rents. For example, while the CERB was more than adequate in communities with relatively low rents such as Edmundston, Trois Rivieres and Prince George, it was grossly inadequate in areas with higher rents such as Toronto or Vancouver. The new Canadian Recovery Benefit (CRB), operates in largely the same fashion. One provincial response to hardship experienced by renters due to the global pandemic was the Government of British Columbia’s implementation of a temporary Rental Supplement Program, which provided between $300-$500 as a rent payment to eligible low-income households through a direct monthly transfer to landlords. The program was viewed as a crucial income support for both renters and landlords. However, the Ontario government did not adopt any specific assistance for rents and rent arrears, despite the rent levels in Toronto and other major Ontario centres, and the increased hardships many low-income people face.
CFAA and Roundtable recommendations Learning from the experience with CERB, and the need for income supports which account for cost of living, the Roundtable is recommending targeted intervention to assist the many tenants living in high rent areas who experienced a loss of income, and are facing rent arrears they are unable to pay. A refocused policy would prioritize targeted intervention and prevention to serve those who need the assistance the most. That would make the assistance cost-effective. Key design considerations are the following: Eligibility: The arrears program would be means-tested and available to low and moderate-income tenants who are experiencing financial hardship due to COVID-19. Ease of application: The longer someone can’t afford to pay their rent, the longer existing arrears will accumulate and lead to evictions. Given the need for a timely arrears intervention, applying to the recommended arrears program should be straightforward, with minimal requirements, and easily accessible to tenants. Payment processing times should be streamlined to prevent further arrears from accumulating. Tied to actual arrears amount: Funds dispersed through the arrears program should be allocated based on an individual’s rent owing. Targeting each individual’s rent amount will account for differing rent amounts and ensure people have enough money to pay their rent and address their arrears backlog, while also making good use of government funds. Funding to landlords: Having program payments go directly to landlords will support the timely cancellation of any eviction proceedings in progress, and ensure that landlords are paid outstanding rent amounts that can immediately be used to cover outstanding debts and mortgage payments. Making payments directly to landlords will also prevent the arrears payments from making tenants ineligible for
rentalhousingbusiness.ca | 37
JANUARY 2021 other forms of social assistance they receive based on their income. Such payments to landlords should be conditional on cancelling any residual obligation incurred during COVID-19 by those tenants, and on ceasing eviction processes that may be in progress for those arrears. Timeliness: It is imperative that the arrears problem be solved quickly before the impact of arrears is further compounded on tenants and the housing system. The new arrears program should make every effort to leverage existing delivery mechanisms to ensure speedy delivery. Secures tenure and eliminates tenant debt: To be effective this program must prevent evictions while also eliminating tenant debt. Arrears can threaten tenure, but outstanding rental debt can act as a barrier to finding future housing. This response is needed not only to mitigate the risk of evictions, but also to ensure arrears do not hinder a tenant’s ability to change their housing by choice. Tie in with the Canada Housing Benefit: The Canada Housing Benefit has been an important step forward in meeting affordable housing needs in Canada. As the CHB is being implemented, there is opportunity for it to be expanded and revised to be responsive to differential rent amounts across the country and across households. Expanding eligibility and tying benefit amount to actual rent would considerably diminish the risk of a future evictions crisis and prevent homelessness and bankruptcies. Connecting the delivery mechanism of the arrears program with an ongoing prevention program, would allow for seamless integration and save time, effort and money, on the part of the government(s), the tenants and the landlords.
Support for the Rent Arrears Proposal As this article goes to press, the Roundtable’s rent arrears recommendations have the explicit support of the following: Non-profit housing providers and antipoverty groups Ontario Non-Profit Housing Association (ONPHA) Habitat for Humanity Options for Homes Wellesley Institute United Way Centraide Canada United Way - Greater Toronto The Toronto Alliance to End Homelessness The Peel Alliance to End Homelessness 360ºkids Blue Door Support Services York Region Homelessness Community Advisory Board Housing researchers and data experts Centre for Urban Research and Education Nicholas Gazzard Consulting Priority Decision Data Community Data Program
For-profit rental housing providers Canadian Federation of Apartment Associations (CFAA) Federation of Rental-housing Providers of Ontario (FRPO) LandlordBC Investment Property Owners Association of Nova Scotia (IPOANS) Professional Property Managers Association – PPMA (of Manitoba) Waterloo Regional Property Management Association (WRAMA) Greater Toronto Apartment Association (GTAA) Calgary Residential Rental Association (CRRA). Eastern Ontario Landlord Organization (EOLO) Manufactured Home Park Owners Alliance (of British Columbia)
Conclusion The Roundtable expects to receive more endorsements and support from other housing and anti-poverty groups. With strong support across non-profit housing providers, for-profit housing providers, antipoverty groups and housing researchers, the Roundtable and CFAA look forward to pressing the federal government to take effective action to address rental arrears and long-term housing affordability for low and moderate-income tenants.
38 | January 2021
NATIONAL OUTLOOK Vacancies up in most centres across Canada
According to CMHC, the average rental vacancy rate in major centres across Canada increased from 2.0% in October 2019 to 3.2% in October 2020. According to CFAA’s members and CMHC, vacancy rates generally increased in the city centres and university towns, while staying flat or rising less in suburbs and in smaller centres which do not serve universities or colleges. See tables 1 and 2.
Table 1: Vacancy rates in Toronto Toronto
CMA City Central area Mississauga Richmond Hill Pickering/Ajax
1.5% 1.5% 2.9% 1.2% 1.2% 2.4%
3.4% 3.7% 7.3% 2.4% 2.0% 1.7%
1.1% 1.0% 1.3% 0.5% 1.2% 0.6%
2.6% 2.8% 6.3% 1.9% 1.6% 1.4%
Table 2: Vacancy rates in Vancouver Vancouver
CMA City Central area Richmond New Westminster Surrey
Despite the increase in vacancy rates due to COVID-19, there remains an underlying shortage of rental housing, especially in Greater Toronto and Greater Vancouver. Bob Dugan, Chief Economist, CMHC, says, “The vacancy rate for purpose-built rental apartments in Canada’s CMAs increased in 2020. The economic impact of the pandemic has significantly reduced rental demand. Lower international migration, fewer student renters and weaker employment conditions led to weaker inflows of new renters. While vacancy rates increased in many centres, we continue to see a need for more rental supply to ensure access to affordable housing.”
October 2020 vacancy rates in leading centres In Eastern Canada, St. John’s (7.5%), Charlottetown (2.7%), Moncton (2.8%) and Halifax (1.9%) saw their vacancy rate increase, while the rate remained stable in Saint John (3.1%). In the Province of Quebec, Montréal’s vacancy rate increased to 2.7%, while Quebec City’s rate sat at 2.7%. In Ontario, vacancy rates increased in Thunder Bay (4.1%), Ottawa (3.9%), Windsor (3.6%), Toronto (3.4%), London (3.4%), Kingston (3.2%), St. Catharines-Niagara (2.7%), Peterborough (2.6%) and Greater Sudbury (2.5%). In Belleville (3.0%), Oshawa (2.3%), Brantford (2.2%), Guelph (2.2%), and Kitchener-Cambridge-Waterloo (2.1%), vacancy rates were little changed. Vacancy rates decreased in Hamilton (3.5%) and Barrie (2.1%).
WANT TO STAY UP TO DATE WITH NATIONAL OUTLOOK? Sign-up for CFAA’s National Outlook e-newsletter to receive up-to-date news on what is happening across Canada, as well as industry insights and insider information on CFAA happenings. Email firstname.lastname@example.org to start receiving CFAA’s e-Newsletter today!
rentalhousingbusiness.ca | 39
rentalhousingbusiness.ca | |39 39 rentalhousingbusiness.ca
JANUARY 2021 In Alberta and Manitoba, vacancy rates increased in Edmonton (7.2%), Calgary (6.6%), Lethbridge (5.6%) and Winnipeg (3.8%). In Saskatchewan, Regina (7.5%) and Saskatoon (5.9%) saw slight decreases in vacancy rate. In British Columbia, vacancy rate increased in Vancouver (2.6%) and Victoria (2.2%) while Kelowna’s vacancy rate decreased to 2.1%.
Vacancies versus rent increases: a matter of time and location Despite the increases in vacancy rates, average rents increased in most centres, according to CMHC. That appears counter-intuitive, since rents usually moderate or fall when vacancies increase. One explanation may be that the vacancy rate is reported at one point in time, namely October 1 for this survey, whereas rents are set all year round. The first pandemic shutdown took place in mid-March 2020. By that time, most landlords would have given their 90 day notices of rent increases for rent increases to take effect in April, May, June or even July. In rent-controlled provinces, most of those notices went out to take guideline rent increases. Therefore, the October survey is picking up 9 or 10 months of rent increases set before the shutdowns occurred, and only two or three months after they occurred. Even for unit turnovers, with 60 day notices from vacating tenants, most landlords would have rented those units for April and May before the lockdown, so that the October survey is picking up 8 or 9 months of rent changes agreed to before the shutdowns occurred, and only three or four months agreed to after they occurred. In addition, since they relate to October, which is now five months past, the CMHC figures are out-of-date. Within the rental industry, there is a general understanding that over those last five months, rents have levelled off. In many cases, rents have fallen in areas with elevated vacancy rates. Urbanation is a leading condo and rental market research firm which collects Toronto rental data more frequently than CMHC and reports it more quickly. Urbanization’s January 2021 report, for Q4 2020, found vacancy rates similar to the CMHC findings for both the Toronto core and Toronto suburbs for October. Comparing units listed for rent in purpose-built rental buildings in Q4 2020 with those listed in Q4 2019, Urbanation also reported a decrease in asking average rents in the City of Toronto of 10 per cent, with a decrease in the suburban 905 belt of 2.2 per cent. According to Urbanation, the average asking rent for condo units in the City of Toronto for Q4 2020 was down 17.2 per cent from Q4 of 2019, while in the suburban 905 belt, the average was down 4.9 per cent.
CFAA Virtual Conference 2021
Because of COVID-19, CFAA will not be holding an in-person conference in Spring 2021. Instead, CFAA is planning CFAA Virtual Conference 2021, to offer education sessions, networking opportunities, the CFAA Awards presentations, and a tradeshow, all of it virtual. Networking To provide a top-quality virtual networking experience, CFAA expects to use a platform which includes a “table set up” for attendees. As an attendee, you will be able to move between tables of six or eight people as you please, to interact with CFAA members from across Canada, catch up with colleagues and friends, meet new colleagues and make new friends. Virtual Tradeshow and the CFAA Awards Tradeshow booths will provide an interactive experience to attendees, and CFAA Awards great value to exhibitors, through innovative technology. As an attendee entering the booth, you will see the booth almost as if you were standing in Application front of it. Each booth will have interactive “tags”, which you can click to get Deadline advanced more information. You can choose to watch an exhibitor’s “elevator pitch”, a to Tuesday, April 13. demonstration of a new product or service, endorsements, or other videos or links. The Tradeshow will run from 3 pm to 5 pm (Eastern time), on Tuesday, May 4, Wednesday, May 5 and Thursday, May 6.
40 | January 2021
NATIONAL OUTLOOK On May 4, CFAA will open the Tradeshow with the CFAA Awards for Rental Housing Provider of the Year, New Product or Service of the Year, Suppliers Council Member of the Year, and more. On May 5, CFAA will open the Tradeshow with the Awards for rental housing personnel. On May 6, CFAA will open the Tradeshow with the Awards for rental housing developments and renovations. Education Sessions CFAA Virtual Conference 2021 will lead off with Benjamin Tal’s Economic Update on April 22 at 3 pm EDT (= 12 noon PDT, 1 pm MDT and CST, 2 pm CDT, and 4 pm Bengamin Tal ADT). Networking will be available for 30 minutes before the presentation, and for an hour after it ends at 4 pm EDT. On the Thursday afternoons, May 13, May 27, June 3 and June 10, attendees can expect education sessions on topics such as: • Operations Roundtable, • Property Management Technology, • Insurance Cost Management, and • Sub-Metering. Visit www.CFAA-FCAPI.org for confirmation of the presentation dates, and the latest news on content and timing.
To sponsor or exhibit at CFAA Virtual Conference 2021, contact Andrea at email@example.com.
Register now! CFAA is looking forward to helping our members connect, learn, and explore new and better products and services in these difficult times. Register now for CFAA Virtual Conference 2021.
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RHB’s forum for rental housing associations to share news, events and industry information
Hot Topics: HDAA reports on the change in association leadership and the challenges facing the City of Hamilton, and describes HDAA’s recent and pending events. pg. 45 LPMA discusses the issues affecting rental property owners due to the accumulating rent arrears from the backlog at the Landlord and Tenant Board. pg. 49 WRAMA reports on the Board’s priorities, puts a call for volunteers, and outlines its current and future events. pg. 53 EOLO reports on obtaining evictions under the Ontario eviction moratorium, the rent freeze and AGI increases, COVID-19 operating impacts, financial relief for tenants, a new City by-law, and the new CMHC mortgage rule. pg. 57
The Member Associations
PRESIDENT’S MESSAGE Happy New Year! I think many of us are excited to have made it to the new year and are all hopeful that this year will see an end to the pandemic. However, it is safe to say that the first half of the year at the very least may not see significant changes. We are still quite entrenched in a second wave of the COVID-19 virus and have been in lockdown for several weeks now. Restrictions are not due to be lifted until around the middle of February but this is still quite uncertain, as no one can accurately predict how the numbers will go. Hamilton is struggling financially and we are likely to see many businesses go under due to the financial hardships they have faced throughout the pandemic and most significantly from the lockdowns. Housing providers are doing what they can to support their tenants who have been financially impacted, but many housing providers, particularly smaller landlords, are also facing similar hardships. Of course, with the ongoing pandemic, the HDAA does not foresee holding any in-person events for the foreseeable future. We will continue to hold virtual events and provide information and industry updates for our members. We sincerely hope that things take a positive turn before the end of the year, and that we are able to see everyone in person again sooner rather than later. - Tina Novak, President, HDAA
Presidential announcement The HDAA saw a significant change at the end of the 2020 year with a change in presidency. After nearly two decades, Arun Pathak had decided it was time to step down as President of the association. Arun has been instrumental in shaping the association over the years and has been a strong advocate for housing providers, not only locally but provincially and federally as well. We are very fortunate to have had him leading the association over these many years and are also fortunate to have him stay on in a past president consulting role to help with the transition. Arun Pathak We are excited to announce that Tina Novak has taken over the role of President of the association. Tina has been very active with the association over the years as a Director on our Board of Directors, a volunteer on our Membership, Events and Education Committee, and has provided education to our members at many educational seminars. Tina has been involved in property management for nearly 30 years and will bring a wealth of knowledge
and experience to the role of President. Tina has begun transitioning into the role and we are excited about this next phase of the association under Tina’s guidance.
New year but similar challenges Last year was full of challenges and uncertainty for the industry from eviction bans, closures and delays at the LTB, and financial hardships faced by many tenants and housing providers. Unfortunately, it seems Tina Novak many of these issues will continue into the new year. The Province of Ontario recently announced yet another eviction ban until January 27, which may possibly be extended. The Province has also frozen rent increases for the 2021 year and the LTB is still experiencing significant delays. Larger housing providers have not had the high rent default rates that were first predicted at the start of the pandemic, but smaller landlords are going through more significant hardships and, unfortunately, government support so far has been very underwhelming.
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Many smaller landlords are currently stuck in situations where tenants are no longer paying rent and they have little to no effective recourse, particularly when eviction bans are in place. Even when eviction bans are lifted, the LTB is experiencing such significant delays that these matters may not see a hearing for, at the very least, several months, with some landlords still waiting for matters to be heard that were filed before the start of the pandemic. Many more landlords are still waiting for their matters to be heard that were filed after the first eviction ban. With such significant delays, it is more important than ever to work with tenants to resolve issues, as the LTB will not provide timely resolutions. A Hamilton-specific issue that will continue to be on the radar in the new year is the licensing regime the City of Hamilton is proposing. As our members know, we already had a long and grueling fight against licensing several years back, but now the City has put it back on the table. HDAA will be doing what we can to make sure that the housing providers’ voice continues to be heard. We will also keep our membership updated on new developments. Due to the financial burden from the pandemic, Hamilton may also be due for a fairly high residential tax increase of approximately 2.5 per cent, down from earlier proposals of as high as 4 per cent. This is where the average increase stands as of the first City budget meeting of the year; however, City Councillors will be trying to reduce this number further over the next couple of months, since many Hamiltonians are already struggling to make ends meet.
Past events November 24 – Technology Solutions for a Pandemic The HDAA welcomed Parisa Vafaei, Team Leader at Yardi, and Wesley Burgess, Senior Account Manager at Rentsync, for a webinar on technology solutions for housing providers that will help them conduct their businesses virtually under our current pandemic climate. Parisa Vafaei discussed software solutions for housing providers in a pandemic. She provided many great tips and suggestions on how housing providers can use technology to help assist them with everything from applications, marketing, and record keeping to leveraging technology to be able to work remotely. Wesley Burgess discussed best practices for marketing rental properties in a pandemic. He spoke on the importance of marketing and having a proper online presence, as well as how to properly brand and advertise your company and units. He spoke on the importance of having a website that easily connects prospective tenants to you through the ability to book showings and make quick inquiries. Wesley also discussed the growing trend and demand for virtual tours. December 8 – Latest Developments in Tenant Screening The HDAA held a very informative webinar on screening prospective tenants and unit inspections, which spoke to the newest advances in tenant screening, as well as general tips and suggestions for tenant screening and inspections. Chad Guziewicz from Rentify spoke on an exciting new tenant screening option that provides a comprehensive overview of a prospective tenant’s financial health. By analyzing bank records, Rentify can verify information such as income, rental history, and amount paid, as well as general debt management and consistency in payments. John Dobrowolski from Rentcheck spoke on some changes brought about by the pandemic, as well as general tips and suggestions for tenant screening. Rentcheck has implemented changes in their platform in light of the pandemic, such as being able to indicate non-payment due to COVID-19 reasons. John also discussed tips for screening a prospective tenant, which included making sure to get all supporting documentation, and how to thoroughly verify income, and conducting a Google search on a prospective tenant. Lastly, John
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spoke on how to properly read a credit report to get a thorough understanding of a prospective tenant’s financial history. Jim Garnett from Canadian Tenant Inspection Services spoke on the importance of conducting unit inspections. He provided suggestions on how to go about conducting inspections during the pandemic, discussed issues that a landlord might come across with the legalization of marijuana, and provided tips of what to look out for that can indicate a problem in the unit. January 19 – Economic Outlook for 2021 The HDAA was excited to invite Marvin Ryder back after a very successful event last January to speak on the national, provincial, and local economic outlook for 2021. Marvin has been a professor at McMaster University for over 30 years and specializes in marketing, entrepreneurship, and business strategy. He is most recognized for nearly 350 appearances annually on television, radio, and in newspapers commenting on business issues of the day. Marvin provided great insights on what to expect with the pandemic as the year proceeds, advising that to get to a point where we may see some normalcy return by the end of the year we should be targeting approximately 100,000 vaccinations per day, which may prove to be a challenge. Marvin spoke about the housing and rental
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markets in Hamilton and Toronto. Unlike the condominium market in Toronto, which has seen some issues, the housing and rental markets in Hamilton should remain strong. Student rentals are somewhat of a different story but many landlords have pivoted to renting to the general demographic, or have found students who are still renting to experience as close to a normal student life as they can. There is some uncertainly still as to whether students will be returning to in-person classes this year, but it would likely be no earlier than September. Marvin also provided many other great insights about the general economy, whether there is any interest in introducing a basic or universal income, as well as when we may expect another federal election.
Upcoming events February 16 – New Standard Lease and CMHC Report The HDAA will be welcoming back Mark Melchers from Cohen Highley to speak on the new standard lease to be used as of March 1, 2021. The HDAA will also be presenting on the CMHC Rental Market Report for 2020.
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PRESIDENT’S MESSAGE Another year has come and gone, with this one being very different from any other. It was a hectic year for our industry with Premier Doug Ford freezing rent increases for 2021, a major backlog at the Landlord and Tenant Board (more details are included in our article with Joe Hoffer from Cohen Highley), and having to deal with ever-changing pandemic restrictions and safety measures. LPMA ended 2020 with our first-ever virtual Christmas celebration, which was a huge success. I would like to thank our members who contributed to the TLC Charities Foundation toy drive and to the London Food Bank. It was a great way to end a long year on a high note. We will continue to host virtual member meetings until we are able to return to normal; please check our website for meeting dates. In the meantime, I hope everyone continues to stay safe. Here’s to a great 2021!
- Shirley Criger, LPMA President
LT B B A C K L O G A D D S T O L A N D L O R D S ’ D E S P E R AT I O N OVER MOUNTING RENT ARREARS Two years into the backlog at the Landlord and Tenant Board, the situation continues to frustrate property owners. Small operators whose tenants have stopped paying rent are on the verge of losing their properties, while larger landlords are facing arrears in the tens of thousands of dollars — money they are unlikely to ever be able to collect. “For larger landlords, it’s a matter of accumulating losses, but for small ones it can be devastating,” said London lawyer Joe Hoffer. The majority of applications pending before the Board are L1 applications to evict a tenant for non-payment of rent and to collect rent the tenant owes. Although the Board is making them a priority, Hoffer believes that L2 applications and others will be delayed as a result and that there will also be delays in processing new applications. The backlog is so substantial that if a landlord filed an L1 application for a judgment, Hoffer said it would take two or three months before a hearing date was scheduled. And if the hearing is disputed, it could take another month before landlords receive their order. Hoffer said in early January that he was waiting for some orders that date back to September as a result of disputed hearings.
Backlog origins The backlog had already become chronic two years ago due to the shortage of adjudicators needed to hear cases. Last year’s provincial lockdown, which started on March 17, caused hearings to be halted and the backlog to grow. The Province also stopped evictions to protect tenants, many of whom had lost their jobs due to the pandemic. As a result of the backlog and the pandemic, many tenants are living rent-free Joe Hoffer in their units. Hoffer said the situation started to improve last August when the Board began to process L1 applications and to schedule hearings for applications that had been filed before the lockdown. “They have come some distance in attacking the backlog and in reducing the timeline, but it is still substantial,” he noted. Tribunals Ontario is responsible for 19 boards and tribunals, including the Landlord and Tenant Board. The latest Tribunals Ontario 2019-2020 Annual Report stated that on January 9, 2020, the Ontario Ombudsman announced an investigation into delays at the Board and whether the government
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is taking adequate steps to address the delays and backlogged cases, as well as other contributing factors, such as relevant legislation, training, funding, and technology. The report indicated that the terms of some adjudicators were extended and a few more have been recruited. As of December 1, the Board currently has 38 full-time and 36 part-time adjudicators, the highest number ever appointed, according to Janet Deline, spokesperson for Tribunals Ontario. The Board is also shifting resources to prioritize the scheduling of hearings, which are being conducted by telephone, video, and in writing. Deline said that as of December 29, the number of scheduled hearings for applications of all types before the Board is 1,738. “The LTB is reviewing the list of pending matters and is scheduling hearings into February 2021,” she added. In 2019-2020, the Board received 80,874 applications of all types, excluding non-profit co-operative housing eviction applications. Of that total, 44,621 were L1 applications. Hoffer said that one significant problem centres on tenant applications, which are being scheduled more quickly than landlord applications for rent arrears and evictions. In some situations, tenants want a rent reduction for frivolous reasons, such as the fact that their indoor swimming pool hasn’t reopened. “And that is given priority over a landlord application where $20,000 of arrears are outstanding. That’s been the subject of some complaint by the industry,” Hoffer said.
Stop the bleeding Bill 184, which was given royal assent last July, encourages landlords and tenants to make repayment agreements when tenants fall behind in paying their rent and are in danger of being evicted. However, Hoffer suggests that landlords start the eviction process if landlords and tenants are unable to work out a repayment plan, or if the tenant wants to stay but can’t afford the rent. Before landlords file an application, Hoffer cautions them to carefully study the Rules of Procedure and Guidelines, which the Board recently amended. Alternatively, hiring a paralegal helps to avoid the risk of having an application dismissed or adjourned, which could occur if landlords weren’t familiar with the procedure for filing material, or for dealing with case management hearings and with the protocols at the hearing. If landlords follow the requirements, they should be able to obtain an eviction order and a judgment for arrears when their scheduled hearing date arrives. “One way or another, you stop the bleeding,” Hoffer said. “You don’t stop the bleeding if you do nothing, or if you start something and then mess up the process.” Of the landlords who are facing huge arrears, most are in Toronto and other large municipalities where there has been a “keep-your-rent” movement. Hoffer said perpetrators have been using the temporary eviction moratorium to encourage tenants to stop paying their rent entirely as part of their own political agenda. “In those kinds of situations, the Board does not prioritize hearings based on the amount of arrears so they will continue to languish until such time as the Board gets around to processing them,” Hoffer said.
Reasons for delays The logistics of conducting virtual hearings have been challenging for both landlords and the Board. For example, adjournments and further delays result when adjudicators fail to receive evidence that has been filed with the Board, Hoffer said. “In my view, the Board is working very hard to adapt to this new normal and they have made some significant strides to be able to hold a virtual hearing. But there have been a lot of technical challenges and some procedural ones, as well,” he noted.
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Cases that require a hearing cause the greatest delays and some circumstances call for an earlier hearing date. These include illegal conduct, or conduct that poses safety risks and where there is a legal obligation for the landlord to have the tenancy terminated without delay, Hoffer said. Landlords need to make a special request to the Board which, in turn, schedules a hearing immediately in cases where the tenant is threatening to assault another tenant or an employee, or poses a genuine risk of causing a fire, for example.
Ways to reduce the backlog Despite the challenges, landlords and tenants often resolve issues on their own. For instance, many landlords forgive arrears so they can re-rent a unit as quickly as possible. This occurs when tenants have accumulated arrears after losing their job and were unable to cover their rent through the Canada Emergency Response Benefit. “That has helped reduce the backlog,” Hoffer said. In addition, once hearings are scheduled, a number of tenants will pay the outstanding arrears and those applications are removed from the docket. When a hearing is imminent, some tenants offer to negotiate a repayment plan, which results in consent orders and a removal of applications from the docket as well. Bill 184 also includes a process to resolve cases for non-payment of rent. A provision in the legislation
permits landlords and tenants to reach a settlement on their own without the assistance of a mediator. This is a significant improvement since, previously, the difficulty in locating a mediator caused hearings to be adjourned due to lack of time, even if both parties had come to an agreement for repayment of the arrears or by formulating a repayment plan. Now, the landlord and the tenant only need to advise the adjudicator that they have reached a compromise. If the tenant doesn’t honour the repayment plan, the landlord could apply under s. 78 of the Residential Tenancies Act for an order to terminate the tenancy. “It’s one more way that the backlog can be reduced,” Hoffer said. “It gives landlords and tenants one more tool to dispose of an application without having to sit around waiting for the hearing and, after the hearing, wait for an order. You can do it all right there.” Given the severity of the backlog, Hoffer said the only action the Board can take is to continue hearing cases and then issue the orders more quickly. “There are a number of different avenues that are contributing to reducing the backlog but, at the end of the day, where you’re not able to resolve it by means other than a hearing, that will continue to be a struggle, both for the Board and for landlords,” Hoffer said.
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CFAA VIRTUAL CONFERENCE 2021 FEATURING: EDUCATION SESSIONS ON TODAY’S ISSUES
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PRESIDENT’S MESSAGE Welcome to 2021 and the hope of a much better year than 2020. As we look forward to the year ahead, there will be many new challenges we will face. From the large backlog of filings at the Tribunal to the freeze on guideline increases, the year ahead will again look to challenge the rental housing business no matter the size of the property or unit. Together we can push forward. To that end, your Executive team and Board of Directors are looking forward to enhancing your membership through various means. Our goal this year is to ensure our website is complete with new content (including past meetings), our member profiles (including our associate members) are up to date, and future events are available in advance of the meetings. I will discuss our goals for the year later in this article. As a result of the pandemic, we have had to move our member meetings to an online format using Zoom. To date, we have hosted four events that have been attended similarly to our in-person events and those numbers are growing. I encourage you to attend upcoming events from CHMC in February and in the future. The best part is you can log in from anywhere to catch the meeting. I would be remiss if I did not once again thank Andrew McCallum for his many years of service to WRAMA, both as a Board member and more recently as President. He worked tirelessly on behalf of members and apartment owners through his advocacy, hard work, and passion for the industry. I look forward to working with the Board of Directors to continue our goals for the association on your behalf. I encourage you to reach out with any questions or topics that you have questions or concerns about. Looking forward to “seeing” you at a future event.
- James Craig, President, WRAMA
Priorities of the Board Through several meetings with the Board of Directors as well as the Board executive, we have developed several priorities for 2021. You will see that many of our priorities focus on the members and how we interact with you. Our five key priorities are included below with a brief description.
Membership outreach and associate members Our Board team will reach out to you to ensure we have your correct contact information on file. This will allow us to update our records in Membee and ensure you are getting the most out of the functionality of our website. James Craig For associate members, we want to confirm we have your correct information, but we also want to make sure you are listed correctly in the directory. Within the directory, there is also the ability to offer special promotions to WRAMA members. This can be changed at any time depending on what you may want to offer and when.
Member survey We have done member surveys in the past; however, over time, the needs of members have certainly changed. Now that we have moved to a more digital footprint, it is our goal to determine what our members are looking for from the association and the type of content you want. This will likely be delivered in the next month or two.
Website enhancements Last year, we made the switch to Membee, which was an upgrade from the previous website. There is significant behind-the-scenes functionality that allows the association to better manage our files, handle membership renewals, and provide content to the members. Our goal over the next year is to provide more content on the site that will be helpful to members. Further, we want to ensure that members know how to use the site. If you have questions about the website, please do not hesitate to reach out to us.
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Strong advocacy with municipalities Over the past number of years, we have had a great working relationship with the local area municipalities and that remains a key focus for the Board. Our goal is to enhance these relationships to make sure WRAMA is a key stakeholder in any rental housing decisions that are being made.
Continuing our strong relationship with FRPO and CFAA WRAMA has always had a great relationship with the Federation of Rental Housing Providers (FRPO) and the Canadian Federation of Apartment Associations (CFAA). Our goal is to continue to support and enhance their efforts at the provincial and federal levels in all matters related to the rental housing industry.
Call to action – Volunteers needed! The success of any association is the strength of its volunteers, and volunteers include, but are not limited to, Directors. Recent Board meetings have revealed the need to extend volunteer opportunities to WRAMA members who want to do something to help our industry. Below are several areas where WRAMA is looking to have volunteers assist. I encourage you to reach out and let us know if any of these committees would be something you can help with. • Membership Committee (both associate and regular members): The goal of this committee is to ensure that member contact information is correct, providing an up-to-date new member package and renewal package. With respect to associate members, provide the tools necessary to reach members and roll out an advertising program. • Website Review Committee: The team would regularly review the website to ensure all links are working, and content is in the right location. The committee would also advise of additions or changes to the site as required. • Events Committee: The committee works to find speakers for future events and plans future events, such as trade shows. Our goal this year is to reach out to as many associate members as possible to provide them an opportunity to present to members. • Communications Committee: This committee would spearhead our efforts to provide relevant information to association members based on a helpful timeline. One goal of the committee is to provide smaller information packages, rather than one large monthly email. • City Advocacy Committee: We are looking to increase our efforts with the cities and create key contacts for each municipality in our association. The goal is to ensure we are at the table if there is an issue relative to the rental housing industry as a key stakeholder. If you have a relationship with a local city councillor or staff person, and think you can help WRAMA, please reach out to us.
January’s member event As mentioned in the President’s message, we have moved all events to an online format using Zoom. This format has allowed us to continue hosting events on timely topics affecting the industry. The format has changed slightly from in-person meetings in that meetings are now only an hour in length. Typically, the guest will speak for approximately 20 minutes and then we move to Q&A. We will also be continuing with our problem of the month, which will focus on the presenter’s subject. On January 13, we welcomed Kayla Andrade from Ontario Landlords Watch, who provided an overview of the top five things to watch for in 2021. Kayla touched on the eviction ban that had not
54 | January 2021
been enacted at the time. The ban allows for judgments and rulings to move forward; however, the Sherriff will not enforce the rulings until after the lockdown has been removed. Protests have occurred in many cities across Ontario in support of ending/stopping the eviction ban. The power of all of our voices, including our spheres of influence, can play a role in contacting the government about our concerns. The housing crisis affecting all Canadians is a major concern, and will need to be addressed by all stakeholders. The fear is many landlords are getting out of the business due to restrictions and slow application processing times at the Landlord and Tenant Board. This will lower the rental supply and make the situation worse. We want to address the issue of non-payment of rent and provide a better solution on how to address this. Kayla suggested following the proper process to evict a tenant, but taking a step further than the regulated process (payment plan, email thread of plan to rectify the arrears, etc.). Landlords can also provide additional resources and contacts where delinquent tenants can go for help (e.g., Lutherwood) or services that show the landlord is making an effort to truly assist with the problem. Kayla outlined some of the changes brought in by Bill 184, and how they can impact landlords. Key pieces are increased fines, duty counsel available to tenants, and hearing process changes. There was also a brief conversation about the Landlord Credit Bureau and how it is changing the rental industry. It is simplifying the process of keeping tenants in check with paying on time and keeping their credit score intact. Visit www.landlordcreditbureau.ca for more information. Thanks to Kayla for the work she does on behalf of landlords across Ontario.
February 2021 member meeting Registration will be open shortly for our next members meeting happening on February 10, 2021 at 7:00 pm. Joining us will be Jennifer Tso, Senior Analyst, Economic, at CMHC, who will provide an update on the Waterloo Region rental market. This is an annual event that WRAMA has held with CMHC for many years. I am looking forward to hearing from Jennifer on how the market has reacted to the COVID-19 pandemic and how the market indicators have responded as well. I hope to see you there.
Discover the benefits of being a member of our association The mission of the Waterloo Regional Apartment Association is to actively and positively develop and sustain the integrity of its members’ business – the provision of private residential rental accommodation – in Waterloo , Kitchener, Cambridge, Guelph and surrounding areas. To view the full range of valuable property managment resources we offer to our members, or to apply online go to http://wrama.com/, or contact WRAMA at 519-573-7109.
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O O ne n O e Vo ne M ic e e M s , ag sa az ge in , e! k in Th
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The official publication of:
Vol. 13 No. 6 January 2021
Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives
One year later - Conversations about COVID-19 and the rental housing industry
Personal perspective of how the pandemic has affected rental property owners
Chair’s message Like rental housing providers in other areas of Ontario, landlords in Ottawa are dealing with the Ontario eviction moratorium, the 2021 rent freeze, and government and Public Health directives about steps to take to reduce the risk of transmission of COVID-19. Ottawa landlords also face new City requirements coming into force in late August. All of these issues are addressed in this issue of EOLO – Regional Association Voice.
- John Dickie, EOLO Chair
The Ontario eviction moratorium Under its emergency powers, the Government of Ontario recently brought in an eviction moratorium. However, under the terms of the moratorium, the Landlord and Tenant Board (LTB) continues to hold hearings for all types of applications, and to issue orders, including orders for evictions. Most eviction orders cannot be enforced until the moratorium ends. However, if the LTB orders the eviction to be expedited, then the Court Enforcement Office (the “Sheriff”) can enforce the eviction order during the eviction moratorium. Section 84 of the Residential Tenancies Act (RTA) provides that the LTB must include such a request to the Sheriff in the order when the tenant is being evicted for certain types of very serious bad conduct, and the adjudicator has not delayed the enforcement date pursuant to section 83(1)(b) of the RTA. The grounds for eviction in section 84 are: • Willfully damaging the rental unit • Using the unit in a way which is inconsistent with residential use, and that caused, or is likely to cause, significant damage • Committing an illegal act in the unit involving the production or trafficking of illegal drugs • Seriously impairing someone’s safety • Substantially interfering with the landlord’s reasonable enjoyment --- in cases where the landlord and tenant live in the same building and the building has three or fewer residential units
When an application is for a ground of termination for which an expedited eviction is to be granted, as listed above, the applicant can and should request an expedited hearing when filing their application. In that case, the request only needs to state the ground and refer to section 84. For other grounds that justify an expedited eviction, the applicant can also request an expedited hearing. In that case, the key facts that drive the request should be stated in the request. If a landlord believes that an eviction order should include a request to the Sheriff to expedite enforcement, the landlord may raise that issue during the hearing. The adjudicator may consider whether the tenant is responsible for an urgent problem such as a serious and ongoing health or safety issue at the residential complex, or a serious illegal act that occurred at the residential complex other than drug dealing. If present at the hearing, the tenant will have the opportunity to make submissions on the issue. Landlords should not make the request for an expedited hearing for situations outside section 84 without having a good case for the urgency of the proceeding. Considering the requests takes up LTB resources, and making unjustified requests will give a representative or a landlord a bad name at the LTB, as well as risking tighter rules that will make life more difficult for all landlords.
Eviction issues going forward According to the government, the eviction moratorium will last only as long as the state of emergency continues, and no longer. The
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moratorium might even be over by the time you read this. However, the government could change its mind, or could impose another state of emergency. Check the LTB website for the latest information. The ability to seek an expedited hearing, and an expedited eviction order, is particularly important during the current eviction moratorium, since they allow an eviction to go ahead during the moratorium to protect people’s safety. Even after the moratorium ends, the processes will be valuable because they allow a necessary eviction to go ahead more quickly. That is especially important while the LTB is still backlogged, but it will remain important even once the backlog is cleared.
2021 rent freeze and AGI increases In September 2020, Premier Ford brought in a residential rent freeze for 2021. Just as with the eviction moratorium, there are nuances to the rent freeze. It is not a strict rent freeze for every landlord. Landlords who have an order, or have applied for an order, allowing above-guideline increases (AGIs) can still take those AGIs. The guideline has been set at zero, but AGIs are by definition “above the guideline.” That is fair, since AGI increases are to recover specific costs landlords have incurred to improve the rental building. Many landlords are likely to take a rent increase on January 1, 2022. Under the current rules, they are entitled to do that. No rule requires a rent increase every 12 months. The rule in the RTA is that rent increases must be at least 12 months apart. That means any landlord who does not take a rent increase between January 1 and December 31, 2021 can take an increase on January 1, 2022. If a landlord wants to take an AGI increase, there are strict timelines to keep in mind. Capital expenditures will only be eligible for an AGI if an application is filed within 18 months of its completion. For instance, if a capital expenditure project was completed in October 2019, the landlord would likely need to file the AGI application by the end of March 2021 (for a first effective date of rent increases commencing July 1, 2021), failing which the landlord would lose the ability to pass through the costs by means of an AGI. If filing for an AGI application with a first effective date of July 1, 2021, it is important that at least one notice of rent increase above the guideline be given to a tenant for July 1, 2021. However, landlords are entitled to delay giving other tenants in the complex rent increases until early 2022, when they can combine the AGI increase with a 2022 guideline rent increase. Landlords should seek advice about how best to manage the deferral of rent increases, and when and how they need to make AGI applications.
COVID-19 operating impacts and requirements In the City of Ottawa, landlords with common areas are required to post a notice requiring the wearing of a mask in building common areas. Ottawa Public Health provides a printable notice. As well, landlords with common areas are required to provide hand sanitizer (or hand rub) at all building entrances. There are various ways to do that, varying from putting out a bottle of hand sanitizer, or taping a bottle of hand sanitizer to the wall of an entrance lobby, to installing a dispenser operated by hand or foot, which dispenses the amount needed for one person’s hands. The rules about other information that needs to be posted in the building are constantly changing. Check the EOLO website at www.EOLO.ca for further information on the rules that apply when you read this article.
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Financial relief for tenants Tenants who are not paying their rent may have a legitimate income problem, especially under the state of emergency. Not everyone can work from home, and not all people who cannot work from home are essential workers who can work at their usual workplaces. Landlords may want to make sure that those tenants know about the resources available to them. For financial relief from the federal government, search “Canada COVID-19 relief” and then choose individuals. For relief from the City of Ottawa, the key contact number is 3-1-1, or you can search “City of Ottawa essential health and social service.” Tenants do not need to be on social assistance to get help with their rent (or rent arrears) from the City.
New City by-law requirements coming in August Rental housing providers in Ottawa should remember that the City will be bringing new requirements into effect on August 31, 2021. They include: • Standards for tenant services (repair timelines and procedures) • An information package for tenants, including contact information, waste handling rules, and parking rules • An assistance registry • A capital maintenance plan (for buildings with 10 or more units, or three or more floors, with more than one unit) • An Integrated Pest Management (IPM) approach to pest management EOLO will provide our members with more information on these new requirements. Developers with new buildings coming up for rent over the next six months may want to prepare the tenant information package before they lease up, so that they can give the package to tenants when they lease units, rather than having to chase tenants for a signature acknowledging receipt of the package after they move in.
New CMHC mortgage rule impacts borrowing for capex On May 28, 2020, CMHC brought in a new use of funds rule for insured upward re-financings. Rental housing owners are not allowed to increase CMHC-insured borrowing to take out equity. This will negatively impact rental owners if they inject equity to pay for a major repair or renovation, planning to take that money back out at the next insured re-financing. That used to work fine, but it doesn’t work anymore. In order to finance major repairs or renovations with insured funds, a rental provider needs to borrow money to pay for them. Then the loan can be paid off with insured funds. Or if the timing works, the insured re-financing proceeds can be used directly to pay for the work, or put aside to pay for the work.
BECOME AN EOLO MEMBER NOW! EOLO invites Ottawa area landlords to join the organization. Have your interests and concerns heard, and benefit from EOLO’s support. As an EOLO member, you will be able to: • Receive
prompt emails of relevant City rule changes
two networking receptions a year
two free education events a year
Receive all 6 annual issues of RHB Magazine with current developments, City and provincial funding programs, and landlord-tenant laws.
To apply for membership, go to www.eolo.ca, download the membership application form and send it to us at the contact info on that website.
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Final Take Away
Brought to you by Yardi Canada Ltd
Where real estate is taking us: Post-pandemic business strategies Peter Altobelli, Vice President, Yardi Canada LTD.
The pandemic may still be with us, but it certainly hasn’t defeated us. In fact, if we take an objective look at the rental housing market today, there are plenty of opportunities for growth and success. First, let’s look at certain factors driving the sector and then we’ll explore business strategies that leverage today’s trends to help property managers attract and retain the right residents for their communities.
Residential market trends and challenges Energy-dependent markets and high-end units will be the most impacted post-COVID-19, but rental housing remains competitive. As per the fall 2020 Canadian Multifamily in the Post-Pandemic Era Client Survey & Update to Sector Outlook conducted by CBRE Research: • Overall vacancy rate impact ranged from 1-2% and, in some cities like Toronto, have even reached a 50-year high of 5.7% (according to Urbanation) • Over 60% of landlords surveyed have positive outlooks toward rent collection rates in 2021 • 60% of respondents revealed that asking rents either held or increased in 2020 • Immigration freeze minimally impacted the rental industry; even a 50% reduction in Canada’s immigration total from 2019 exceeds the number of new residents admitted annually from 2000 to 2015 Despite the impacts on vacancy, rent collection rates, and immigration, the residential real estate sector is still well-positioned for the post-COVID-19 era as vaccines roll out. The real shift in the industry has been on renters’ expectations and the organizational transformation to work from home and social distancing policies. Though this was incited by the pandemic, some aspects of these trends will be a lasting change in the sector. How can you be prepared to provide excellent services in the post-pandemic era? By developing the right strategies now to effectively engage your residents and adapt your organization to the future of workplace culture.
Three strategies for post-pandemic property management You can’t control the market, but you have a lot of control over how you find and retain qualified renters. The best
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change you can make is to adopt a modern property management software platform. The latest tech helps streamline resident services, increase mobility, and maintain security. 1. Expand engagement with tenants Effective communication played a crucial role in property management in 2020 and this elevated resident expectations on access to, and communication with, their property manager. Self-service portals put residents in control of their renting experience, letting them make payments and submit maintenance requests in a simple, contact-free manner. 2. Work from anywhere The pandemic has taught the world that many industries can transfer their workforce to function remotely. The phrase “mobile-friendly” has become a prerequisite today and this trend is not going away. You should be able to process invoices, manage vendor relations, send financial reports, update property listings, send texts and emails, and more, all on the same platform, no matter where you are. The year 2020 showed us that those best prepared to deal with the challenges of remote work are those who adapted and updated their tech early. 3. Data security & control To run your business efficiently, you need to know your data is secure, and the real estate industry is a keeper of sensitive information that needs to be protected: electronic bill payments (both incoming and outgoing), applications by prospective renters, screening results, etc. Take care of your tenants, owners, and staff by ensuring the security of their information against hackers and data leaks.
What’s next? In 2021, streamlining your technology is key for real estate success. We hope this article helps you understand the changes technology are bringing to our industry and how the right tech can positively impact your business. Now it’s up to you to explore property management software and see which solution best positions you to take on the evolving landscape.
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