Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives
Vol. 12 No. 4 Sept-Oct 2019
The official publication of:
Federal election primer A federal election will soon be upon us. Make sure that you’re informed to make the most appropriate choice on election day.
Fall’s here don’t get left out in the cold
Prepare your rental property for winter before the snow and cold arrive.
Recreational cannabis one year later
Know your rights as a landlord with respect to recreational cannabis use in your building.
How do you increase marketing ROI? Attract more prospects, convert more leads and retain more residents with the RENTCafĂŠ Suite, a powerful marketing, leasing and resident services platform with innovative property marketing features, automated lead tracking and management tools, contact center resources and advanced search marketing services.
A single connected solution for multifamily marketing management
888.569.2734 Yardi.com/Marketing ÂŠ2019 Yardi Systems, Inc. All Rights Reserved. Yardi, the Yardi logo, and all Yardi product names are trademarks of Yardi Systems, Inc.
Project Management | Building Science | Structural Engineering | Roofing Surveys | Condition Assessments | Asbestos and Mould Surveys
McIntoshPerry.com Weâ€™ve encountered every possible building-related issue over our five decades of history. With more than 500 engineers, project managers and technical experts across the country, we provide a full range of services to the rental housing industry.
rentalhousingbusiness.ca | 3
EDITOR’S NOTES Back to school, back to work? My daughter started grade 4, and my wife returned to work with the start of a new school year. However, both might be returning home for some period of time with the possibility of a work-torule or a strike among teachers and support staff. I’m hoping that it does not come to this, as I want my daughter to learn, and my wife to earn a fair income. I’m also turning 50 around the time this issue goes to press, which is a huge milestone, and I’d rather everyone be in good spirits when we celebrate this day with my family. The September/October issue of RHB Magazine features an election primer, as the federal election will be taking place just after we go to press. We interviewed John Dickie, President of CFAA, to explain the association’s take on the federal parties’ platforms with respect to issues that affect the rental housing industry. We also conducted a federal party Q&A, and looked back at the Liberals’ 2015 platform with respect to how they have done over the last four years. With winter around the corner, we contacted several industry professionals on some best practices for preparing rental properties in the fall to protect against winter-related issues. The article covers parking lots and structures, the building envelope, and HVAC systems. We also take a look at the impact of legalizing recreational cannabis one year later, examining the differences with medicinal cannabis, how landlords can enforce legislation and discussing how they can create a smoke-free building for tenants. Make sure to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. And see what CBRE wrote about the relative cost of rental housing in three major Canadian cities as compared to the rest of the world in the Suite Count section. Of course, we always enjoy hearing from our readers, and we want to support two-way communication. If you have any comments or questions, send them to email@example.com. I look forward to hearing from you.
Marc Côté firstname.lastname@example.org
Juan Malvestitti email@example.com
David Gargaro firstname.lastname@example.org
John Dickie, President CFAA email@example.com
Art Director Kyu Shim
Director of National Sales Nishant Rai
Office Manager Geeta Lokhram
One year $49.99 Cdn Two years $79.99 Cdn Single copy sales $9.99 Cdn Opinions expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the CFAA Board or management. CFAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher. P.O. Box 696, Maple, ON L6A 1S7 416-236-7473
Enjoy the issue! David Gargaro Senior Editor
4 | September - October 2019
Produced in Canada All contents copyright © RHB Inc. Canadian Publications Mail Product Sales Agreement No. 42652516
What makes this compactor smart?
iSMART technology sends alerts and provides compactor diagnostics in real time. With the data it collects, weâ€™ll reduce your service calls, limit downtime and save you money. If you want to optimize your waste stream, call us at: 416 743 8484 ext. 2
rentalhousingbusiness.ca | 5
VOL.12 NO.4 2019
Recreational cannabis one year later Know the difference between recreational and medicinal cannabis, and learn about your rights as a landlord.
RHB’s forum for rental housing associations to share news, events and industry information
Federal election primer Make your vote matter A federal election will soon be upon us. Make sure that
Hot Topics: HDAA discusses the government’s involvement in housing matters, and provides an update on licencing in Hamilton. pg. 45 LPMA discusses preparing rental properties for the winter. pg. 49 WRAMA recaps the topics and issues covered at its most recent meeting, including fire and water damage, recent sales, and student housing. pg. 53 EOLO discusses the City of Ottawa’s decision to choose between landlord licensing and enhanced by-law enforcement. pg. 57
you’re informed to make the most appropriate choice on election day.
The Member Associations
Regional Association Voice Regional Association Voice features the latest industry news from four member associations.
Fall’s here - don’t get left out in the cold Prepare your rental property for winter before the snow and cold arrive.
6 | September - October 2019
Suite Count Rents in major Canadian cities compare favourably to their global counterparts.
ASPHALT PAVING CONCRETE PAVING LANDSCAPE CONSTRUCTION BUILDING RESTORATION WINTER SNOW SERVICES INTERLOCKING STONE SITE SERVICING
diversified construction 24 hour emergency service 416.524.3000 Email: firstname.lastname@example.org
rentalhousingbusiness.ca | 7
PRESIDENT’S CORNER This issue of RHB Magazine focuses on the upcoming federal election, to take place on Monday, October 21. Read the RHB interview with me about the political parties’ campaign promises on tax, housing and energy, some good and some bad. Visit www.cfaa-fcapi.org for the most up-todate election information. The Liberal and Conservative full platforms had not been released when this magazine went to print. (A number of important promises had been made, and the past behaviour of those two main parties also helped to inform the interview.) As well as updates, CFAA’s website also offers CFAA’s goals for this election, and information about signage and allowing entry for candidates and canvassers into rental property. In National Outlook, see the detailed comparison of the income taxes the parties would demand that landlords pay on their ordinary (and rental) income and on capital gains. Both the NDP and the Green Party want to raise the capital gains inclusion rate, which would be devastating for rental housing.
National Apartment Association in the U.S. Canadian rental housing providers can access Visto, the NAA’s on-line training courses, at the same price as NAA members. For more information, email email@example.com. CFAA has also made an agreement with Home Depot to facilitate access to Home Depot’s volume discounts and other perks. In turn, Home Depot is supporting CFAA in our work for the rental housing industry. Sign up at homedepot.ca/proxtra, and send your Pro Xtra number to firstname.lastname@example.org, and you will support CFAA’s work on behalf of rental housing providers across Canada. Finally, save the dates June 8 to 10 for CFAA - Rental Housing Conference 2020, which will take place in Halifax, Nova Scotia. We hope to see you there!
Also in National Outlook, see a report on the new goal CMHC has set, and on a Housing Conference CMHC held. Many for-profit rental housing providers would take issue with many of the ideas and “facts” the invited speakers put forward. As well, see the information at page 41, which invites rental housing providers to join CFAA as direct landlord members to enable our industry to meet the upcoming government relations and public relations challenges. Besides government relations, CFAA works hard to increase knowledge within the rental housing industry. As part of that mandate, we have entered into an agreement with the
8 | September - October 2019
John Dickie, CFAA President
VISIT OUR NEWLY RENOVATED APPLIANCE SHOWROOM Huge selection of High End Appliances Appliances showcased in beautiful “Live” Kitchen Displays Commercial Pricing Nation-Wide Delivery Service
New “In-Store” Appliance Clearance Area AT BLOWOUT PRICES Reward Yourself - Ask about how you can earn Brick dollars for your referrals
OUR BENEFITS Commercial & Hospitality Pricing Easy, One-Stop Shopping Distribution Across Canada Extended Warranty & Repair Services Industry Leading Brands
PLEASE CONTACT THE BRICK COMMERCIAL 4250 DUFFERIN STREET (Dufferin St. and Steeprock Drive)
Willy Gnat Phone: 416-635-4832 Email: email@example.com
rentalhousingbusiness.ca | 9
In this issue of... NATIONAL OUTLOOK 35. CMHC held a two day Housing Conference in November 2018. Most for-profit rental housing providers would not agree with numerous facts and ideas presented. Read key Conference points and counter-points.
38. The Canadian Federal Election is coming up on October 21. CFAA sets out the impact of the income tax changes proposed by the various parties, affecting both regular income and capital gains.
41. If you’ve read the previous two National Outlook articles, you should know that impending political and public relations challenges suggest that rental housing providers should join CFAA as direct members. Here’s how to join.
To subscribe to CFAA’s e-Newsletter, please send your email address to firstname.lastname@example.org.
The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $480 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.
10 | September - October 2019
CFAA Member Associations Eastern Ontario Landlord Organization (EOLO) www.eolo.ca P: 613-235-9792 Federation of Rental-housing Providers of Ontario (FRPO) www.frpo.org P: 416-385-1100, 1-877-688-1960 Greater Toronto Apartment Association (GTAA) www.gtaaonline.com P: 416-385-3435 Hamilton & District Apartment Association (HDAA) www.hamiltonapartmentassociation.ca P: 905-632-4435 Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572 LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604-733-9440 Victoria Office P: 250-382-6324 London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999 Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560 Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703
Are you an affordable housing provider in our Ontario service area?
Keep your Affordable Housing Affordable. Looking to cut your operating costs? Lower energy use and improve resident comfort by upgrading your building's equipment.
With up to
$200,000 in available incentives
Here are some of the measures we support: • High Efficiency Boilers • Make-Up Air Units • Water Heaters • Heat Reflector Panels • Low-Flow Showerheads • Control Upgrades • Heat Recovery Ventilators
Let’s get started. There are solutions and retrofit rewards for all budgets. For more information, contact: Cam Black, Enbridge Energy Solutions Consultant email@example.com (416) 758-4748
rentalhousingbusiness.ca | 11
ST E H G I H 6 TOP Y L H T N O M E G A R E V A E C N I V O R P Y B S T N RE
A I B M U L O C H S I T I R B
A I T O C S A NOV
3 4 5 6 12 | March 2019
ALBERTA A B O T I N A M N A W E H C T SASK A
$1,766 $1,458 $1,315 $1,266 $1,138 $1,136
for Fall Maintenance Products
rentalhousingbusiness.ca | 13
Federal election primer – Make your vote matter A federal election will soon be upon us, and RHB Magazine
wants our readers to be informed so that you can make the most appropriate choice on election day. We are not taking sides in this election – we want to publish the facts and allow our readers to decide what is important to them. We conducted interviews and researched the main federal parties’ election platforms to find out where they stand on issues that matter to the rental housing industry. 14 | September - October 2019
Q&A with John Dickie RHB Magazine interviewed John Dickie, President of the Canadian Federation of Apartment Associations, on what the main federal political parties are promising for the current election, as well as what the association would like to see from the parties, if they form the federal government. RHB: What are Canadaâ€™s political parties promising with respect to income taxes? John Dickie: As of September 26, here are some
platform commitments. The NDP has said they will raise the federal income tax rate on incomes over $210,000 from 33 per cent to 35 per cent. They have also stated that they plan to increase the taxes on capital gains by raising the capital gains inclusion rate from 50 per cent to 75 per cent. That would be devastating, especially since much of the capital gain on rental housing is just making up for inflation. Several years ago, the general federal corporate tax rate was reduced from 18 per cent to 15 cent. The Greens promise to raise it to 21 per cent.
rentalhousingbusiness.ca | 15
“CFAA spoke to the Liberals, the Conservatives, and the NDP about improving the tax treatment of energy retrofits to ensure they can be claimed as current repairs rather than capital items.” As many readers know, early in their mandate, the Liberals raised the income tax rate on the top bracket from 29 per cent to 33 per cent. They are not suggesting raising it any more. They have also reduced the federal tax rate on middle incomes from 22 per cent to 20.5 per cent. While they have not said so explicitly, the Conservatives might reduce that top income tax rate, and would likely hold the line on corporate taxes and capital gains taxes. CFAA spoke to the Liberals, the Conservatives, and the NDP about improving the tax treatment of energy retrofits to ensure they can be claimed as current repairs rather than capital items. The Liberals and the Conservatives seemed favourably disposed toward that idea. The Greens might be as well. RHB: What do the federal parties’ platforms include on the subject of housing? John Dickie: The Liberals have already brought in the National Housing Strategy. It includes substantial low interest loans for new for-profit rental construction with an affordability component. Many developers are taking up that incentive. The Liberals are also funding social housing repairs and new social housing, and are rolling out portable housing benefits with the provinces. To make home ownership more accessible, they have promised to increase the number of homes for which first-time home buyers can use the new First Time Home Buyers Incentive in expensive markets by increasing the value limit to almost $800,000 in those markets.
16 | September - October 2019
The Conservatives have promised to facilitate first-time home ownership by reworking the stress test, considering 30-year mortgage terms and working with the provinces to remove barriers to new home construction. All of those measures would also help renters by reducing the excess pressure on rental markets, which has resulted from young families being priced out of expensive markets and renting longer. For that reason, most rental providers support measures to facilitate new home ownership at this time, but not over the long term. The NDP are promising much more emphasis on providing more subsidized social and cooperative housing. The Greens are promising to reduce government encouragement to home ownership, and to restore tax incentives for building purpose-built rental housing. The Greens are also promising an increase in the funding for portable housing benefits and a “guaranteed livable income.” The Liberals moved in that direction with the Canada Child Benefit and the increase in the Guaranteed Income Supplement. Landlords support adequate income support for low-income people. RHB: Where do the federal parties stand on energy and climate change? John Dickie: The Liberals are levying a federal carbon tax in provinces that do not already levy a carbon tax, returning 90 per cent of the money to consumers, with 10 per cent to some entities, with no special consideration for rental providers, who pay the carbon tax.
LOW-RISE TO HIGH-RISE and everything in between
COMMERCIAL INDUSTRY LEADER FOR OVER 35 YEARS DISTRIBUTION SERVICES & SHOWROOMS ACROSS ONTARIO
https://www.appliancecanada.com/builders/ CONTACT: ADAM ZARETSKY 905-761-2471 firstname.lastname@example.org rentalhousingbusiness.ca | 17
“The different parties see the world differently, and have different philosophies about government and who they most want to serve.” The Conservatives have promised to abolish the federal carbon tax, and instead to place limits on carbon emissions by large emitters. The NDP would continue the Liberals’ current measures, while moving to carbon-free electricity generation by 2030. The Greens would also phase out coal-fired electricity, and mandate energy retrofits for all buildings by 2030. Mandatory energy retrofits raise concerns for landlords, who have already invested billions of dollars in energy efficiency upgrades. RHB: As an advocate for fair treatment of rental housing providers across Canada, what would you seek from each party? John Dickie: The different parties see the world differently, and have different philosophies about government and who they most want to serve. Therefore, what CFAA seeks from each party is different. The Liberals want to act on housing needs, and CFAA seeks to shift their focus toward portable housing benefits, which preserve tenants’ autonomy and choice, and support the private rental market rather than undercutting it. We also seek tax changes to make investment in rental housing more attractive. We would also want the Liberals to resist demands for even more social housing than is in the National Housing Strategy now because that additional social housing would provide little benefit at enormous cost.
18 | September - October 2019
In the past, the Conservatives have shown less interest in taking direct action on housing, and especially social housing, and have expressed more interest in income support measures or tax reductions. CFAA would seek those measures, so that lowincome households would receive support within a disciplined fiscal environment. The NDP have too much faith in the value of social housing, and too little appreciation for the value private rental markets provide for Canadian households. CFAA would work to raise their understanding of the advantages of portable housing benefits, for renters, governments, and taxpayers. CFAA would also resist tax increases. RHB: Housing is primarily a matter of provincial jurisdiction. How does that affect what rental housing providers want from the federal government? John Dickie: The federal government has a lot of power over income taxes and the GST/HST. Those are key areas for landlords, both for ongoing rental operations and for new rental construction. On housing, the federal government can choose to spend money or not to spend money, and what to spend it on. Therefore, encouraging the federal government to support portable housing benefits is advantageous. It is also useful to encourage the federal government to focus its programs on spending that reduces costs for the private rental sector, such as incentives for energy retrofits.
CONTINUED ON PAGE 22
Building Science | Structural 25+ YEARS MULTI-RESIDENTIAL EXPERIENCE •
Repair, Restoration, and Renewal
Design, Specifications, Project Management
Property Condition Assessments
Contact our Multi-Residential Team Today! (800) 838-8183
Looking back to 2015 RHB Magazine looked back at the Liberals’ 2015 federal election platform to see what Justin Trudeau and the federal Liberals have accomplished over the last four years. We used the website TrudeauMeter.polimeter. org, a “a non-partisan collaborative citizen initiative that tracks his performance with regards to his electoral platform,” to evaluate the Liberal platform on some key issues.
• Cut the middle income tax bracket to 20.5% (from 22%) – ACHIEVED
• Cancel family income splitting – ACHIEVED • Introduce a new Canada Child Benefit which will be tax-free, tied to income, and delivered monthly – ACHIEVED
Investments According to the aforementioned website, of the 231 election promises: • 27 have not been started • 50 are in progress • 108 have been achieved • 46 have been broken Some of the 2015 promises are listed below:
• Give communities the money they need for Housing First initiatives that help homeless Canadians find stable housing – NOT STARTED (CFAA reports that the Housing First initiative is in progress.) • Prioritize investments in affordable housing and seniors’ facilities by building more units and refurbishing old ones – IN PROGRESS • Remove GST on new capital investments in affordable rental housing – BROKEN
20 | March 2019
• Invest $20 billion more in social infrastructure over next ten years – IN PROGRESS • Invest $6 billion more in green infrastructure over next four years – BROKEN • Make the New Building Canada Fund more focused on providing investments in public transit, social infrastructure, and green infrastructure – IN PROGRESS
• Create a new Low Carbon Economy Trust – ACHIEVED • Review Canada’s environmental assessment processes and introduce new and fair processes – IN PROGRESS
ER T I N S R EZ É I NS
WE’VE GOT YOU COVERED! ! ne! ine onl en lig t us us Visi ez-no om c . t tic Visi ma
ed mag r da ment . no ole eplace ndable t s r u st, -ref t to s lo ard subjec is non om c . C d La ash ct are rt car undry. c e nt. a k yla sm pta si la egle d li car e or n to this or fixm com ursée ur s t i n s le on ge bo t th al u 972 l’ar s rem . La va trea norm loaded -561-1 de a e b e. ase 0 me abl ra p agé Ple ough a value 1-80 com ne se domm bours m e t thr s. The tions? o ar carte u en n-rem rie.c o te c rge Ques cet cette truite est no uande cha r ter é e sb trai aire su ole, d à puc ou so z e t v l e é t il , 72 Veu r mon erdue te car 61-19 t 5 u p e e t l 0 c 0 va te es sur 1-8 car hargé ions? c st Que
They’ll love their payment options. Ask us today about our coin, laundry card, and mobile payments options for your laundry facility. 1-877-755-5302 | www.coinamatic.com
rentalhousingbusiness.ca | 21
“Too many young people today can’t even imagine buying a home today just like their parents did.” The federal government also has a substantial impact on rental demand, through its control of immigration, and through CMHC’s impact on access to home ownership. Rental providers are certainly happy with rental markets with good demand, but too much excess demand leads to unhappy tenants, and that in turn can lead to counter-productive policy choices. Rental providers want enough choice in the rental market so that renters can move when they change jobs, and so that landlords can reposition buildings when there is more demand for higher end housing options. Enabling tenant mobility and labour force attachment is also good public policy.
Federal party Q&A RHB Magazine sent questions related to rental housing to the four major federal political parties. At the time that this issue went to print, only the Liberals representative responded to the questions. RHB: If it forms the government after October 21, what steps would your party take to increase rental housing supply, or to assist with the renewal of existing privately-owned rental housing stock on an affordable basis? Liberal: Through investments we have made as part of the National Housing Strategy, nearly 42,000 units of affordable rent-assisted housing have or are being built since 2015. More than 100,000 will be built over the rest of the strategy, and the new Canada Housing Benefit will provide $2,500 in rental assistance to 300,000 Canadian renters who today are struggling to get ahead. In addition, as a result of investments made
22 | September - October 2019
over several Budgets, we have invested $10 billion into the rental construction housing initiative which will build 40,000 units of rental housing targeted at young professionals and those working to join the middle class. RHB: Housing affordability is a key issue in many areas of Canada. What are your party’s plans to make housing more affordable? Liberal: Too many young people today can’t even imagine buying a home today just like their parents did. We are making the current BC non-resident, non-Canadian tax for housing a national program. So a modest 1 per cent tax will be levied annually on those properties that are being used solely for investments to reduce speculation. This WILL NOT affect any non-resident Canadian with investments in Canada or any Canadian in one part of the country with a second home in another. The first-time homebuyers incentive provides up to 10 per cent off the purchase price of their first home. But even with that, we knew that in high-price markets like the Greater Toronto, Vancouver, and Victoria areas, foreign speculation has still put that first-time purchase beyond reach. So, we have committed to making the first-time homebuyers incentive more widely available in those markets. This means that first-time buyers could qualify for this incentive for homes costing almost $800,000. The national program for markets elsewhere remains in place. These are strong measures for first-time home buyers, affordability, and for the stability of our markets. The first-time home buyers incentive is an innovative solution that focuses on equity rather than debt solutions for the first time buyer. For the latest updates on the federal parties’ platforms, please visit www.cfaa-fcapi.org.
Call your iron railing specialists today! We specialize in: Roof Top Guard Rails | Wall Mounted Access Ladders Stairwell Railings & Handrails | Iron Gates & Fencing Balcony Guard Rails Exterior Railings | On-site Welding
Serving the GTA since 1972!
Dufferin Iron & Railings is committed to serving our customersâ€™ needs. Our trade skills and years of experience enable us to produce high quality products delivered in a timely fashion. Our clients choose us because of our reputation for quality, excellent service, and competitive pricing. www.dufferiniron.com
Fall’s here – Don’t get left out in the cold Now that fall has arrived, it’s time to start preparing your rental property
for the winter. It seems that winter storms are becoming more destructive every year. Every landlord and property manager should be doing what needs to be done to protect against building and property damage for extremely cold temperatures, high winds, heavy snow and ice build-up, and other hazards associated with harsh winter weather. Spending the time, energy, and resources to prepare your rental property in the fall can mean cost savings down the road, and extending the life of your building and its components. RHB Magazine contacted several industry professionals on some of the best practices for protecting rental properties against winter-related weather issues.
Parking lots and underground parking structures Canadian winters can do a serious number on asphalt and concrete surfaces, especially parking lots and garages. Freeze-thaw cycles and excessive salting can create massive potholes, walking and driving hazards, and structural damage. Preventive maintenance can save money for building owners, and protect tenants’ vehicles from unnecessary damage. Anthony Taylor, Director of Sales, Lincoln Construction Group, provided key strategies for maintaining parking lots and underground parking structures. 1. Patch and repair potholes. By tending to potholes before the winter, you can mitigate the chances of ice patches and trip hazards for your property’s employees, tenants, and guests. 2. Seal and crack fill. Sealing cracks will reduce your parking lot foundation’s exposure to the elements. The freezing and thawing temperatures allow the water that seeps through the cracks to erode your foundation, which can result in potholes. 3. Hire a reputable snow removal contractor. Finding a reliable snow removal company can make all the difference during our Canadian winters. Clear and hazard-free
24 | September - October 2019
properties can see the benefits of increased safety for your guests, productivity, and minimized accident risks.
Building envelope The building envelope has to stand up to all types of weather all year long. Snow, ice, and wind can have a cumulative effect on many different building components, some of which cannot be seen on the surface. Doing a thorough check of these elements in the fall, and following key maintenance strategies, can protect against short- and long-term winterrelated damage. Dave Moore, Project Principal, Vice President, Pretium Engineering Inc., provided a number of key strategies for protecting and maintaining different parts of the building envelope.
Foundation walls: 1. Fix the grading around the foundation. Raise the height of the grading around the foundation walls where settled to promote drainage away from the building, and reduce the risk of leakage and deterioration. 2. Check roof downpipes/troughs. Make sure that they are clear, connected, and directing water away from the building. 3. Apply de-icing chemicals. Use urea or calcium magnesium acetate de-icing chemicals; avoid use of calcium and sodium chlorides, which can accelerate deterioration of concrete and masonry at grade level.
7/5 YEAR LIMITED WARRANTY ON MHN33PD HIGH EFFECIENCY FRONT LOAD WASHER 5-YEAR LIMITED WARRANTY ON ALL OTHER MODELS, ALL PARTS COVERED Visit our website for complete warranty details
Charity Golf Classic Raises
for Interval House 2019 Golf Tournament held at Rattlesnake Point Golf Club on July 22nd
Interval House As the first centre for abused women and children in Canada, Interval House is a leader in the campaign for womenâ€™s empowerment, providing innovative specialized services that help abused women and their children transform their lives and break the cycle of violence. Interval Houseâ€™s holistic approach provides a continuum of services from crisis intervention to re-integration into the workforce and community, giving women and children the chance to rebuild their lives. For more information visit www.intervalhouse.ca
Platinum Event Sponsors
FRPO FRPO is the largest association in Ontario representing those who own, manage, build and finance residential rental properties. Our membership includes a diverse group of owners and managers, from those with one small building or a single rental unit, up to the largest property management firms and institutional owners and managers. The association also includes our colleagues and partners in industry, including service providers, suppliers, and industry consultants. With more than 2200 members in every area of Ontario, and with over 350,000 homes, we represent the full spectrum of the industry in Ontario. For more information please visit www.frpo.org
CMLS Financial Demtroys Technology Greenwin McIntosh Perry Midnorthern Appliance Multitech 2000 Contracting NorthEdge Properties Sifton Properties Sparkle Solutions
Media Partner RHB Magazine
Chocolate Sponsor Pretium Anderson
Water Bottle Sponsor Ace Group of Companies
to our event sponsors
Ice Cream Sponsor ECNG
All Professional Trades
$1000 Hole Sponsors
Lincoln Construction Group Sky Contracting
Driving Range Sponsor Aird & Berlis H&S Building Supplies KG Group Solid General Contracting
Roma Building Restoration
Exterior walls: 1. Prepare air conditioning units. Properly winterize through-the-wall air conditioner sleeves with insulation and air sealing measures, and remove air conditioner units from windows. 2. Identify signs of deterioration. Look for wetting patterns, efflorescence (salt deposits), and deterioration below the corners of metal window sill flashings; install drip deflectors at ends of window sills to promote water flow over sills. 3. Install metal drip flashings. Place them over brick window sills and at top of masonry walls without flashings.
Windows and doors: 1. Examine weather stripping. Regularly replace worn and damaged weather stripping at door and operable window perimeters to control air leakage and drafts. 2. Check all vents. Ensure that supply heating vents are open and clear of obstruction so warm air can flow over window and door surfaces to reduce condensation during cold temperatures. 3. Check windows and doors. Avoid leaving windows and doors open during cold weather; use other means of ventilation (i.e., kitchen and bathroom exhaust fans) when an apartment does not have an automatic mechanical ventilation system.
Flat roofs: 1. Remove debris & vegetation at roof drains. Remove debris at the level of the waterproofing membrane. 2. Check roofing system. Have a qualified contractor and/or consultant assess the condition of the roofing system every year or two. 3. Maintain warranty. If the roof has recently been replaced, ensure regular warranty inspections are performed to maintain warranty.
Sloped roofs and attic spaces: 1. Check level of insulation. Consider adding to existing thickness of insulation.
28 | September - October 2019
2. Examine all venting. Check that adequate venting at soffit and roof vents is provided and that soffit baffles are not blocked by insulation. Proper venting will extend life of asphalt shingles and reduce risk of ice damming. 3. Add downpipe extensions. Install downpipe extensions from upper to lower roofs to avoid accelerated shingle deterioration from increased water runoff and ice damage.
Heating, ventilation, and cooling Your building’s HVAC systems are essential for keeping tenants warm and comfortable during the winter. They are expensive to replace, and an unexpected breakdown can have serious repercussions. Staying on top of HVAC maintenance will ensure that they function properly and last as long as possible, while keeping maintenance and replacement costs in check. Ed Porasz, P.Eng., President, M&E Engineering, provided basic strategies for preparing and protecting your building’s HVAC system for the winter. 1. Check your boilers now. Start your boilers before the weather turns cold. 2. Shut down chiller. Book the shutdown of your chiller and cooling tower now, so that it can be done in a reasonable timeframe. Ensure that you drain or winterize your cooling tower. 3. Do an electrical scan. Complete an electrical infrared scan on all major electrical panels, disconnects, and switchgear, as electrical loads are higher in the winter months.
Conclusion Make sure that you follow best practices in the fall to prepare your rental properties before winter arrives. Doing so will help with maintaining the key components of your building and equipment, and help to extend their useful lives. You will also reduce the costs of having to hire the aforementioned professionals to do the maintenance and repair of these building components. By David Gargaro
CFAA Rental Housing Conference 2020
June 8-10 The Canadian Federation of Apartment Associations (CFAA) invites you to join us at Canadaâ€™s Rental Housing Conference at the Westin Nova Scotian in Halifax, Nova Scotia. www.CFAA-RHC.ca Thanks to Principal Sponsor:
With special thanks to:
rentalhousingbusiness.ca | 29
RHBTV – A new way to deliver rental housing news
“We created RHBTV to further satisfy the demands of our audience, who were looking for more information on the rental housing industry,” said Juan Malvestitti, co-founder of RHB Inc., and producer of RHBTV. “We’ve worked hard to ensure that RHB can adapt to consumer needs, and continue to be the industry’s one-stop source for all things rental housing.” RHBTV is not replacing the printed word, but rather supplementing and complementing our existing resources. RHB Magazine and theAnnual editions are valuable resources for industry members, and we will continue to deliver informative articles, features and market reports that readers have come to depend on over the years. While the magazine can delve more deeply into a subject with multiple contributors, RHBTV will cover a variety of topics in a faster paced news environment. “RHBTV provides us with the opportunity to reach a wider national audience with timely news and expert analysis,” added Malvestitti.
RHBTV also provides people in the rental housing industry with an opportunity to speak to their peers. With a variety of owners and manager of rental properties – from large investment portfolios and retirement funds to family portfolios and individual investors – we want to make certain that we communicate with as many people in the rental housing industry as possible. Our industry depends on contributions from a wide variety of perspectives, which is why RHBTV will provide our viewership with an outlet to share their stories, experiences, concerns, and successes. Juan Malvestitti – Producer
RHB continues to evolve and innovate. Why does it matter? Well, now there is another way for you to get the rental housing industry news you want. In addition to our six magazines, including RHB Magazine (which you’re reading right now), the RHB Newsreel, our weekly digital news platform, you can now watch RHBTV at your convenience. This innovative television platform provides another way to access industry news and views, and enables us to present that information in a different and timelier fashion.
“We believe dialogue and debate lead to progress and we’re honoured to provide a platform where owners, property managers and REITs can voice their positions on issues like taxation, housing and energy policy,” said Malvestitti. “We encourage your thoughts, opinions and on-camera participation, which will benefit all members of the industry.” For more information on RHBTV, or to contribute to our programming, please visit www.rhbtv.ca. By David Gargaro, in collaboration with Juan Malvestitti
DONE ONCE. DONE RIGHT!
FROM TOP TO BOTTOM – FROM START TO FINISH… WE’RE THERE. WYNSPEC is a multi-faceted consulting, engineering, design and project management ﬁrm. We provide a unique blend of services and expertise, working with our clients to restore, transform and modernize their buildings.
Recreational cannabis – one year later Bill C-45, also known as the Cannabis Act, has been in effect for about a year. Legalization of cannabis has created some legal grey areas when it comes to medical versus recreational use. It’s important for landlords to understand the differences, especially on how they are regulated.
Recreational versus medicinal cannabis – what’s the difference? Recreational cannabis is federally and provincially regulated, and must be purchased either from licensed retailers or the Ontario Cannabis Store. It can be consumed in private residences, unless the lease agreement or bylaws provide otherwise. Individuals can grow up to four plants per dwelling unit, unless otherwise stated in building regulations. Medicinal cannabis is federally regulated, and requires a medical prescription or a license for use. Consumers must purchase medicinal cannabis from a licensed producer, be designated a grower, or personally cultivate the produce, which requires a Registration Certificate from Health Canada. Consumption of medicinal cannabis in a rental unit does not require the property owner’s consent, but its allowed use does not displace or supersede lease provisions.
Enforcing legislation, policies, and rules Under the Residential Tenancies Act (RTA), a landlord has a legal obligation to repair and maintain rental units in accordance with health, safety, housing, and maintenance standards. They must also not interfere with the reasonable enjoyment of tenants’ use and enjoyment of their rental units. This includes an obligation to address complaints made by tenants against other residents. The consumption and cultivation of cannabis in a residential complex can have an impact on both obligations, as smoke and odour tend to migrate and there are issues associated with cultivating cannabis. “Landlords should consider having clear rules as part of their leasing documents with respect to consumption and cultivation,” said Kristin Ley, Partner, Cohen Highley LLP. “Any rules regarding the consumption of cannabis should align with rules around smoking or burning of any substance.”
32 | September - October 2019
The Human Rights Code does not apply to recreational cannabis. For a tenant to claim protection or exemption from a nosmoking policy under the Human Rights Code, they would have to produce medical documentation that evidences a need to consume marijuana. Absent medical documentation, consumption of cannabis is no different than consumption of tobacco. “A landlord’s smoke-free policy should anticipate a tenant’s need to consume medicinal cannabis,” said Ley. “A request by a tenant to be exempt from the no-smoking rules would then be addressed through the landlord’s usual accommodation process under the Code, likely beginning with a discussion with the tenant about whether there are alternative ways for the tenant to consume cannabis besides smoking.”
In-suite cultivation Tenants are allowed to grow up to four cannabis plants for recreational purposes. They must be produced from legally purchased seeds, and consumed for personal use. Growing medicinal cannabis requires a Registration Certificate from Health Canada. The number of plants allowed depends on the prescription. For example, if a patient is prescribed 8 grams of medicinal cannabis per day, they can grow up to 39 plants. Medicinal cannabis must be consumed for personal use, or the individual must be a designated grower for a medicinal cannabis user. Landlords may put in building regulations that prohibit recreational and medicinal cultivation of plants in rental suites. Growing cannabis plants may be inconsistent with residential use of the rental unit. A Registration Certificate from Health Canada does not supersede lease provisions. “Growing cannabis in units poses significant risks to the rental unit and the residential complex, including mould and water damage,” said Ley. “It might also impair the health and safety of the landlord and other residents.”
Creating a smoke-free building Landlords can pre-empt cannabis-related issues in the rental property by making it a
smoke-free building. Landlords who use the industry lease have a clause that allows them to amend or add to the rules that are part of the tenancy agreement, if they provide reasonable notice of any such change. For new tenancies, the rental application should require the tenant’s confirmation that they are aware that it is a smoke-free unit and complex. Additional terms and conditions to the province’s standard form lease should include a heading for smoking and cannabis and clearly indicate what is and is not permitted. Include language that states that, if cannabis must be consumed for a medical need, the tenant and landlord will establish an accommodation plan upon the tenant advising the landlord of the need. A no-smoking rule is easier to enforce against tenants who rented a smoke-free unit, especially when the building is smoke free. “In cases where the smoking prohibition was introduced after the commencement of the lease, the landlord should get legal advice
about what evidence will be necessary to pursue a termination of the tenancy for breach of the no-smoking rule,” said Ley. “Ultimately, the Board has to be satisfied that the tenant’s smoking is substantially interfering with other tenants’ reasonable enjoyment and with the landlord’s lawful rights and interest, including the ability to provide healthy housing to residents.”
Conclusion It has been a year since recreational cannabis legislation came into force, which has made it challenging for landlords to provide safe and healthy environments for tenants. Understanding the applicable legislation with respect to recreational and medicinal legislation, and knowing your rights and obligations as a landlord, can help you to address potential tenant issues and create the best environment for your rental property. By David Gargaro, in collaboration with Kristin Ley
Custom Solutions for the Rental Housing Industry Your tenants need insurance! ZipSure.ca’s Landlord Programs are innovative, value-add insurance options that can be purchased by tenants directly, or by the landlord which automatically provides insurance coverage to the tenants as a built-in, tenant benefit included in the cost of rent.
1 ZipTenant 2 Landlord Certificate Program 3 Embedded Coverage 4 Contingent Coverage For more information on how to setup a program, contact our Business Development Team 1-866-856-9876
rentalhousingbusiness.ca | 33
“Through my capacity as Realty Asset Manager for the City of Surrey, I have contracted the services of Canadian Tenant Inspection Services Ltd for the last 10 years. CTI Services has looked after the inspection services for our rental portfolio. I have had no concerns when dealing with CTI Services during our contractual arrangement and know that any request will be completed in a prompt professional manner. In summary, based on the level of service CTI Services has provided for me, I would have no concerns recommending them for inspection services.” –Ken Woodward, Realty Asset Manager, City of Surrey
Canadian Federation of Apartment Associations
“New Service of the Year”
your real estate investment one inspection at a time!
(778) 846-9125 www.ctiservices.ca
SEPTEMBER - OCTOBER 2019
CMHC Housing Conference – presenting progressive views By John Dickie, CFAA President As well as continuing to provide mortgage insurance and rental market reporting, CMHC is reorienting its work and operations to focus more on affordable housing. CMHC’s new goal is that “by 2030, everyone in Canada will have a home they can afford and that meets their needs.” 10 Key Themes at the CMHC Conference • Housing is the key financialized asset • Supply is a continuum (of multiple problems) • Climate change is affecting supply and demand • One size doesn’t fit all • Good policy won’t come from bad (or no) evidence • Social inclusion is a process • Nothing is a panacea • Everything (new and old) will help • Collaboration is key to success • We need to rethink rental in the 21st century In November 2018, CMHC held a large two day Housing Conference, covering a broad range of housing topics, including numerous speakers who offered progressive views on many important issues related to rental housing. Many for-profit rental housing providers would take issue with some of the ideas the invited speakers put forward, or with some of the facts they assumed or reported. However, some of the issues can potentially be turned to the rental industry’s advantage. CMHC recently released a summary of the information about the key
themes of that conference. See the box for the 10 themes. The summary, and videos of many of the talks, are available by google searching “CMHC” and “national housing conference 2018”.
Evan Siddall, President and CEO, CMHC
This article sets out some of the issues on which a very progressive view was presented at the CMHC Conference. For the remainder of this article, for sake of clarity, the perspectives of rental housing providers appear in bold italics, like this sentence.
Supply is a Continuum (with Government as Savior) At the CMHC Housing Conference, several speakers said, “Lack of supply is frequently cited as a major contributing factor in housing affordability problems.” Yet, according to many speakers, supply is not a single problem, but a continuum of multiple problems that suggest numerous different solutions are needed. Many speakers focused on issues peripheral to the key supply issue, such as landlord discrimination in rental markets and evictions due to “rental poverty” and “fuel poverty”. There are calls to address landlord discrimination, racism, evictions, and other barriers to housing. Rental housing providers and apartment associations believe
rentalhousingbusiness.ca | 35
How do you control utility costs?
SEPTEMBER- OCTOBER 2018
Reduce utility consumption and costs with a built-in energy intelligence solution. Increase cost recovery with seamless resident utility billing and save money on late fees with paperless utility invoice processing. Get valuable analytics and actionable insights to increase visibility and control.
A single connected solution for energy management
36 | nov 2017
888.569.2734 Yardi.com/Energy ÂŠ2019 Yardi Systems, Inc. All Rights Reserved. Yardi, the Yardi logo, and all Yardi product names are trademarks of Yardi Systems, Inc.
NATIONAL OUTLOOK the laws already address those problems. All provinces have Human Rights Codes that apply to rental housing. Those codes prohibit discrimination. They trump other laws, including rental laws. In Ontario and other provinces, renters can and do invoke human rights rules in disputes at the Landlord and Tenant Board. Low-income tenants are supported in making claims, or in defending landlord claims, at the Board. Major rental providers already have processes in place to make sure they comply with human rights law in tenant selection, and in dealing with tenants. Landlords have to accommodate tenants even when the tenants in question are disturbing the other tenants who are their neighbours. Code-protected tenants are one of the best protected groups in society, whereas landlords often feel attacked and blamed for things they do not control, such as problems caused by inadequate income support or mental health problems. Other CMHC Conference speakers addressed what they called the wrong mix of supply, “in which the secondary market overwhelmingly comprises smaller units (bachelor; one- and twobedrooms) and not enough larger units (threebedrooms+) for families and people living with children.” Here, the secondary market is being confused with the condo market. In most cases across Canada, the condo rental market is only a small part of the secondary market, and the rest of the secondary market consists mostly of two, three, and even four bedroom ground-oriented houses, which are ideal for families. Lack of affordability of supply was said to arise from the rise of the condo rental market, which is
more expensive than the primary market, and has virtually replaced purpose-built rental construction over the last few decades. The suggested solutions lean to yet more governmental regulation and intervention, such as rental-only zoning, mandatory inclusionary zoning, and governments as developers “to increase construction aligned with goals of affordability, accessibility, mix, and safety.” Rental housing providers and apartment associations hold the opposite view. Increased federal focus on rental housing and rent control discouraged investment in purpose-built rental housing (PBR). Fortunately for governments and renters, the supply shortfall was largely met by investors purchasing condo units, and renting them out. The units that were bought would not have been built otherwise. Far from harming the housing markets, condo investors saved the day for renters, and meant that the counterproductive government policies just led to a change in the composition of rental housing, rather than a decrease in the overall supply. If, for reasons of security of tenure and quality of management, policy makers now want to shift the composition back to a higher proportion of PBR, then the way to do that is to roll back the federal tax increases on PBR, and to roll back the rent control limits, that have become more onerous over the years (or better yet to eliminate rent control entirely). That should draw out more rental supply of the type that is preferred.
Social Inclusion as a Process (and NIMBYism) The CMHC Conference speakers said social inclusion is a key issue of our time. While often CONTINUED ON PAGE 40
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 email@example.com to start receiving National Outlook today!
rentalhousingbusiness.ca | 37
SEPTEMBER - OCTOBER 2019 Comparing the parties’ 2019 income tax platforms By John Dickie and Jeremy Newman, CFAA This article reports on the impact that the various political parties’ campaign promises would have on the income tax which landlords need to pay. Table 1 shows the promises known on September 23. Since the NDP has issued its platform, its position is unlikely to change. The Green Party has also issued its platform, but it speaks of reviewing “tax loopholes which favour the rich”, including the capital gains inclusion rate. To address the worst case scenario, our calculations will assume they would move to a 100% inclusion rate. Both the Liberals and the Conservatives (CPC) have announced income tax changes as platform planks, but neither of them had released their full platform at the date this was prepared. Any of the parties could announce additional changes. Both the Liberals and the Conservatives changes would produce a modest saving for each taxpayer, but will cost about $6B once fully phased in.
Table 1: Income tax promises (at Sept 26, 2019) LIBERALS
Propose to raise the personal exemption from $12,000 to $15,000, which will reduce taxes by $450 for most taxpayers, but not those above $150,000, as there will be a claw back to take full effect at $210,000.
Propose to reduce the federal tax rate on the lowest income bracket from 15% to 13.75%, which will reduce taxes for all taxpayers, but less at the low income end than the Liberals’ plan.
NDP Propose to raise the federal tax rate on income over $210,000 from 33% to 35%. Promise to raise the capital gains inclusion rate (CGIR) from 50% to 75%.
GREENS Propose to review the tax system with a view to eliminating loopholes for the wealthy, including increasing the CGIR from 50% to 100%. See the text under Table 2.
Chart 1: Federal income taxes payable based on incomes of $50,000 to $175,000 (See the notes under the title to Chart 2.)
Ordinary Income Ordinary Income Ordinary Income Ordinary Income
38 | September - October 2019
NATIONAL OUTLOOK Chart 2: Federal income taxes payable based on incomes of $175,000 to $300,000
(The solid lines are the federal taxes payable on ordinary income. The green and orange lines largely disappear under the red line, while the blue line is slightly lower. The dashed lines show the total taxes averaged over the five years if the taxpayer also achieves a capital gain of $200,000 once in five years.)
Charts 1 and 2 show the income taxes payable on various levels of annual income. In both cases, the solid lines assume all the income is employment, rental or business income (“ordinary income”). The dashed lines assume a capital gain of $200,000 is received once in five years, and include one fifth of the extra tax payable on the capital gain. Table 2 shows the tax difference in dollars in the year of the capital gain (which is different from what Charts 1 and 2 show.)
Table 2: Total federal income tax including a one-time $200,000 capital gain
Party Liberal CPC NDP Green
(if 100% CGIR)
Annual Ordinary Income $50,000 $28,972 $28,816 $43,747 $59,832
$100,000 $43,700 $43,316 $60,625 $76,332
$150,000 $59,832 $59,401 $78,125 $92,832
$200,000 $76,332 $75,901 $95,625 $109,332
$250,000 $92,832 $92,401 $113,125 $125,832
$300,000 $109,332 $108,901 $130,625 $142,332
Adding the provincial income taxes would add approximately one-third to two-thirds of these amounts to the total tax bill for an individual. The Greens’ plan to raise the capital gains inclusion rate to 100% is to apply to most corporations and individuals with a net worth of $3M or more (excluding their principal residences). Please visit www.cfaa-fcapi.org if you want to see or print the graphs on a larger scale. We urge you to check at www.cfaa-fcapi.org to see if any platform updates have been posted. CFAA will post revised tax graphs and tables if any more changes are proposed by any of the four parties.
rentalhousingbusiness.ca | 39
SEPTEMBER - OCTOBER 2019 CONTINUED FROM PAGE 37
thought of as an outcome, social inclusion is a process, working through the tension between professional wisdom and community or resident wisdom, and ensuring community members have meaningful roles in the design, planning, implementation, and even construction stages of a project. This approach is particularly useful for underrepresented and vulnerable populations, including people with lived experience. The challenges developers face in finding ways through multiple road blocks were not much recognized or addressed in general. However, speakers recognized that including people in the planning process for housing projects can create opportunities for people to voice NIMBY attitudes. As one panelist noted, “since every construction project is located near somebody, NIMBYism often results in little housing getting built anywhere.” Speakers noted that NIMBY opposition can change or be reduced over time. For example, secondary suites are a far more politically palatable affordable housing option today than they were 20 years ago. This change is attributed in part to the fact that secondary suites are now viewed as a form of “gentle density” and not as intrusive or objectionable as other forms of density, such as tall towers.
Everything (new and old) will help Instead of seeing condo investors as having saved past and current government policies from having even worse effects than they have had, condo investors are characterized as amateurs. According to CMHC conference speaker Nathanael Lauster, in “Building an affordable future for rental housing”, … While the financialization of housing and the rise of the secondary (condo) market in Canada has led to an overall increase in the number of amateur landlords, very little is known about who these people are, what their motivations for becoming landlords are, and what types of tenancies and rents are being offered (or for how long). (Summary, page 17.)
40 | September - October 2019
Some speakers suggested measures to limit further increases in the number of amateur landlords, and to ensure landlord practices become “more responsible”. For the former, suggested measures included increased taxes on private landlords (to limit the acquisition of further units). For the latter, landlord education and training measures were cited. The approach of raising taxes on condo rentals and burdening investors would also change the composition of the rental stock, but at the cost of reduced supply, shortages and increased rents. Rental housing providers believe that small (or “amateur”) landlords can provide an important source of new rental supply especially in constrained markets, but apparently that is not seen as enough of a contribution. On the other hand, other speakers suggested offering tax concessions to private landlords (reduced tax bills) to incentivize renting to tenants of low income. The summary indicated that this practice is apparently used widely in France, the USA, and Germany.
Conclusion from CFAA Most rental housing providers usually see government as getting in the way of their operations or development. However, many progressives see government as saviour. The rental industry can oppose the government as saviour mentality, but that strategy has its limits. Often, a more successful approach is to take advantage of whatever help can be obtained, such as the suggested help in overcoming NIMBYism. Rental providers and apartment associations usually do better for themselves and their members by evaluating each issue, and choosing carefully what to oppose, and what to support or play a leadership role on, while working with different allies on different issues. We can safely say the rental housing industry is in for interesting times.
NATIONAL OUTLOOK Join CFAA’s Direct Membership After the October 21 election, CFAA will have a critical window to build key relationships with the new or renewed government. As the voice of Canada’s rental housing providers, it is critical that CFAA maintains constant communication with the federal government and CMHC about landlords’ needs and interests, as well as the value that rental housing provides to the economy and people of Canada. CFAA is now engaged in a direct membership drive to increase the work we can do for the rental housing industry at this critical time. Along with the continued involvement of member associations, CFAA will consult with our direct members to make sure we are seeking the program improvements that will serve them best.
Goals and benefits of direct membership One CFAA goal is to improve the environment for the rental housing industry. That includes focusing rental construction incentives on the
areas where there is the greatest need for new rental construction, and promoting the use of direct financial assistance to tenants rather than subsidies for social housing at much greater cost. Another goal is to avoid tax increases, and especially any increase in the capital gains inclusion rate. Growth in direct memberships will enable CFAA to engage a well-connected, national government relations firm to provide greater monitoring of federal initiatives, and assist on key federal issues, including the tax and CMHC housing policy issues addressed in the preceding pages. As CFAA grows, other benefits for members include access to new members-only areas of the CFAA website, new education and training opportunities, and discounts on registrations to the CFAA Conference and other international apartment events. For more information, visit www.cfaa-fcapi.org or email firstname.lastname@example.org.
CFAA Rental Housing Compensation Survey 2019-2020 The only Canadian survey of rental housing employee compensation and benefits. Find out market compensation for all key positions in the sector, at the city or provincial level. To purchase the survey, e-mail email@example.com.
Visit www.cfaa-fcapi.org for more information.
rentalhousingbusiness.ca | 41
TRUSTED FOR OVER 40 YEARS
Since 1977, Lincoln Construction Group has been leading the way in a variety of services for commercial and industrial projects in the Greater Toronto Area and beyond. Ranging from asphalt paving and concrete work, to site work, landscaping and snow plowing, let Lincoln be the one-stop-shop for all your property maintenance needs. Built with determination, hard work and a high degree of respect and appreciation for each and every customer, we are committed to being the most thorough and responsive contractor to meet your every need. We assure you unmatched quality at a competitive price. Call us for a FREE estimate and consultation today!
2001 Albion Road, Unit 22, Etobicoke, ON. M9W 6V6. Office: (416) 675-7283 | Fax: (416) 675-7369 firstname.lastname@example.org | www.lincolngroup.ca
RHB’s forum for rental housing associations to share news, events and industry information
Hot Topics: HDAA discusses the government’s involvement in housing matters, and provides an update on licencing in Hamilton. pg. 45 LPMA discusses preparing rental properties for the winter. pg. 49 WRAMA recaps the topics and issues covered at its most recent meeting, including fire and water damage, recent sales, and student housing. pg. 53 EOLO discusses the City of Ottawa’s decision to choose between landlord licensing and enhanced by-law enforcement. pg. 57
The Member Associations
Discover why most people choose Cogeco for Internet and TV.*
Contact your Cogeco Account Manager at 905-337-7909 or email email@example.com to discuss our customizable packages and offers for your residents.
*Based on a 2017 CROP Survey, where Cogeco is available.
President’s message: Controlling government As we move toward a federal election, it may be a good time to ask ourselves if our governments are serving us well. Are we happy with the direction our society is moving in? This is the time to consider the actions of our governments both in the overall direction and how they deal specifically with housing matters. The Federal Government has a National Housing Strategy, which will introduce portable housing allowances in the future. A person living in Ontario working 40 hours a week at minimum wage earns around $2,400 a month; if you follow the 30 per cent rule for housing, that person should be able to afford to pay $720.00 in rent per month. According to the 2018 CMHC Rental Report, the average rent for a one-bedroom in Hamilton is $907.00, which means they will struggle to afford to rent an apartment alone and will need a housing allowance of at least $187.00. Let’s say the government gives them an extra $200.00 per month to offset their housing costs. Their employer is deducting federal and provincial income tax of $62.58 a week, which works out to $271.00 a month. If the government raised the income tax brackets so that minimum wage earners do not pay income tax, it would be more efficient from a workload point of view to allow them to keep the $271.00 so they don’t need the housing allowance. Housing allowances are still needed but raising tax brackets would reduce the number of people who need them. Canadians understand the concept of fairness. We accept income tax brackets that have a higher tax rate for higher income earners while the lower income earners pay a lower tax rate so everyone can afford to live and still contribute to
society. I believe if we were designing the property tax system from scratch, we would accept lower tax rates on multiresidential properties for two reasons. First, renters generally have much lower incomes. Second, and perhaps more importantly, multi-residential properties are cheaper to service in terms of garbage pickup, snow clearance, road maintenance, etc. Multi-residential properties also have benefits in terms of land use, intensification, efficiency of public transit, etc. Unfortunately, in many cities, the tax rate is much higher; as an example, Hamilton’s multi-res tax rate is about two and a half times the residential rate. If the tax rate was equalized, it would lead to a rent reduction in the 10% to 12% range; that one-bedroom rent would go from $907.00 per month to at most $816.30 per month, again making housing more affordable. Sometimes the government has the best intentions but doesn’t produce the best outcome. One of these examples is inclusionary zoning. When a developer is required to reduce the rent on some units in a new building, the cost is borne by the rest of the residents in that property. Having the rents of 10% subsidized by 90% is only increasing the rents for the majority. The argument of allowing greater height or density does not hold water; if a site is suitable for seven floors, then it should be zoned for seven floors, not zoned for five so that the municipality can negotiate reduced rents on some units in exchange for more height. People who need assistance should be helped by all of society, not just the other residents of that property. The Golden Horseshoe area (Toronto to Niagara and surrounding cities) has seen
rentalhousingbusiness.ca | 45
great growth recently, which is expected to continue for decades to come. NIMBYism tends to restrict development when we should be planning the growth for the entire region. Councillors are politically driven to keep the residents in their wards happy, rather than choosing the best development for the region. Governmentfunded agencies like Metrolinks are planning transportation for the entire region, which is good because decisions are made for the greater good and not to placate local constituents. With the best of intentions, the government has added layers of complications to our lives and then put in controls on how we use our money. Combined, the different levels of government take between 40% and 45% of our incomes and give us back benefits that they see fit. The number of people employed in the public sector continues to grow and studies have shown that wages and benefits in the public sector have grown faster than in the private sector, adding to our taxes. It would be nice to see the government be less bureaucratic and focus more on its core priorities. The point of a governing body is to listen, react, and implement the people’s needs. Do we control government, or does it control us? - Arun Pathak, President
Update on licencing in Hamilton At the end of 2018, the Planning Committee requested City Staff to draft a comprehensive plan/proposal for a rental licencing pilot project that included: education for tenants and landlords, concrete metrics for success, an analysis of staffing levels, an analysis of the financial offsets for such a project, and a review of the affordable housing and potential displacement issues of such a project. The Staff report was due to be presented to the Planning Committee in March, May, and September but kept getting pushed back. Now in its place is a proposed Accessory Dwelling Units (Pilot Project) – Temporary Use Bylaw for City of Hamilton Zoning Bylaw No. 6593 (PED19176), which will be discussed at the September 17 Planning Committee meeting. This temporary zoning bylaw change will help make nonconforming units, which would normally be “illegal” due to section 19 zoning restrictions, be able to get building permits. Although this will reduce the impact a trial licencing program would have, it will not eliminate the loss of supply or reduce the costs associated with a program that is already being done through the City’s proactive bylaw enforcement program. HDAA congratulates City Staff for proposing the Accessory Dwelling Units and applauds the City for accepting the direction of the Provincial Government by enacting Bill 108.
46 | September - October 2019
This effort to help housing providers create more housing is a great step toward increasing supply in Hamilton. Along with the other 25 recommendations proposed in HDAA’s paper “Promoting Code Compliant, Affordable, Safe, Clean and Healthy Rental Housing,” we believe if this is introduced citywide, the changes will go a long way to reduce the housing affordably crisis the City is currently facing. We can only hope that when the official re-zoning plan comes out it will also see the same zoning regulation changes so the benefits can increase supply across the City. It would be a shame if the only reason this zoning bylaw change is being proposed is for a licencing regime to be enacted and not because it helps create more affordable housing. However, we would like to have the Planning Committee and City Staff look at the implication of what happens after the three-year proposal term ends. Will units be forced to go back to the current zoning regulations? Will investments be wasted when this bylaw is discontinued? Will there be a grandfathering clause added?
Recent events September 11: Dinner meeting Danny Roth from Brandon Communications went over the pitfalls to avoid while talking to the media. He provided some sound techniques on responding to positive and negative press. He walked our members through how to be prepared for any media focus by establishing protocols and educating your team. This is an important presentation that all housing providers need
to have in their toolbox. Renée Wetselaar from St. Mathew’s House provided valuable information about services that are available for housing providers Danny Roth to help their tenants. She discussed resources for housing providers to use when their tenants have mental health issues, as well as healthcare, aging, and income challenges. She Renée Wetselaar talked about how important it is for groups that are typically on opposite sides of issues to work together on topics they agree on. There is a community that can help your at-risk tenants; working together to help those who struggle only makes our community stronger.
Hamilton and District Landlords Since 1960, the Hamilton and District Apartment Association has grown significantly. Our members manage over of 30,000 units throughout Hamilton, Burlington, Brantford, Guelph, Mississauga, Oakville, St. Catharines and into the Niagara Peninsula. The association is a highly respected organization, sought out regularly by government, industry, media and the public.
Interested? Call us or join online! Ph: 289-208-5445 Web: www.hamiltonapartmentassociation.ca Mailing address: PO Box 33522 Dundurn Road, Hamilton ON L8P 4X4
rentalhousingbusiness.ca | 47
Affordable Housing Conservation Program
Comfy living for tenants. Comfy energy bills for you.
Visit uniongas.com/ affordablehousing to learn more
Weâ€™ll cover up to 50% of the cost when you upgrade to high-efficiency equipment The Affordable Housing Conservation Program provides financial incentives for high-efficiency space and water heating equipment, heat recovery, building automation systems and more.
President’s message Together we shine I would like to welcome everyone back after the summer. I am proud to be part of such a great organization and I’m grateful to have the support of our directors and members as LPMA’s returning president. Our most recent event, the annual golf tournament, was held on September 9 and sold out in less than two weeks. It was a huge success and we raised about $15,000 to donate to Merrymount Family Support and Crisis Centre for a second consecutive year. I would like to extend a huge thank you to everyone who participated. This event wouldn’t be as successful without all of you. Our monthly meetings start back up on October 8 at the Lamplighter Inn, with dinner and a general meeting to follow. Please stay tuned to our emails and website for updates and any changes regarding events and information that benefit our members.
- Shirley Criger, LPMA President
It’s not too soon to prepare rental properties for winter With the scent of fall in the air, landlords are starting to get their apartments and townhomes ready for winter. A solid maintenance schedule, paired with seasonal inspections, help housing providers avoid emergencies and keep tenants warm. Nick Graham, maintenance manager for Sifton Properties in London, recommends that landlords start their preparations by mid-August. “You’re going to want to make sure you’re properly equipped and that your equipment is being looked over for the upcoming season,” Graham says. “You’ll want to reach out to your contractors if you’re contracting out any work to make sure they’re still on board or if you need to obtain any necessary tenders or quotes.” Sifton, which owns nearly 1,000 townhomes and five apartment buildings in London, works with an arborist, who has a preventive maintenance program, and a licensed gas fitter, who maintains the boiler systems in the company’s apartment buildings, according to a schedule. The gas fitter also turns on the boilers by September 15 to comply with the City of London’s vital services bylaw.
Outdoor maintenance At the end of September, the maintenance crew turns off exterior faucets and prepares the underground sprinkler system for winter. A compressor pushes air through the pipes to prevent water from freezing and causing cracks in them. Outdoor swimming pools are closed midway through September. In mid-August, the crew assembles trailers with leaf vacuums and checks the equipment to ensure it’s functional. “You want to stay about a month ahead of the game with the equipment,” Graham says. The landscape crew, wearing backpack blowers, blows the leaves to the curb. The leaf vacuum then suctions them up. Graham advises landlords to clean downspouts and eavestroughs of leaves before cold weather arrives; otherwise it’s impossible to remove debris once it freezes. In the last seven years, Sifton has been replacing eavestroughs in its townhomes and installing gutter guards. Made of perforated metal, they come in 10-foot sections and sit on top of the eavestroughs. Graham says the guards have been beneficial in keeping gutters mostly clean of leaves, a consideration in London’s Berkshire and Westmount communities where there are hundreds of mature trees.
Although many landlords repair potholes in the spring, Graham says they should still inspect asphalt parking areas every fall. Lisa Smith, past LPMA president, says potholes are often neglected since many landlords associate them with summer. “If you have big potholes that you don’t fill now, then the asphalt factories close up and you can’t get hot asphalt to fix them. A cold patch is just a waste of money. Potholes are some of the big reasons why people slip and fall,” she adds. Salt is another important maintenance item. Smith suggests that landlords order it in bulk because there is always a shortage toward the end of winter. Graham generally preorders it by September 15. “We have to make sure that we’re being proactive and that the product will be available to us when we need it,” he says.
rentalhousingbusiness.ca | 49
Indoor maintenance Graham recommends that landlords have a program to maintain and replace components. For example, Sifton has a window replacement program to improve the energy efficiency of its units. Crews also reshingle specific blocks of townhomes on an annual basis, according to their schedule. In addition, the company inspects roofs, soffits, and building exteriors spring and fall. “Being on a good program of replacement and also doing seasonal inspections keeps us up to date and lets us know about any issues that need to be addressed,” Graham notes. Sifton treats insulation and venting as a capital project and upgraded its townhomes several years ago to reduce heat loss. “If the attic isn’t breathing properly, you run into a lot of issues with ice damming and ice floes,” Graham says. Staff also check smoke alarms and carbon monoxide detectors every fall to ensure they are working properly. “When we have access to a unit to do something like check smoke alarms, then, while we’re there, we change the furnace filter and check the dryer vents. That’s an annual preventive maintenance program,” Graham says. “It also gives us a chance to do a visual inspection of the unit. Of course, we include those items in our notice of entry, so that tenants will know we need to go to those areas, and we have the legal right to do so.”
Graham strongly advises landlords to maintain their properties to reduce emergency calls and protect their investments. “If you’ve been proactive on your maintenance during the year, then it should make your life easier in the winter,” he observes. Landlords who own just one or two properties also need to be prepared.
“Everything a large landlord does, a small landlord needs to do, just on a smaller scale,” Smith says. “They should be just as prepared as the larger buildings.”
Snow removal insurance Josh Fentin, commercial relationship manager for A.P. Reid Insurance, recommends that building owners eliminate as much risk as possible by hiring licensed snow removal contractors who insure their businesses properly.
“By hiring a professional, reputable company to handle your snow removal service, you’re able to ensure that your properties are being adequately maintained,” says Fentin.
Fentin advises building owners to have a lawyer review their snow removal contract, which should clearly outline each party’s responsibilities. It’s also critical that the terms of the contract are clear and that the building owner and the contractor agree to them. If there is a proper contract, and the contractor has adequate insurance, then in the event of a slip and fall claim, for example, the contractor’s insurance will respond first when the building owner is sued. Alternatively, the contractor’s insurance will allow the building owner’s insurance to seek restitution from the contractor’s policy.
Fentin says some landlords choose to remove the snow from their own properties to avoid the expense
50 | September - October 2019
of a contractor. However, they will likely pay a higher premium for their insurance and there is no recourse in the form of an additional insurance policy, namely a contractor’s, in the event of a claim. “These claims are then settled through your policy, which will impact your rates and potentially your ability to obtain insurance down the road,” Fentin says.
Certificate of insurance The contractor’s role in removing snow and his insurance limit should be clearly laid out on the certificate of insurance. It’s also helpful if the contractor adds the building owner as an “additional insured” to his commercial liability policy. It doesn’t cost the contractor extra and it works to the building owner’s benefit. The contractor’s commercial liability policy will be the first policy that responds in the event of a claim. When contractors add a client as an additional insured, they need to inform their insurance company. Building owners can then be confident that their contractor has adequate coverage. “Ask them to name you as an additional insured and it gives you an added level of security,” Fentin says. The certificate of insurance should indicate the
policy number, the insurance company that provides the contractor’s coverage, the overage limits that are applicable, and the policy term, such as spring to spring, along with a notice of cancellation to additional insureds. If a contractor cancels his insurance, the insurance company is supposed to notify anyone who has been named as an additional insured. “That’s how you can make sure they’re maintaining that insurance,” Fentin says. With the costs of snow removal insurance on the rise due to increased liability claims, some contractors may try to save on premiums by incorrectly reporting their operations. This can have damaging effects not only on the contractor in question but also on the companies that engage them. As a result, securing a proper certificate from the contractor has become increasingly important. “If they’re hesitating to give you a certificate of insurance, then it’s very likely that they don’t have the right coverage,” Fentin says. “In the end, if they do something wrong or they’re negligent, instead of going back to that contractor’s insurance first, it’s now hitting your building policy. You’ll still have coverage, but if you can avoid those claims on your policy by hiring contractors who have their own, you’re going to save on claims and, in the long run, save on your premiums.”
rentalhousingbusiness.ca | 51
52 | March 2019
President’s message Waterloo Region continues to be a community where people want to live. “The region is the 10th most populous Census Metropolitan Area (CMA) in Canada, with 583,500 residents in 2016. The Province’s Growth Plan projects that Waterloo Region’s population will reach 742,000 by 2031, which makes it one of the fastest growing regions in Ontario.” (Source: regionofwaterloo.ca) As more rental housing investment comes from outside the Region, the Waterloo Regional Apartment Management Association continues to strengthen its voice as a credible leader among rental housing providers. We are very excited about WRAMA events organized over the fall. Visit www.wrama.com for more details about the events and becoming a member! Wednesday, October 9, 2019 Education Seminar Speakers: Paul Weingartner, President, ECNG Energy Group, and Stephanie Lopez, Climate Controls and Security, CHUBB Wednesday, November 13, 2019 Signature Event - Rental Housing Provision National Outlook Keynote Speaker: John Dickie, President, Canadian Federation of Apartment Associations The importance of understanding the issues and being informed about the federal policy impact on rental housing provision cannot be overstated with a federal election scheduled for October 21, 2019. Tax implications, national housing funds, and vision to address housing issues across Canada impact the way in which rental housing business is done – so be sure to vote! WRAMA continues to engage in dialogue with local rental housing associations, having met with leaders from North Bay (Near North Landlord Association), Sudbury (Greater Sudbury Landlord Association), and Peterborough (Peterborough Landlords Association) in August 2019. Common themes ranged from feelings of gratitude to the provincial government for listening to rental
housing providers and taking action on items including rent control and development holdups, to frustration with the Ontario Landlord and Tenant Board and adjudication hearing dates set months after initiating notices. Subjective and inconsistent rulings by adjudicators and huge costs to property owners who are left with non-payment of rent and damage to units has left small rental housing providers with deep feelings of helplessness. - Andrew Macallum, President
WRAMA Expert Panel Event (l-r): Kristin McCutcheon, FirstOnSite; Gail KukorLang, Cohen Highley; Brian Bourke, AM 570 Kitchener Today; James Craig, CBRE; Tara Brouwer-Sutton, Domus; Andrew Macallum, WRAMA
WRAMA September meeting WRAMA had a great crowd for its meeting on September 11, 2019, as four experienced speakers joined us to discuss a number of highly relevant topics, including the effects of cannabis legislation one year later, provincial government housing initiatives, higher quality student housing, damages to rental units, rental building purchases and sales, dealing with the LTB, and more. As WRAMA’s mission is to actively and positively develop and sustain the integrity of its members’ business – the provision of private residential rental accommodation – in the Golden Triangle, this essential presentation of information will help rental housing providers to plan for and address the many challenges that will inevitably surface.
Cannabis legislation - one year later By the time the federal election rolls around, it will have been about one year since recreational
rentalhousingbusiness.ca | 53
cannabis was made legal in Canada. Prior to legalization, and during most of the year thereafter, there was a lot of discussion of how it would affect landlords and the rental housing industry. Discussion on the topic was quite interesting, given the different perspectives of the speakers. Tara Brouwer-Sutton, founder of Domus, stated that the results have been relatively positive. Her company deals with a lot of younger residents, who were more inclined to smoke cannabis in their apartments for fear of being caught prior to legalization. Since legalization, she has found that they are more willing to smoke outside, which is less detrimental to other residents and maintenance. Kristin McCutcheon, Business Development Manager with FirstOnSite Restoration, believes that there will be a decrease in the number of illegal cannabis grow-ops, which can cause significant property damage. She added that legalization has changed the market model, and more people are growing for personal use rather than large-scale sales. James Craig, Senior Sales Associate with CBRE Limited, found that there have not been any significant issues that would impede a transaction. In speaking to property managers, the main challenges were tenant complaints about smell, as well as tenants growing cannabis within the rental unit. He found that strong rules and leasing regulations helped to manage these issues. Gail Kukor Lang, Paralegal with Cohen Highley LLP, added that she has received more questions from landlords about cannabis, but they have not filed more applications to the Landlord and Tenant Board as a result of tenants using or growing cannabis. Landlords have found that tenants who were already using cannabis prior to legislation have continued to use it, and have been respectful both prior to and after legalization. As a result, there have been few issues that have arisen due to legalization.
Increased quality of student housing Ms. Brouwer-Sutton discussed the trend toward higher quality student housing. Students have more money available to spend on housing because parents are covering these expenses. They want newer, more secure, and cleaner housing for their children, and are willing to pay more to get these types of accommodations. She added that there are also more international students coming to Canadian universities, who have more resources to spend on housing. “We have seen an increase in parents being more involved in the housing search,” said Brouwer-Sutton. “As more parents are paying the bill, they want to ensure they are paying for the conditions and services they want their children to have while away from home.” While there is more interest in newer, more upgraded properties, Ms. BrouwerSutton said that there is an increasing trend toward more private units. Parents are willing to pay higher rents for smaller and more private units for their children attending university away from home. She found that rents on one-bedroom and bachelor units in student areas increased by as much as 50 per cent from three to four years ago, even with an increase in the rental housing supply. With newer units getting higher rents, and a general increase in more rental product seeing higher rents, Ms. Brouwer-Sutton found that there has been an increase in rents for older stock as well. She stated
54 | September - October 2019
that she has seen rents increasing on average by up to 12 per cent from three years ago, and even higher for buildings that offer more privacy. “Some rents have increased above inflation rates,” added Brouwer-Sutton. “Again, the more private the living and better the amenities, the higher the rent is going up.”
Dealing with water and fire damage Ms. McCutcheon talked about issues related to damages to rental housing units. The two most common causes are water damage from flooding and fires. She said that most issues are cyclical and tied to changes in the weather. The first cold snap of the year tends to see an increase in fire damage, as people start their fireplaces to avoid turning on their heaters. In January and February, she tends to see an increase in burst pipes, while in the spring there’s a general uptake in water damage from overland flooding. “Damage from wind and water is also prevalent through parts of the spring and summer,” added McCutcheon. Ms. McCutcheon said that fire damage tends to be worse than it should be because many apartments have non-functional smoke and CO2 detectors. She has seen these situations arise more often than they should, and advised attendees to check smoke detectors every spring and fall when the time changes. Kitchen fires were the most common incident in rental units, and generally had the higher replacement cost. “Incidents such as trauma scenes or the cleanup from someone who hoards are less frequent but more expensive to restore,” added McCutcheon. “They can also include a mental health or community component that extends beyond the physical damages.”
Purchases and sales of rental properties Mr. Craig stated that interest rates have never been this low, which has continued to surprise the market. With global bond rates at record lows, there is downward pressure on lenders to provide five- and ten-year term mortgages just above 2 per cent. “Capitalization rates have continued to compress and are pushing into the sub-4 per cent range in the region,” said Craig. “The spread between the two can range from 150 to 200 basis points in some cases, which allows building values to push higher. The current market continues to be a great time to purchase apartment buildings, however the lack of available product makes it very difficult to do so.” According to Mr. Craig, due to the limited amount of product in the market over the past 12 to 18 months, there has been more pressure on buyers to accept certain building conditions that they might not have historically been willing to accept. When a potential buyer decides not to step up, there are a number of people behind them willing to take on the challenge. He added that it is also reflective of pricing, where it’s common to see limited difference between concrete construction versus wood construction, when historically this could be quantified on a price per unit basis. “Based on MLS sales data, the average sales price per unit for buildings under 15 units has jumped 20 per cent since 2016 where buildings larger than 15 units have climbed 30 per cent over the same period,” said Craig. “During that time, the number of sales have almost dropped in half.”
Discover the benefits of being a member of our association The mission of the Waterloo Regional Apartment Association is to actively and positively develop and sustain the integrity of its members’ business – the provision of private residential rental accommodation – in Waterloo , Kitchener, Cambridge, Guelph and surrounding areas. To view the full range of valuable property managment resources we offer to our members, or to apply online go to http://wrama.com/, or contact WRAMA at 519-748-0703.
rentalhousingbusiness.ca | 55
O O ne n O e Vo ne M ic e e M s , ag sa az ge in , e! k in Th
t ou ab
Vol. 12 No. 4 Sept-Oct 2019
e. su is xt ne e th in y! s is da e m to ri b ’ll e sc in ou az ub ty /s ag ha ca s.
Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives
The official publication of:
City of Ottawa studies landlord licensing or enhanced by-law enforcement By John Dickie, Chair, Eastern Ontario Landlord Organization As reported in the last issue of RAV, the City of Ottawa has engaged a team of consultants to review the options for landlord licensing, or enhanced enforcement of current by-laws. The City is also looking at regulating Airbnb and similar short-term rental platforms.
The consultation process The consultants initially wrote three discussion papers and held 12 consultation sessions with 325 people in total. EOLO leaders and numerous other landlords were there to give our side of the story. EOLO made a 20-page written submission, which was summarized in the last issue of this magazine. The City also ran an online consultation that attracted over 2,000 respondents, including about 40% landlords, 40% tenants, and 20% homeowners. The consultants then issued a 48-page options paper. EOLO made another 20-page submission addressing the refined options. As well, the City ran another online consultation. The results of that consultation should be released shortly. It seems likely that the consultants will recommend either a pilot landlord registration project in one or more limited areas or, more likely, enhanced property standards and by-law enforcement. City staff will make recommendations for the Community and Protective Services Committee to consider at a special meeting on November 15. We expect the City staff to recommend enhanced by-law enforcement.
Overview of EOLO’s position EOLO is strenuously opposing landlord licensing and also its close cousin, broad-based registration and proactive inspections, everywhere in Ottawa, including any pilot project. We accept that more effective by-law enforcement is needed, and made many suggestions for how that can be kept fair and cost-effective, both for the City and for rental housing providers. EOLO met the Mayor’s office and numerous City Councillors, and we think we have reason for optimism about the final outcome, but much remains to be done.
In a nutshell, EOLO submits that landlord licensing would reduce the availability and affordability of rental accommodations, while having little, if any, positive effect on the quality of rental accommodations, whereas other measures would have more or better positive effects, and much less adverse, unintended consequences.
Rental licensing or registration Within typical licensing schemes, businesses have to register, they are inspected, and the City issues a license to those who fulfill all the registration requirements and pass the inspections. Licensing exposes the City to potential liability for issuing a license when the business turns out to be noncompliant and harm ensues. For that reason, landlord licensing as a whole seems no longer to be on the table. In the options paper, the consultant suggested that there could be a landlord registration system and proactive inspections. Depending on the details, that could be almost as bad as licensing. It could cost almost as much, take almost as much work for landlords, and thus have practically the same negative effect on rental supply, availability, and rents as licensing. The main problem would occur if such a system is broad-based, since its costs and effects would be felt by the many landlords who provide good quality accommodation and services, as well as by the few who do not.
The key issues Is the problem serious and widespread? In determining the appropriate government response to any problem, key questions are how serious is the problem, and how widespread is the problem. The seriousness varies from minor to serious. In their report “Property Standards in Rental Housing,” City staff reported on the service call types for all 23 City wards. Among the minor calls are calls about exterior debris/waste, long grass/ weeds and building exterior, which seem likely to have only a minor effect on renters. Many building
rentalhousingbusiness.ca | 57
interior calls would also be minor, while some could be serious, such as legitimate calls about mold. The same staff report states, “Overall data suggests that the quality of private market rental housing in Ottawa is very high. Approximately 9 out of 10 rental properties have not been subject to a property standards complaint over the previous decade.” Another 7% were the subject of only one call. Only 3% were subject to two or more calls. (page 7) In their Rental Housing Policy Options paper, the consultants state that only “a small minority of rental housing” is “in poor shape” or run by “landlords who are not responsive to tenant needs” (page 24).
Improving ineffective enforcement A more cost-effective solution, which does not bring with it the downsides of landlord registration, would be more concerted action to address the limited number of problem addresses, up to and including prosecutions for substantive property standards violations. Alternately, when the violations are the failure to repair properties after notice, then the City could have the work done, and add the cost to the property’s tax bill. The consultant has also suggested that some by-law enforcement be done the way parking enforcement is often done, namely by sweeps through areas by by-law officers, who would ticket those who violate the property and maintenance standards. That would primarily apply to offences visible on the outside of buildings, such as uncut grass, garbage strewn about or exterior building defects such as deteriorated siding. EOLO is not opposed to such a process in principle. However, we have made the point that various legal rules need to be taken into account, including:
• Not making a mess and proper waste handling is the
responsibility of all tenants, subject to the landlord’s subsequent responsibility to clean up, and pursue the tenants for the cost of the clean up. • The responsibility to remedy deficiencies can be that of the landlord or the tenant or both (or even a third party such as a neighbour, a wrong doer or the City, if one of them has caused the problem). • In the case of repairs needed to the interior of rental units, tenants need to notify landlords so that we know the work is needed. As a result of those legal rules, enhanced enforcement should follow these rules for enforcement:
• Landlords should have a means to provide the City with contact
information for informal, expedient notices, which can be property managers. • The person at fault (whether tenant or landlord) should be given at least a short time to correct a deficiency. • When the City can tell that a tenant is at fault, the notice should go to the tenant, and if there is to be a fine, it should go to the tenant. • Otherwise the notice needs to go to the landlord or the property manager.
Gaining entry Under the Residential Tenancies Act (RTA), a landlord can gain access to a rental unit by giving a 24-hour written notice of entry to determine the condition of the unit, and whether the
58 | September - October 2019
unit complies with housing and maintenance standards. EOLO agrees that the City could enact a by-law requiring landlords to comply with a demand from a property standards officer (PSO) to give notice of entry and then to enter with the property standards inspector to determine the condition of the unit. Mandatory registration is not needed to obtain entry.
Financing more inspections Proponents of landlord licensing or registration see it as a way of collecting money outside the property tax system to fund more property standards inspections. A better way to raise money to finance more inspections is to charge for re-inspections. The first inspection should still be “free”, along with the second inspection that is to determine if the work has been done. However, if a third or fourth inspection is needed because the work had not been done when it should have been done, then the City could charge for those. EOLO would prefer all inspections to be covered by the City’s tax base, but charging for extra reinspections would be much better than charging all landlords through a licensing or registration scheme. Moreover, rental housing makes up 34 per cent of the City’s dwelling units, but is responsible for only 18 per cent of property standards calls. The City could hire three more inspectors to address rental housing issues before reaching the load that homeowner to homeowner calls place on property standards enforcement.
Deficiencies in LTB enforcement If there is a concern about tenants not knowing their rights, then the cost-effective solution is to support agencies like Action-Lodgement and Housing Help. If there is a concern that too many landlords do not know their obligations under
the RTA, then the cost-effective solution is to support and encourage groups to provide more landlord education.
Helping fearful tenants enforce their rights Some tenant advocates say vulnerable and lowincome tenants are afraid to apply to the LTB or to call property standards because they are afraid of retaliation from their landlord. However, the RTA gives tenants protections, and there are several support agencies for vulnerable or low-income tenants or for students. The experience of EOLO’s members and most other landlords is that tenants are not at all afraid to make requests and demands for repair work. Indeed, landlords find that numerous tenants make unreasonable requests with no fear at all. If there is concern that vulnerable tenants do not know their rights or are afraid of their landlords, the cost-effective solution is for the City to provide (more) funding for Action-Logement and Housing Help.
Conclusion Mandatory rental registration would reduce rental supply and increase rents. EOLO submits that neither licensing nor mandatory registration should be imposed on rental housing, since the concerns that are driving the demand for them can be addressed through less problematic and less expensive alternate approaches that generate much less risk of a reduction in the rental supply and higher rents. See www.eolo.ca for a complete copy of the two EOLO submissions, and an update on the status of the issue.
BECOME AN EOLO MEMBER NOW! EOLO invites Ottawa area landlords to join the organization. Have your interests and concerns heard, and benefit from EOLO’s support. As an EOLO member, you will be able to: • Receive
prompt emails of relevant City rule changes
two networking receptions a year
two free education events a year
Receive all 6 annual issues of RHB Magazine with current developments, City and provincial funding programs, and landlord-tenant laws.
To apply for membership, go to www.eolo.ca, download the membership application form and send it to us at the contact info on that website.
rentalhousingbusiness.ca | 59
Brought to you by:
RHB SIDEBAR Capital Markets & National Investment Snapshot
National Apartment Group
Comparing rent-to-income ratios in Canada’s primary markets DAVID MONTRESSOR, Executive Vice President, CBRE - National Apartment Group
As Canada’s housing market receives greater interest on the international stage, much attention is being paid to the relative cost of housing between the world’s major markets and Canada’s gateway cities. The conclusion: our largest urban centres still remain discounted compared to their global counterparts. Within Canada, similar opportunities exist between primary markets. The portion of Canadian household income paid to rent has been increasing steadily in recent years. In Toronto and Vancouver, where rents have been rising for several decades, the average rent-to-household income ratio has reached 34% in both cities. In Montreal, though rents are increasing and rental vacancy rates are falling, the rent-to-income ratio is still playing catch-up at 21%. One key difference in Montreal is fewer barriers to supply when compared to the cumbersome planning frameworks and structural shortages of trade labour in Toronto and Vancouver. Montreal’s population is roughly 2/3 of Toronto’s, but its rental market is nearly 1.5 times the size. With approximately 620,000 primary and secondary rental units in the city, Montreal is Canada’s largest rental market, while Toronto’s rental market is comprised of only 450,000 rental units. As a result, there are 6.5 people for every multifamily unit in Montreal. In the Greater Toronto Area, that number exceeds 14 people per rental unit – more than double that of Montreal. Even though Montreal is Canada’s largest rental housing market, supply has been strained by growing demand for housing in the city, putting upward pressure on average rents in the last five years. This strong growth in demand for purpose-built units in Montreal is largely driven by increasing international migration and a fall in Quebec’s interprovincial migration deficit. Considering the city’s tightening market fundamentals, it remains possible that Montreal’s relative affordability will revert to normalized levels seen in other primary markets over time. With falling vacancy rates and a discounted rent-to-income ratio, the outlook for rental growth in Montreal suggests an opportunity in the near term. Source: CMHC, Conference Board of Canada, CBRE Research
60 | September - October 2019
Local Knowledge. National Reach. National Apartment Group
OFFICES ACROSS CANADA
IN SALES VOLUME
Contact us to learn more about how we can help you
RHB, RHB Magazine. Canadian Elections