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It’s no secret that rental apartments are in demand in Canada’s biggest cities. With low vacancy rates, limited rental supply, and rising immigration levels contributing to the nation-wide glut, forward-thinking housing solutions are desperately needed now. And adding to that need, renters want options. They also want key features—which it seems they’re willing to pay for. The Canadian Multi-Res Tenant Rental Survey, conducted by and Bullpen Research & Consulting shows that 36% of tenants would pay more rent for a renovated space. In terms of dollar values on average, tenants would pay $11 more per month for an en-suite bathroom; $12 more for a kitchen renovation; $14 more for a balcony/outdoor space; and $15 more for a covered parking spot. Meanwhile, $18 said they would pay more to live in a brand new rental building. This, of course, is only good news for the apartment industry, as long as the reward on investment is worth it. In this issue of Canadian Apartment, we look at all sides of the housing story, and showcase some great new projects. And with the upcoming federal election keeping us all on the edge of our seats, we can only hope that the future includes policies that support and nurture new development. After all, it’s what everybody wants.


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Roman Bodnarchuk, Lorenzo Gigianfelice Chris Seepe Graeme Huycke Andy Schwartze

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Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions. Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor.



The opinions expressed are those of the authors of articles and do not necessarily reflect the views of Canadian Apartment Magazine. This information is general and is not a substitute for legal advice. Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Apartment Magazine makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada. the average monthly rent for a one-bedroom in Toronto


...of rental households in Canada are single-person

$2.49 the average rent per square foot in B.C.


... is what most tenants would add to rent for in-suite laundry


...of Toronto tenants’ incomes (on average) goes to rent

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FEATURE 14 C  o-living The key to unlocking higher cap rates by Roman Bodnarchuk

COLUMNS 8 Transactions Q3 Investment Sales Activity 10 CMHC By the Numbers by Graeme Huycke 24 Ask the Expert Smart Life-Saving Solutions 26 Newsworthy Industry Hot Topics 28 Perspective Ontario’s Annual Rent Increase Guideline by Chris Seepe 30 Maintenance Don’t Flush Your Money Down the Toilet by Lorenzo Digianfelice 34 Insurance It’s a Stormy Situation by Andy Schwartze



18 Affordable, Sustainable Housing for All Policies and solutions to help end Canada’s affordable housing crisis by Erin Ruddy


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New construction in Vancouver, B.C.


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Q3 Investment Sales Activity Competition for available assets remains intense Canada’s third quarter investment sales activity has been brisk, continuing the record pace of 2018. Investors are looking to buy apartment buildings, the asset class with a reliable track record of healthy performance, including during economic downturns. “Competition between investors remains intense, with demand outdistancing the supply of properties for sale,” observes Keith Reading, Director of Research at Morguard, “Rental fundamentals remain healthy across the country, with rents steadily rising and demand outpacing available supply.”

Meanwhile, on the new construction side, activity has increased, with units being rented prior to or shortly after completion. A recent report by Urbanation reveals that the pipeline for new rental supply is currently 50 per cent higher than it was two years ago in the Greater Toronto Area—which is good news for renters and the apartment industry in general.

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Multifamily Assets Round out Canadian GRESB Data

Accordingly, based on data reported at the asset level, Canadian participants appear to carry more weight within GRESB’s residential property category than their numbers might suggest. For example, the energy intensity performance indicator is calculated only from information supplied from properties with 100 per cent data coverage, and 307 Canadian multifamily assets accounted for 6.2 per cent of those properties. Meanwhile, 16 per cent of all reported building certifications for management and operations were attained through BOMA BEST, a certification only available in Canada. Although Australia/New Zealand has consistently achieved the top regional score throughout GRESB’s 10 year history — this year with an average score of 80.9 — there is no asset-level information about energy intensity or building certifications for multifamily properties in the global region. In total, 41 portfolios collectively holding 2,107 assets valued at USD $242 billion underpin the 2019 score. In comparison, the 26 Canadian participants attained an average score of 76.6, surpassing the global average of 72. It’s more difficult to parse out the number of contributing assets from roughly 38,300 cited for the Americas region, which includes portfolios located in the United States, Canada, Mexico and Brazil. However, Canadian portfolios submitted energy intensity information for 2,247 individual assets versus 713 properties factored into that performance indicator in Australia/New Zealand.


ore than half of the major Canadian real estate portfolios participating in the GRESB global benchmark for environmental, social and governance (ESG) performance this year hold multifamily assets. Crossreferencing the list with Canadian Apartment’s Who’s Who 2019 survey, 13 of them collectively own and/or manage more than 1,000 rental apartment buildings encompassing about 76,500 units. Three others have a sparser complement that translates into an additional handful of buildings. The GRESB class of 2019 boasts: solely or primarily residential players, including Killam Apartment REIT and Minto Group; diversified portfolios with a significant share of multifamily, including HOOPP, QuadReal Property Group, GWL Realty Advisors, Concert Properties and BentallGreenOak (formerly Bentall Kennedy); and others with smaller stakes relative to their office, retail and/or industrial profiles, such as Triovest Realty Advisors, Fiera Properties, Manulife and Ivanhoé Cambridge. In total, more than 1,000 respondents, representing 100,000 individual assets across 64 countries, were benchmarked in this year’s assessment, bringing a fairly wide mix of portfolios under scrutiny. GRESB awards overarching continental scores, but the numbers and values of assets underpinning those scores vary considerably. “In the Americas, we have some gigantic portfolios,” Neil Pegram, GRESB director for the Americas, observed at the recent 2019 results presentation in Toronto.


| | September/October 2019 | 9


By The Numbers Insights from CMHC’s Regional Mortgage and Consumer Credit Trends report Each quarter, CMHC publishes regional reports and data based on Equifax Canada numbers. These reports offer in depth insight into the data on personal debt and credit provided by the Equifax database. From average weekly earnings to debt-to-income ratios, below are some highlights and key learnings from Q1 2019 for the five regions covered by CMHC—Atlantic, Quebec, Ontario, Prairies and British Columbia.

ONTARIO REGION “Higher monthly debt obligations for Ontarians were primarily driven by mortgage and HELOC growth coupled with higher interest rates. Nevertheless, delinquency rates remain low, supported by strong labour market conditions.” — Jordan S. Nanowski, CMHC Senior Market Analyst The share of delinquent mortgages has remained low The share of delinquent mortgages in Toronto (0.10%) and Hamilton (0.09%) remained stable and below the provincial average (0.14%) in Q1 2019. Ottawa (0.25%), which has one of the highest delinquency rates amongst Ontario CMAs, saw continued year-over-year improvement, albeit small (a decline of 0.01 percentage points). Strong labour market conditions in Ontario continue to contribute towards lower delinquency rates. The provincial unemployment rate is near the lowest it has been in decades and average weekly earnings continue to exhibit strong growth. As a result, borrowers are more able to make timely mortgage payments. Disposable income has been growing faster than total outstanding debt in Ottawa over the last two years; whereas Toronto and Hamilton saw the two grow at a relatively similar rate. A downward trending debt-to-income ratio in Ottawa 10 | Canadian Apartment | Part of the REMI Network |

contributed towards a narrowing of the gap in delinquency rates between Ottawa and Toronto/Hamilton. Mortgage delinquency rates trend down for lower mortgage limits Mortgage delinquency rates remained stable across most mortgage limits compared to Q1 2018. Delinquency rates for mortgages with relatively smaller limits at origination tend to be higher as first-time homebuyers with lower incomes and/ or less stable employment typically hold them. However, delinquency rates for these relatively smaller mortgages at origination continue to trend lower, significantly narrowing the gap between larger mortgages. This narrowing could be the result of a strong labour market having a larger marginal impact on the ability for relatively smaller mortgage holders to make timely mortgage payments.


BRITISH COLUMBIA REGION “Fewer British Columbians applied for new mortgage loans in the first quarter of 2019 due to rising interest rates and tighter mortgage rules. As a result, mortgage balances and monthly obligations became higher on average, and fewer HELOC loans were utilized. Despite a high level of indebtedness, consumers maintained high credit scores while keeping the delinquency rates low and stable.” — Pershing Sun, CMHC Senior Analyst Delinquency rates in Vancouver and Victoria remained low and stable In the first quarter of 2019, 0.13% of outstanding mortgages in Victoria were delinquent, up slightly from 0.12% in the first quarter of 2018. After stabilizing at or under 0.11% for the past six quarters, Vancouver’s delinquency rate also saw a slight increase from 0.11% in Q1 2018 to 0.12% in Q1 2019. The delinquency rate for both Vancouver and Victoria remained below the provincial level of 0.17%. The delinquency rates in Vancouver and Victoria have been experiencing steady decline since 2014 but have remained relatively stable at the level of 0.1% since Q3 2017. This is supported by economic fundamentals including strong employment and population growth, as well as low interest rates and appreciation of home values in all market segments. The recent slow-down in certain segments of the BC resale market, especially Vancouver, combined with rising interest rates, has contributed to a slower growth in the total number of mortgage loans in BC, contributing to the relatively steady trend of the delinquency rate in the two major regions in the province.

Mortgage delinquency rates of all loan ranges continued to be low while the share of delinquent mortgages with smaller loan amounts remained elevated in Vancouver The trend in mortgage delinquency rates across all mortgage limits at origination has been flat over the past four quarters in both Vancouver and Victoria after consistent decline since 2014, especially for mortgages with limits higher than $300k, where the rates remained at approximately 0.1%. However, in Vancouver, the delinquency rates of mortgages with limits between $100k and $200k increased from 0.12% in Q1 2018 to 0.14% in Q1 2019, and those with limits between $200k and $300k increased from 0.09% to 0.12%. Comparatively, delinquency rates of mortgage with limits at $100k$200 in Victoria remained relatively higher at 0.19%, coming down from over 0.2% in the past three quarters. Both regions’ small mortgage loans continued to have the largest share of delinquency in Q1 2019. The delinquency rates of mortgage with limit lower than $100k in Vancouver is 0.19%, whereas Victoria’s largest share of delinquent mortgage occurred in those with limit between $100k and $200k.

PRAIRIE REGION “The decrease in average weekly earnings of Albertans, the downward pressure on house prices in Saskatchewan, and higher mortgage rates all contributed to increased delinquency rates in Prairie CMAs. However, average credit scores remained excellent despite the increases in delinquency rates and higher average monthly obligations.” — Christian Arkilley, CMHC Senior Analyst Mortgage delinquency rate rising in the Prairie region In Calgary and Edmonton CMAs, the shift in the composition of employment from oil and gas to services producing industries has resulted in shocks to income and contributed to the increase in the delinquency rate. The downward pressure in house prices and higher mortgage rates contributed to higher mortgage delinquency rates in both Regina and Saskatoon CMAs. The delinquency rate is, however, higher in the Regina CMA (0.65%) than any other CMA in the Prairies. Stable economic growth and an improvement in employment led to the lower delinquency rate (0.29%) in the Winnipeg CMA compared to the other CMAs within the Prairie region. In Edmonton and Saskatoon, the decrease in full time employment resulted in income instability and contributed to rising mortgage delinquency rates in these CMAs. The delinquency rate in the Calgary CMA increased to 0.35% from 0.34% the previous year, the lowest increase in the Prairies, as growth in employment helped to stabilize delinquency rate. Mortgage delinquency rates by loan origination are higher for loan amounts of less than $100K

In the Prairie region (except Edmonton), mortgage delinquency rates by loan origination amounts are higher for loan amounts of less than $100,000, with delinquency rates ranging from 0.36% for Winnipeg to 0.79% in Regina. In Calgary, mortgage delinquency rates by loan origination amounts were generally clustered around the average of 0.35%, with only loan amounts of less than $100,000 being above a 0.40% delinquency rate. The highest mortgage delinquency rate by loan amount for Edmonton was between $100,000 and $200,000 at 0.65%, while the lowest was between $300,000 and $400,000 at 0.43%. In the Regina and Saskatoon CMAs, the delinquency rate generally decreased as loan amounts increased, ranging from 0.79% for mortgages of less than $100,000 to a low of 0.4% for mortgages of $400,000 or more. The mortgage delinquency rates in various loan ranges were near the average delinquency rate of 0.28% in the Winnipeg CMA with the lowest delinquency rate between $200,000 and $400,000. | | September/October 2019 | 11


ATLANTIC REGION “Mortgage and credit trends varied across the Atlantic region, with activity impacted by higher interest rates. Nonetheless, consumer delinquency rates remain low.” — Chris Janes Senior Analyst Delinquency rates in Halifax edge downward in Q1 2019 While delinquency rates have gradually gone up in St. John’s since 2014, rates in Halifax and Moncton have trended downward in recent years. Flat economic conditions likely impacted the year-over-year increase in delinquency rates in St. John’s. In Halifax, strengthening employment levels likely contributed to greater financial stability, supporting lower mortgage delinquency rates, while rates were slightly higher in Moncton.

Delinquency rates for most mortgages in Halifax remain below half of one percent Mortgage delinquency rates for all price ranges continue to trend downwards or remained flat year-over-year. Although population growth has been expanding Halifax’s labour force in recent years, employment levels remained stagnant. In recent quarters however, economic conditions strengthened, with employment growth concentrated in full time jobs. With strong resale demand and new listings remaining low, the amount of time a home spent on the market has been declining across all Halifax submarkets. For delinquent homeowners, these market conditions may have been favourable if forced to sell.

QUEBEC REGION “In the first quarter of 2019, mortgage delinquency rates remained stable and relatively low in Montréal and Québec. That said, monthly obligations on debt backed by a real estate asset were on the rise in these urban centres.” — Mbea Bell, CMHC Economist Mortgage delinquency rates remain stable and relatively low in Montréal and Québec The mortgage delinquency rates remained stable and relatively low in Québec’s two largest urban centres. In the first quarter of 2019, the rates were 0.30% in Montréal and 0.29% in Québec— levels similar to the Canadian average (0.30%). Economic growth and employment growth have been particularly strong over the last two years in Montréal and Québec. This likely contributed to the financial stability of households and their ability to make their mortgage payments on time (or less than 90 days late).


Mortgage delinquency rates stay relatively stable in Montréal, regardless of the mortgage limit at origination Following a period of gradual decline, mortgage delinquency rates in Montréal remained stable over the 12 months to the end of the first quarter of 2019. This stability was observed for all mortgage limits at origination. The delinquency rates of mortgages with limits lower than $100,000 in Montréal stayed slightly below the rates for the other mortgage categories. According to Equifax data, a mortgage is considered “originated” not only when a new loan is granted but also when an existing loan is renewed with another lender or when a refinance loan is made. As such, the value at origination is not necessarily the same as the original loan value. CONTACT Michael Gnat Phone: 416-635-4835 Email:

12 | Canadian Apartment | Part of the REMI Network |

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.


diversified construction 24 hour emergency service 416.524.3000 Email:



The key to unlocking higher cap rates by Roman Bodnarchuk, Founder and CEO, Sociable Living For investors in Canada, owning and renting out multifamily properties is not the same capital building enterprise that it used to be. Although vacancy rates are decreasing, with a national average of 2.4 per cent in 2018 and rates much lower in larger cities like Toronto and Vancouver, cap rates are also being driven down, with multifamily homes offering the lowest rates in real estate. Typically, a cap rate of between 7 to 10 per cent was seen as a good return on investment. In Canada, investors can expect to see cap rates that do not exceed 5 per cent, due to the relative low risk of the investment and the rising cost of living. When selecting a rental property, investors need to start considering new options to unlock higher cap rates in a saturated market. One viable option for investors, which is gaining traction across larger, densely populated cities, is co-living.

14 | Canadian Apartment | Part of the REMI Network |


What is co-living? The concept of co-living is not new, although it has popularized over the past few years. It offers residents a private, furnished bedroom with access to shared communal spaces, such as the kitchen, bathrooms, common living room and outdoor space. Unlike traditional apartments, co-living tenants pay one monthly bill, which includes rent, all utilities, cleaning services and basic common provisions such as towels, kitchen supplies and other necessities. Because of the allinclusive nature of co-living, it is seen as being similar to a hotel stay, although the duration is longer, typically on a 6-month lease. Co-living also sets itself apart by building communities and relationships among tenants. By taking away the pain points of living with others — such as cleaning — it allows tenants to bond with one another. Roommate selection is highly strategic and done through meticulous algorithms that place an emphasis on common interests, goals and living styles to maximize compatibility. Community events usually occur regularly in co-living homes as well. Birthdays, barbecues and other social activities are often planned to give members a chance to interact and take advantage of what their city and community offers. For this reason, co-living is frequently used for newcomers or for people looking to build their network. With an increase in remote and freelance workers, co-living can fill in the gap socially and can offer shorter leases to entice people who may move frequently for work. The difference between co-living and other rental properties Similar to multifamily rentals, in co-living homes, there are multiple leaseholders involved. The difference is that each leaseholder occupies a single room, and there are multiple leases in one home. This takes the stress off of the tenant, as their lease is separate from their roommates and will not be impacted by others moving out. It also helps investors, as they can charge per room, resulting in a higher yield on the property overall. To promote higher rental rates, co-living homes need to be newly renovated and modern. High-end appliances and furnishings are investments and will help raise the prices of each room. This is important because co-

Co -living is the key to an evolving industry where renters are expecting more and are willing to pay for these luxuries.

living homes also require the investor to pay for expenses that traditional multifamily homes would not, such as internet, cable and other amenities. Individuals who are looking for convenience are willing to pay a premium for their room in a co-living home, as they are offered more amenities than a traditional bachelor or one bedroom apartment. This can yield up to 40 per cent more than a traditional rental price, while still offering residents around a 20 per cent discount to living alone. Building for co-living There are many different models for co-living houses. Some take existing townhomes and renovate them to suit co-living needs, while others take large houses and rent rooms out individually. Some operate in condos, using threebedroom units or entire floors to create

a space for co-living. Whichever way the co-living space works, there are some important elements needed to create a luxurious space that will appeal to tenants. In general, co-living homes are made up of a minimum of three bedrooms and three bathrooms. They also typically only have one kitchen in them, and as the kitchen is the most expensive room to renovate, this helps to bring costs down. Some properties boast further amenities; rooftop patios with city views, workout rooms or offices all help add value to the property and will help to yield higher return. When building for co-living, considering the needs of the tenants is key, including amenities outside of the house. Proximity to city centres, transit and a vibrant community will help newcomers feel at ease in a new city. To create the community aspect of coliving, many co-living providers are looking

| | September/October 2019 | 15


to invest in multiple homes in a close radius. With the extra elements involved in managing a co-living facility, this helps the efficiency of running the operation. This will also help foster a sense of community outside of the house. On top of that, there is the expectation that events will be planned for all of the co-living members. Whether this is a monthly or weekly endeavor is up to the provider, but social events help individuals meet each other, which will help them feel

comfortable and encourage them to stay in a co-living home. Managing a co-living home Although owning and managing a co-living property can seem daunting, many co-living homes operate in a similar way to hotels. Traditionally, there are those who own the co-living buildings, but the property management is outsourced to co-living facility management experts. The building

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16 | Canadian Apartment | Part of the REMI Network |

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owner will enter into a long-term management agreement with a co-living provider, which could last multiple years, where rent and income is shared among the owner and provider. Unlike rental agreements, management agreements take the stress off the building owner to select tenants, run events, worry about utilities or invest in furnishings. It will ensure consistent revenue and high rents for the property, without the overhead costs. The co-living provider may renovate the home to increase rental value, which also increases property value for the building owner. Also, the nature of co-living ensures that the property manager retains rights to go to the property and inspect it regularly. This ensures that the tenants act respectfully to each other and to the space. For real estate investors, this management system alleviates the stress of having to invest the time into creating a functioning co-living environment. With vacancy rates and cap prices decreasing, it will be important for building managers and owners to look at alternatives for increasing revenue on rental properties. Coliving is the key to an evolving industry where renters are expecting more and are willing to pay for these luxuries, without putting the burden on building owners and investors.

Roman Bodnarchuk is the founder and CEO of Sociable Living, Canada’s first co-living community, located in Toronto. After spending several decades buying, renovating and creating rental homes across the globe, Roman turned his passion for connection into a business that solves both the affordability crisis affecting major cities and the issue of urban isolation.

Yes, we can! Since MetCap Living established itself as a leader in property management, we have routinely been asked one, simple question; “Can you help us run our property more effectively?” And, for well over thirty years, the answer has remained — Yes, we can! Our managers are seasoned professionals, experienced in every detail of the day to day operations and maintenance of multi-unit rental properties. From marketing, leasing, finance and accounting, to actual physical, on-site management, we oversee everything. We concentrate on revenue growth, controlling expenses, and strategic capital investment in your property to maximize your profitability over the long term — when you’re ready to discuss a better option; we’ll be there. You can count on it. Kazi Shahnewaz Director, Business Development Office: 416.340.1600 x504 C. 647.887.5676

| | September/October 2019 | 17


Policies and solutions to help end Canada’s affordable housing crisis


By Erin Ruddy

Throughout September and October, hopeful federal candidates criss-crossed the nation making bold declarations about future reform, and despite the many issues debated and contested, housing—yet again—emerged as a hot-button issue for citizens and industry stakeholders alike.

| | September/October 2019 | 19


From Charlottetown to Vancouver, and virtually every city in between, inadequate housing supply has reached critical levels. Year-after-year, words like “crisis” and “severe deficit” have been used to describe the dearth of affordable housing in our cities — yet here we are in 2019, still looking for solutions. In Ontario, some positive headway has been made. A recent report by Urbanation revealed that the pipeline for new rental supply is currently 50 per cent higher than it was two years ago. This progress, according to the Federation of Rental-housing Providers (FRPO), is a direct result of recent legislative changes implemented by the Ford government. “The removal of rent control on new projec ts completed af ter November 15, 2018, was a great first step to restoring confidence and encouraging investment in purposebuilt rental,” said Tony Ir win, FRPO president and CEO.

“The massive grow th in applications can hardly be a coincidence.” But even with this pipeline of new units in the works, will there be enough affordable housing options for everyone? As Canada’s population grows, immigration soars, and housing patterns shift, the pool of renters is only getting bigger. Policy changes that incentivize rental housing development, and programs that make investing in energy retrofits more viable, are critical to maintaining the flow. “Renters need increased confidence that private sector rental housing providers — the single largest cohort of rental housing providers in the country — will be better positioned to enhance the existing rental stock and undertake the significant risk and investment necessary to build much needed supply of new secure purpose-built rental housing,”

“The removal of rent control on new projects completed after November 15, 2018, was a great first step to restoring confidence and encouraging investment in purpose-built rental.” - Tony irwin

Built Green Canada Launches High Density Renovation Pilot On October 1st, Built Green Canada announced the launched of its High Density Renovation Program pilot with four projects underway, courtesy of Strategic Group’s office-to-residential repurposing projects in Calgary and Edmonton. As the cost of entering the housing market continues to make home ownership a challenge, statistics show that a growing number of Canadians are turning to multifamily apartments as an affordable option and lifestyle choice. This underscores the reality of Canada’s aging housing stock: new housing represents only a small percentage of what’s out there. As Canadians and all orders of government are increasingly focused on climate mitigation, there is huge opportunity to reduce greenhouse gas emissions and strengthen the economy through energy-efficient retrofits of older homes and buildings. A study by CMHC revealed that older homes are the source of significantly more greenhouse gas emissions than newer homes.

20 | Canadian Apartment | Part of the REMI Network |

Alongside Built Green’s Single Family Renovation Program (which is also applicable to multifamily low rise), the High Density (HD) Renovation Program offers builders a means to renovate high density and high density mixed-use buildings more sustainably. According to Built Green Canada, these certified renovations benefit not only the environment but also the owners and occupants who will, as a result, enjoy a healthier, more durable, and more affordable home through a reduction in the operating and maintenance costs. To qualify for the HD Renovation program, substantial upgrades/ retrofits must be made to the energyrelated building systems, including the building envelope and the mechanical and electrical systems. The energy performance of the building’s upgrades and retrofits are then compared to the requirements of the current energy standard or energy code used for modeling with ASHRAE 90.1-2010 or NECB 2011 to show energy savings resulting from the renovation. Beyond

efficiency, the renovations must be sustainable. “Considerable time was spent contemplating how energy performance improvements would be quantified, given the multiple scenarios that renovations may present—we’re keen to work closely with industry to ensure we have guidelines that are appropriate, relevant, and fair,” said Built Green’s CEO Jenifer Christenson. “Moreover, the program encourages a myriad of sustainable practices, including the reuse of building materials, as we recognize the reduced environmental impact, and therefore credit may be claimed through material usage and waste reduction.” As with Built Green’s other thirdparty certification programs, the High Density Renovation Program takes a holistic approach and maintains the same seven categories, including: energy efficiency, materials & methods, indoor air quality, ventilation, waste management, water conservation and business practices.


said David Hutniak, CEO of LandordBC. “We need action now! The stakes are very high.” Underscoring this urgency, the Canadian Federation of Apartment Associations (CFAA) has been lobbying for key reforms since January, in hopes that some, if not all, their proposed changes would find their way to the forefront of the parties’ election platforms. “To varying degrees, all the parties support more rental housing development by the private sector, especially where it is needed,” said John Dickie, President of CFAA. “Similarly, each party also understands the impact rental industry costs have on rental supply and affordability.” As such, CFAA’s proposals were pitched as ways to increase housing supply in order to improve housing affordability. Some of the proposed reforms were linked to the environment, given it’s such a key issue for all. “We always need to be selective about what we ask for, since the finance officials are opposed to any sweeping reforms that would cost the federal treasury substantial amounts of money,” said Dickie. “However, various modest changes would improve the situation for many rental providers, and thus increase rental supply, addressing housing affordability.”

Barron Building, Calgary In the summer of 2019, Strategic Group completed its first office-toresidential repurposing project in Calgary—a mixed-use building with 65 one- and two-bedroom suites in the inner-city community of the Beltline. Over the next year, Strategic Group will complete three more repurposing projects in Alberta. One of those is the iconic Barron Building in downtown Calgary. When it opened in 1951, it was Calgary’s first high-rise at 12 storeys. It marked a significant turning point in the oil and gas industry and was a symbol of Calgary’s economic, social and political growth.

For CFAA, those changes include: 1. Taking advantage of the move-up effect by reducing the GST/HST charged on new rental construction. 2. Gaining active business tax treatment for rental providers to allow some deferral of recapture on sale and reinvestment, to allow investors to access the standard corporate tax rate (rather than the current high rate, which is close to 50 per cent in most provinces), and to allow small corporate landlords to access the small business tax rate. 3. Clarifying and expanding the ability to claim expensive building improvement work as repairs (rather than capital improvements), even though the work provides a better item at the building than the item that was replaced (i.e. replacing mid-efficiency boilers with high efficiency boilers). Expanding on this list, in late September, LandlordBC addressed “All Federal Parties” in a public blog post itemizing the action steps it hoped Canada’s incoming (or re-elected) government would undertake. The list includes: maintaining funding for the Rental Construction Financing Initiative (or introducing an equivalent stimulus for purpose-built rental construction); working with the provinces to reduce regulatory barriers; funding the Portable Housing Benefit to

The 85,223 square foot office building is being repurposed into a mixed-use space with retail and 94 rental residences. Honouring the legacy of the Barron Building is an important component of this repurposing project. The company is preserving the art decostyled exterior while building modern residences inside. “Our leadership in office-to-residential repurposing is grounded in an appreciation for environmental sustainability in addition to the economic, business and community benefits we realize with this strategy,” said Riaz Mamdani, Strategic Group CEO. “The high density renovation program offers the consistency and clarity that Built Green’s other programs have around process, areas of focus and options available. Our creative and unconventional approach to create great places for people is supported by our partnership with Built Green.” “Built Green recognizes the leadership of those progressive builders and developers who are leading by example in the built environment: their commitment to forge ahead and establish new ways of doing things is setting standards that others can aspire to and contributing to innovations within the industry,” added Christenson. Built Green Canada, a national, industry-driven, nonprofit organization offering third-party certification programs for those interested in sustainable practices in the residential building sector, welcomes industry’s continued input during this pilot phase. Visit Built Green Canada for more info.

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Happy Housing Outcomes A look back at federal initiatives offered through the National Housing Strategy that have helped spur some innovative new rental-housing developments: 1. Affordable Housing Innovation Fund: “Funding for unique ideas and innovative building techniques that revolutionize the affordable housing sector.” Project: The 220 Terminal Avenue development in Vancouver, comprised of 40 moveable modular units that form a three-storey building. The housing units can be separated and moved to vacant land, as land needs change. 2. Rental Construction Financing: “Low-cost loans encouraging the construction of sustainable rental apartment projects across Canada.” Project: The Sawyer Block, a new 60-unit affordable rental development coming soon to Victoria, B.C. The building is comprised of microsuites, geared towards workers in the technology and service sectors, with units ranging in size from 285 square feet for studio apartments to 358 square feet for one-bedroom homes. 3. Federal Lands Initiative: “Surplus federal lands and buildings that are sold at a discounted rate for the purpose of creating affordable, sustainable, accessible and socially inclusive developments.” Project: 26 Grenville St. and 27 Grosvenor St., purchased in April by Toronto developers Greenwin Inc. and Choice Properties REIT for a two-tower development containing 700 purpose-built rental units—30% of which will be maintained as affordable rental housing for a period of 40 years.

target those in greatest need; offering programs to assist with the cost of energy retrofits and the adoption of energy-saving technologies; holding the line on income taxes and capital gains taxes, and more. In the weeks leading up to the October 21st election, we took a close look at each parties’ official website to compare platforms and determine whether any of the parties had been listening. Here are some of their housing strategies put forth at the time: Liberal Justin Trudeau’s Liberal Party has developed a $55-billion plan to build 100,000 affordable housing units over the next decade. Its housing mandate is to “make it easier for Canadians to find an affordable place to call home.” In addition to launching the new First-Time Home Buyers incentive earlier this year, moving forward, the Liberal Party says it will support rental development by increasing the new residential rental property rebate on the GST to 100 per cent, eliminating all GST on new capital investments in affordable rental housing. This, it says, will provide $125 million per year in tax incentives to increase and substantially renovate the supply of rental housing across Canada. Conservative Conservative Leader Andrew Scheer has pledged to ease regulations in order to “help get new homes built.” At a press conference on September 24th, Scheer announced he would repeal Justin Trudeau’s tax increases on small business owners, while cutting unnecessary red tape. His government is proposing a “4-point plan” to make homeownership more affordable, which includes “fixing” the prohibitive mortgage stress test and making surplus federal real estate available for development to increase the supply of housing. Scheer has also stated that, if elected, his party will implement a green homes tax credit to help pay for energy-saving renovations. New Democrat Exceeding the Liberal Party’s goal of 100,000 new affordable units, NDP leader Jagmeet Singh has pledged to build 500,000 units in the same 10-year timeframe. The party also plans to abolish the federal portion of the GST/HST for those constructing new affordable units. Additionally, it would reintroduce 30-year terms to mortgages insured by CMHC for first-time buyers and give “low-interest loans repayable through energy savings” to retrofit outdated properties. Green The Green Party, led by Elizabeth May, has promised to build 25,000 new affordable units and renovate 15,000 more in the next ten years should it be elected. It would also restore tax incentives for building purpose-built rental housing and provide tax credits for gifts of lands (or buildings) to be used for affordable housing. Other plans include: making housing “a legally protected fundamental human right for all Canadians”; appointing a Minister of Housing to oversee the National Housing Strategy; increasing the National Housing Co-investment Fund by $750 million for new builds and the Canada Housing Benefit by $750 million for rent assistance for 125,000 households. The party also plans to finance building retrofits through direct grants and zerointerest loans, and re-focus the core mandate of CMHC to support the development of affordable, non-market and cooperative housing.

22 | Canadian Apartment | Part of the REMI Network |

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| | September/October 2019 | 23


Smart, Life-Saving Solutions Fire safety tips and best practices from Michael Hugh, Field Sales Engineer at Johnson Controls Apartment fires in Canada are still all too common, despite the steeper fines for Fire Code infractions and persistent efforts by authorities and building stakeholders to mitigate fire hazards through education and emergency preparedness. As technology advances and buildings become better equipped to detect, contain and alert occupants of a pending hazard, the prevalence of fire-related tragedies are diminishing. Even older apartment buildings can benefit from new and improved technology.


iven October is National Fire Prevention Month, we reached out to Michael Hugh, Field Sales Engineer, Johnson Controls about smart, responsive fire systems and best practices for mitigating fire hazards in multi-residential buildings. How has smart technology helped improve fire safety? Smart technologies, such as integrated fire detection systems and sensors, can help

24 | Canadian Apartment | Part of the REMI Network |

improve fire safety within apartment buildings by communicating emergencies with occupants who could be impacted. Building codes require smoke alarms to be installed in each apartment unit, which provide a localsounder to alert occupants of smoke or fire in the individual space. Modern-day fire alarm systems offer the option to replace traditional smoke alarms with individual “smart” smoke sensors. These sensors can serve each individual unit, but when connected to the building-wide fire alarm system, other

building occupants – like residents, building managers and superintendents – could be notified in the event of an emergency. These smart sensors can also identify carbon monoxide. CO is highly lethal, but because it is invisible, tasteless and odorless, it can be left unrecognized. When CO is detected in a unit, the building-wide fire alarm system can notify unit residents and building management, who could then take necessary actions to resolve the issue. This kind of system operation may provide a greater level

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of safety, especially for occupants who may face mobility challenges. When emergencies occur, it is crucial that integrated systems communicate to one another in all areas of the building, including fire alarm networks, mass notification systems, emergency lighting and HVAC controls. What are some key steps all apartment owners/managers must take to prevent fires from spreading? Fire safety begins with initial detection through the use of integrated systems. By connecting the building’s fire alarm network to all other technologies, each individual system is able to monitor and maintain their own status. Rather than utilizing disparate alarms for each individual unit or space, integrated systems are able to communicate to one another and act on emergencies as soon as they happen. Mass notification and emergency communication systems can be connected with other systems, such as light sensors and HVAC sensors, to assist occupants as they navigate their way out of the building

safely while alerting emergency response teams. This results in faster reaction times, ultimately saving lives and building assets from further destruction. What are the most common sources of apartment fires? According to the National Fire Protection Association (NFPA), cooking is the number one cause of apartment fires. Other sources of apartment fires can range from unattended fires, like candles and smoking, to arson. While fire safety education is key in preventing these types of fires, an integrated fire and life safety infrastructure can help. Should an emergency occur, sensors integrated with a mass notification system can alert occupants and use real-time insights to guide them to a safe location. When connected with an emergency communications system, local first responders can be notified immediately, reducing response times. Is technology moving in a direction that fires in multi-residential buildings will someday become a thing of the past?

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To say fires in multi-residential buildings will become a thing of the past is hard to predict; but, integrating fire and life safety solutions with additional building systems – like HVAC controls – can help reduce the spread of fires and improve emergency response times. Additionally, with the implementation of artificial intelligence (AI) and machine learning, predictive analytics can be useful in determining more efficient evacuation routes. For example, when a fire erupts and first responders react, the information provided by integrated building systems can help determine how, or if, occupants are evacuated out of the building. Has there been one innovation in particular that has significantly raised the bar on fire safety? Integrated fire and life safety technologies have enhanced fire safety within multiresidential buildings, but without the National Fire Code of Canada – a legal requirement and comprehensive reference guide for property owners and managers – buildings could be left vulnerable to life safety threats. The Fire Code is continuously improving safety standards to keep up with advancing technologies and ensure property owners are fulfilling testing and inspection requirements for the various fire and life safety features within their building. This includes, but isn’t limited to: fire sprinkler systems, fire alarm systems, fire extinguishers and emergency lighting. Modern fire alarm systems retain historical data, which can serve as an electronic record of when fire alarm inspection companies have completed the work they professed to have done – and likely charged for. When a service team claims that they have tested every fire alarm detection device in the building, the log should have retained an entry for every one of those tests. For property owners who are liable if Fire Code requirements are not fulfilled, this data collection serves as a comprehensive record of when maintenance or inspections have been performed. This provides owners with greater insight into when another inspection will be required or when a sensor may need replacing, resulting in proper code compliance and safer, more efficient facilities.

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Ontario’s Annual Rent Increase Guideline How is it determined…and is it fair? by Chris Seepe Most residential landlords would say without hesitation that the annual rent increase guideline does not fairly reflect the true cost of operating a residential rental property in Ontario — but is that really true? Very few people, it turns out, know how the guideline is actually determined.


ection 120 (2) of Ontario’s Residential Tenancies Act, 2006 (RTA) states that the annual rent increase guideline is determined by averaging the monthly Ontario Consumer Price Index (CPI) over a twelve-month period that ends at the end of May of the previous calendar year. Statistics Canada (StatsCan) created the ‘Canadian CPI Basket of Goods and Services’ used to generate the Consumer Price Index (CPI) and inflation rates. It selected basic items that every consumer typically buys annually. Each category is assigned a weighting out of 100 that reflects ‘an average Canadian’s percentage of wallet’. The basket’s categories are updated every four years while the weightings are updated every two years. The Quick Canadian Basket Overview is shown on the following page. The detailed basket comprises more than 260 items. (Note: a total difference from 100% is due to fractional rounding errors.) According to these numbers, both “Shelter” and “Food” dropped between 1992 and 2015 – although the public’s perception is that food and shelter have risen substantially. Meanwhile, transportation has the largest increase in percentage of wallet costs. Recall that these numbers don’t reflect the cost of something but rather what percentage of a consumer’s total budget is expended on the category. Presumably then, even though Food prices may have increased,

28 | Canadian Apartment | Part of the REMI Network |

StatsCan is reporting that the average Canadian is spending less on food and shelter relative to transportation and recreation. That seems counterintuitive—although perhaps fluctuating oil prices or public transit costs might have more impact than one might realize. StatsCan’s Shelter numbers didn’t add up to 26.8%. ‘Rented Housing’ added up but the ‘Owned Housing’ category didn’t, nor did adding together the two housing subcategories. I was unable to reconcile the Shelter weightings versus affordable housing crisis statements made by Canada Mortgage and Housing (CMHC), StatsCan and various levels of government and the media. How can the ‘Rent’ subcategory be 5.7% of an average consumer’s annual expense spending? No matter what assumption you use, this number makes no sense. CMHC’s national average rent for a two-bedroom unit in a purposebuilt rental building is $989/month ($11,868/year). If this represents 5.7% of the total money spent on expenses, then the ‘average’ Canadian is spending $11,868 a year (5.7% = $208,210) annually on expenses. StatsCan’s webpage on Shelter Costs reports that about 3.3 million households (25.2%) spent 30% or more of their total income on shelter. That means that 25.2% of households have an average income of $39,560 ($11,868/year / 30%), which seems believable.

PERSPECTIVE >> BASIC BASKET OVERVIEW CATEGORY Food Shelter Household Operations, Furnishings and Equipment Clothing and Footwear Transportation Health and Personal Care Recreation, Education and Reading Alcoholic Beverages and Tobacco Products

1992 2015 18.0 16.4 27.6 26.8 10.4 13.1 6.8 6.1 17.2 19.1 4.4 4.7 10.2 10.9 5.5 2.9 100.1 100.0

DETAILED CANADIAN CPI BASKET OVERVIEW: SHELTER 2015 Category 2: Shelter 26.8 Rented housing 5.9 Rent 5.7 Renter’s insurance premiums 0.1 Renter’s maintenance and other expenses 0.1 Owned housing 16.4 Mortgage interest cost 4.1 Homeowners’ replacement cost 4.6 Property taxes 3.5 Homeowners’ home and mortgage insurance 1.4 Homeowners’ maintenance and repairs 1.3 Other owned accommodation expenses 1.6 Water, fuel and electricity 4.6 Electricity 2.5 Water 0.7 Natural gas 1.1 Fuel oil and other fuels 0.3

I couldn’t find any statistics on what percentage of residential tenants pay their own electricity, but we can assume the percentage is likely very high. Arguably, all rented condo units and most single family homes would require the tenant to pay for all their utilities. This significant cost is not reflected in the ‘Rented Housing’ subcategory. However, the basket does account for renter’s (or content) insurance, but according to StatsCan only 41.8% of renters have content insurance. How can this amount be an average of all consumers? These are just a few examples of how the CPI Basket of basic expenses bears no correlation to the reality and true costs of tenant rent and shelter expenses, and landlord residential rental property operating expenses. How can such an economic mechanism then be employed to determine the fair annual rent increase? The CPI Basket, as it is structured and used today, is not accurate as an economic device to determine fair annual rent increases. Rent increases are necessary and no different than increases in any other product or service. Profit is needed to re-invest in properly maintaining rental property health and safety standards, to incentivize builders to create additional residential rental housing, and to encourage investors to purchase and operate private sector residential rental properties. Financially strangling residential landlords serves no one’s purpose. Chris Seepe is a published writer and author, ‘landlording’ course instructor, president of the Landlords Association of Durham, and a commercial real estate broker of record at Aztech Realty in Toronto, specializing in income-generating and multi-residential investment properties. (416) 525-1558 Email; website:

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Don’t Flush Your Money Down the Toilet Why SI-Toilet Sensors make sense by Lorenzo Digianfelice It is estimated that, at any given time, approximately 20 to 25 per cent of all toilets in North America are experiencing leaks, which is the number one cause of water loss in multi-unit residential buildings resulting in the loss of billions of dollars in Net Operating Income (NOI) each year.

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oilet water usage in apartments and condominiums accounts for 34% of total water consumption. With toilet leakage contributing an extra 8%-10% on top of that, almost half of all water consumed by residential tenants comes from toilet usuage. Just one leaky toilet can waste up to 20 cubic metres a day or up to 600+ cubic metres a month, costing approximately $80 and $2,400 respectively depending on the size of the leak. Calculate those losses over one year, and one leaking toilet can account for upwards of $30,000. Multiply these dollars by 20 per cent of your total number of units, and you can understand the impact water leakage has on your assets, NOI, and your capitalization rate. With so many multi-unit residential buildings still equipped with older and more traditional toilets, water leak detection becomes that much more critical as older components begin to degrade and malfunction over time. However, even buildings that have had their bathrooms retrofitted with newer water efficiency toilets still experience new toilet leaks. The undetectable damage Water damage as a result of leaking and flooding, continues to be a major source of financial loss for commercial and residential property owners. As dwellings and infrastructure continue to age, so does the potential for plumbing, toilets, and waterlines to break down. The problem with leaky toilets is that they are often undetectable, and as a result, can cost home and property owners thousands of dollars monthly. While some toilet leaks are truly undetectable, tenants seldom report minor toilet leaks to management for a number of reasons. Firstly, tenants do not typically feel a sense of ownership for their apartments, and secondly, tenants do not pay for their water usage. Similar to our current health care system, neither patients nor tenants ever see their medical or their apartment utilities

bills so they remain unaware of their water consumption footprint. How do we address and fix this problem? In residential, multi-unit apartments, trained professional maintenance workers may be able to conduct regular buildingwide toilet inspections, however, this type of intervention is extremely costly. It is also an inefficient use of time and a major disruption to tenants. We already know that many leaks are undetectable, therefore, simple inspections may not uncover silent leaks. More comprehensive inspections and testing are cost prohibitive as well as time consuming. Furthermore, and perhaps most importantly, because toilet leakage can begin at any given moment, inspecting tenants’ toilets even once per month may not necessarily guarantee that those same toilets that do not appear to be leaking today won’t be leaking tomorrow. Alternatively, and depending on your budget, you can choose to make a rather substantial capital expenditure to replace all your tenants’ toilets, however, this still does not address the potential for leakage or even poor installation. Detecting the undetectable Standard toilets have many different components that may cause leakage, making it that much more difficult to detect and accurately diagnose. The most efficient and cost-effective way to monitor and detect leaks in toilets in multi-unit buildings is to install toilet leak sensors in each bathroom. Sensory Industry detectors (SI Toilet Sensors) immediately detect leaks and transmit real-time alerts to any contact of your choice through mobile devices, emails, or pagers. Sensory Industry detectors track, measure, record, analyze and then alert

“FLOWIE-O” AND “SHUTTIE” Expanding on its leak-detection devices, “Flowie” and ”Floodie”, Waterloo-based tech company Alert Labs announced it has launched two new water-tech products: Flowie-O and Shuttie. While Flowie-O connects to both outdoor and indoor water meters, examines water use patterns and sends alerts to the owner’s phone when something unusual occurs, Shuttie is an automatic shut-off valve that will prevent water damage at the source. Using Shuttie, property managers have the flexibility to remotely shut off water based on information received in the alerts, or it can also shut off water automatically for maximum protection and cost savings. Both Flowie-O and Shuttie connect to the internet via the cellular network, so they will continue to work during power outages, unlike WiFi devices. For more information, visit:

your designated contact person in realtime. This immediate detection is the only way to effectively, efficiently and proactively manage each of your buildings’ toilets to minimize the unforeseen costs of toilet leakage. Until now, there has not been any comparable, cost-effective solution to track and notify property owners of water leak loss. SI-Toilet Sensors are the ultimate solution to this problem potentially saving you thousands of dollars monthly and even hundreds of thousands of dollars throughout your portfolio in net operating income.

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Industry Hot Topics RioCan completes purchase of eCentral in Toronto


n September 26, RioCan announced it had completed the acquisition of the apartment and retail components at ePlace, a large mixed-use development located at the northeast corner of Yonge and Eglinton in Toronto. The purchase price of $114.1 million was determined based on cost plus $10 million for the apartment component, eCentral, and a seven per cent cap rate on the stabilized NOI for the retail component. “This acquisition represents another important step forward in our transformation to a major market, mixed-use focused REIT,” said Ed Sonshine, the chief executive officer of RioCan. “RioCan recognizes the thriving, transit-oriented intersection of Yonge and Eglinton has significant income and value growth potential and we are well-positioned as the dominant landlord in the area.” Residential leasing commenced at eCentral in December 2018 and is progressing ahead of both schedule and anticipated rental rates. As of Sept. 26, 72 per cent of the units had been leased at an average monthly rent of $3.88 per square foot for market rent units. The 705,000-square-foot mixed-use development is comprised of 22,000 square feet of retail space; eCondos, a 58-storey, 623-unit fully sold-out condominium tower; and eCentral, a 36-storey, 466-unit rental residential tower. As of October, retail leasing at ePlace was essentially complete with leases in place for a flagship TD Bank and food service tenants. The development will have direct underground access to both the Yonge/University subway line and the future Eglinton Crosstown LRT. Adjacent to the retail space in ePlace, and across the

street from Yonge Eglinton Centre, eCentral residents will have access to extensive retail and service options. “ePlace joins, among others, Yonge Eglinton Centre, Yonge Sheppard Centre, King Portland Centre and The Well, all in Toronto, Ontario, as part of RioCan’s expanding portfolio of dynamic mixed-use urban assets,” Sonshine said.

SmartCentres and Greenwin join forces on new Barrie development


martCentres REIT and Greenwin Inc. announced that they have entered into a 50/50 joint venture to develop a 7.8 acre lakefront property located in Barrie, Ontario. The multiphase rental apartment community will be comprised of over 2,000 residential units when it reaches completion, bringing much-needed relief to the city’s rental housing shortage. “We are very excited about partnering with Greenwin on this project in the thriving and growing city of Barrie. With direct access to the waterfront and close proximity to the GO station, we are confident that this residential development will be complementary to the City’s vision for its waterfront

and provide additional rental housing in Barrie,” said Mitchell Goldhar, Executive Chairman of SmartCentres. “It furthers our strategy to focus on revenue growth in sectors such as residential, seniors, office and self-storage,” added Mr. Goldhar. “We are very pleased to enter into this partnership with SmartCentres to create a landmark residential development in the city of Barrie,” said Kevin Green, President of Greenwin. “This development, comprising of over 2,000 residential units will add significantly to our development pipeline of over 5,000 new purpose-built rental units.”


Quebec’s largest mixed-use residential project breaks ground

Starlight acquires Toronto apartment portfolio


evimco Immobilier, the Fonds immobilier de solidarité FTQ and Fiera Real Estate have broken ground on the largest mixed-used residential project ever built in Montréal. Featuring two towers with a combined 1,750 residential units, the development is projected to cost more than $700 million. The first 57-storey tower will rise on the site of the former Spectrum de Montréal, in the heart of the Quartier des Spectacles. The project, announced in November 2018, has sold upwards of 75 per cent of the 438 condominium units in the first tower, and sales have now kicked off for the second 61-storey tower, which is comprised of 611 condos and 340 rental units. “The demand is there, and the real estate market is going strong, which is enabling us, with the help of our partners, to develop projects as distinctive and avant-garde as Maestria,” said Serge Goulet, President of Devimco Immobilier. “We are proud to be establishing a presence in this thriving artistic neighbourhood.” Designed in collaboration with the architecture firm Lemay, the project’s design is intended as a nod to the Quartier des Spectacles cultural district. Featuring two asymmetrical towers and an aerial walkway connecting the buildings at the 26th and 27th floors, residents will have a front-row view of Place des Festivals, the epicentre of this district that claims North America’s highest concentration of arts and culture, with museums, performance venues and galleries. “We are excited to be playing a role in the accomplishment of this flagship project, with its hugely strategic site and spinoffs that will benefit the entire Québec economy,” added Normand Bélanger, President and CEO of the Fonds immobilier de solidarité FTQ. “The two towers will rise on the skyline and become an emblem for the city, a symbol of real pride for Montrealers.”

n September, Starlight Investments announced it had completed the purchase of a Toronto portfolio comprised of 628 rental units spread across 12 properties and 19 buildings. Each building was constructed between 1925 to 1972, offering a variety of suite sizes with spacious layouts, modern kitchens and on-site laundry facilities. Located close to public transit and major highways, the properties are all walking distance to shops, malls, parks, and several primary and secondary schools. Other nearby amenities include public libraries and community centres. The properties will be managed by either Sterling Karamar or Greenwin Inc. They include: 74 Curlew Drive, 260 Gamble Avenue, 310 & 312 Lonsdale Road, 2040 Eglinton Avenue West, 5, 7 & 9 Stag Hill Drive, 327 Chisholm Avenue, 338, 340 & 342 Donlands Avenue, 580 The East Mall, 778 Broadview Avenue, 2029, 2035, 2041, 2049 & 2055 Victoria Park Avenue, 2367 Queen Street East and 2701 Eglinton Avenue West. “We are extremely proud of the acquisition of this portfolio,” said Daniel Drimmer, Starlight’s President and Chief Executive Officer. “The Properties represent Starlight’s commitment to offering rental living in the most sought-after neighbourhoods of Toronto. The acquisition of these nineteen buildings further enhances our presence throughout the city.”

Does your building have an Electrical Maintenance Plan?


tarting October 1, 2019, all building owners in Toronto are required to develop an Electrical Maintenance Plan with a Licensed Electrical Contractor. This plan should be ready and available upon request by a by-law officer no later than March 31, 2020. See “SMART IDEAS”, and visit for more info.

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It’s a Stormy Situation These days, insurers are doing the walking more often than their clients by Andy Schwartze As I wrote this article in early September, Hurricane Dorion had just leveled parts of the Bahamas. But the destruction didn’t end there. This isn’t a new phenomenon, of course. Hurricanes have been around forever, and their impact is just a matter of extremes.


n North America, the four weather events to see the biggest insurance claims are: forest fires, tornados, high water flooding and hurricanes. Weather is predictable, but not in any reliable way. Still, thanks to technology and apps like Windy, we are more informed than we used to be. Windy depicts real time information on wind directions and speeds all over the globe, and is a mesmerizing app to follow. But it can’t do much when it comes to addressing the balance sheets of insurance companies. In the past decade, water damage of all kinds has become a standard inclusion in 34 | Canadian Apartment | Part of the REMI Network |

commercial insurance contracts. In recent years “water infiltration” has become an addon to residential insurance policies. While fire and wind have always been insured, and their impact on the North American premium pool well studied and priced in, the expansion of water-related claims is still being absorbed and not yet fully calculated in to the rating structure. This tends to make property insurers a bit skittish and, indeed, recent developments have shown this to be true. In past articles we have alluded to the fact that there is a tightening of balance sheet capacity

available for insurance operations. BMO has announced that it is leaving the reinsurance sector, as the risk return ratio is just not good enough. Reinsurance is the big backdrop that supports retail insurers by expanding their capacity to take on risk. Without that, we would be buying many small capacity policies on every property risk that requires coverage over a few hundred thousand dollars. Shrinking reinsurance capacity is a warning sign that points to some tougher insurance underwriting. It doesn’t happen overnight but the wheels do turn, no matter how slowly.


Where this is going is pretty much obvious to see. Insurance contracts are annual in nature and either side can walk away at the end of the term. These days, it is insurers that are doing the walking more so than their clients. The latter are seeing substantial rate increases, with previously heavily discounted risks bearing the brunt. Condominiums, for example, are seeing juicy increases in their premiums after many years of having been able to beat down their rates. Highrise apartment buildings, many of whom have been the beneficiaries of the same insurance rate (per $100) for decades, are now being told to pay more. Older properties, that have been shabbily maintained, are often found struggling for an affordable insurance package. By the middle of July, the National Weather Center in the U.S. had recorded 1,000 tornados. Obviously, many of these were small ones not worthy of national

attention, but no one can argue that this isn’t a lot. As North American issues, they affect Canada every bit as much as the U.S. when it comes to the cost of insurance, which is spread throughout the insurance buying public. For our industry, it is a fascinating development as we watch water become a much larger part of the property insurance landscape. Fortunately, while the insurance market has, on occasion, snapped suddenly in a bad direction, it is an industry that generally develops new directions slowly. So, while we cannot point to any good news on the horizon, we don’t expect sudden and unexpected developments that shake everything up. But the underwriting world is wide awake and paying attention these days. To what extent the property insurance world will reinvent itself has yet to be seen. In the meantime, be sure to check out the Windy app!

Andy Schwartze, BSc., MBA, CIP, is an insurance broker specializing in property management and real estate. He can be reached at

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Smart Ideas

Be Safe, Not Sorry The risks of hiring an unlicensed electrician In early September, the tenants of 92 apartment units in Toronto faced serious risks after a general contractor failed to hire a Licensed Electrical Contractor (LEC) for electrical work as part of a large renovation contract. The general contractor hired to complete the full renovation of those units has since pleaded guilty to operating an electrical contracting business without a licence, and for failing to apply for inspection. The company was ordered to pay a $10,000 fine, plus a $2,500 victim surcharge.


adly, this isn’t an uncommon scenario. Despite Ontario’s law prohibiting general contractors from conducting electrical work without the proper licenses, cases like this continue to pop up. According to the Electrical Safety Authority (ESA), electrical fires typically result from shoddy circuit wiring, panel boards, and fuses. Outdated electrical systems in older stock buildings, like those deemed responsible for the fires at 650 Parliament St. and 60 Wellesley St., are also a huge concern. As these examples show, scrimping on electrical work and the failure to hire a Licensed Electric Contractor (LEC) can result in serious property damage—or even worse, loss of life. “You may know someone who can do the work cheaper, but consider the real cost if something went wrong,” warns Steve Smith, General Manager for Central Region, ESA. “Electrical safety is everyone’s responsibility, and general contractors and property owners alike should take great 36 | Canadian Apartment | Part of the REMI Network |

care in ensuring that renters in Toronto have a safe place to call home.” Taking the right steps Licensed Electrical Contractors bring numerous benefits that will bring both peace of mind and potential long-term savings to property owners. LECs are fully insured. They will arrange the permits and notifications required by Ontario law, and are qualified to perform the type of electrical work you require. They will offer an ESA Certificate (also required by Ontario law) and provide references. Before hiring an electrical contractor, Smith advises that property owners ask for their ESA-issued license number. This number should be printed on their business cards, estimates and vehicles. Also, make sure a permit has been taken out for the upcoming work, and request a copy of the ESA Certificate [of Inspection] once the electrical

work is complete. If you’re using a general contractor or other trade professional who subcontracts the electrical, be sure they’ve checked the status of the electrician working in your building/home. How to spot an unlicensed electrician: • They ask you to take out the permit with the Electrical Safety Authority; • They don’t have an ECRA/ESA license number on their work vehicle or estimate; • You can’t find the company’s name in the Find a Licensed Electrical Contractor Near You tool on the ESA website; • They do more than just electrical work— including drywall, flooring, plumbing, snow removal, eaves trough cleaning, and other maintenance tasks; • They tell you that you don’t need to involve ESA, and that you don’t need a permit; • They offer a discount if you pay cash, accept only cash and/or won’t provide a receipt.

More resources can be found at, including a searchable database of all Licensed Electrical Contractors in Ontario.

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Profile for MediaEdge

Canadian Apartment Magazine October 2019  

Canadian Apartment Magazine October 2019