Apartment CANADIAN
VOLUME 17 / NUMBER 5 /SEPTEMBER/OCTOBER 2020
SEARCHING FOR SILVER LININGS LESSONS LEARNED AS COVID STRIKES AGAIN
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EDITOR’S NOTE>>
Apartment CANADIAN
OVERCOMING ADVERSITY IN THE AGE OF COVID
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As uncertainty abounds and Canadians continue to adjust to life in a pandemic, the rental housing industry is doing its best to keep up with the unrelenting pace of change. Infection control, new legislation, and the complications of working remotely are just some of the ongoing challenges. Rents are declining, fears of a second lockdown are mounting, and no one knows when, or if, the world will return to normal. Hopeless as this may sound, like most of life’s obstacles, silver linings do exist. Having weathered many ruthless storms in the past, the Canadian apartment industry is no stranger to conflict—which is why so many property management companies have been able to embrace the challenges imposed by the pandemic and effect meaningful change that will serve them well into the future. For a look at the state of the industry today, and where hopeful industry leaders see us going, read our cover story on page 20. Also in this issue: the plight of student housing landlords, Canada’s new Rapid Housing Initiative, market analytics, the insurance conundrum, and more. As always, if you have a story idea you’d like to share, or a comment you’d like to add to a feature, please reach out to us via www.REMINetwork.com or through one of our many social media channels. In the meantime, stay safe and continue to turn those obstacles into advantages. The apartment industry will be all the stronger for it. Sincerely, Erin Ruddy @cdnapartmentmag
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HOW HAS THE PANDEMIC AFFECTED CONSUMER SPENDING? MAJOR PURCHASES:
ENTERTAINMENT:
• Real estate
• Dining out
• New cars
• Movies
• Vacations
• Concerts • Furniture
• Low-priced brands BARGAIN SHOPPING:
• Bulk household items • General supplies
ONLINE SHOPPING:
• Personal care items • Clothes
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Apartment CANADIAN
VOLUME 17 / NUMBER 5 / SEPTEMBER OCTOBER 2020
FEATURE 14 Student Housing Without the Students Montreal’s off-campus housing landlords forced to shift gears in absence of tenants by Catherine Morrison 18 A long the Road to Recovery Highlights from the latest Altus Group Investment report 26 Consistent, Proactive Resident Engagement How to build stronger, better apartment communities by Jennifer Mulholland COLUMNS 8 Transactions Muti-res Sector in Q3 10 CMHC The Rapid Housing Initiative by Graeme Huycke 28 Newsworthy Industry Hot Topics 34 Insurance Invest in the Bones of your Property by Andy Schwartze 36 Perspective A Case for Co-Living
COVER STORY
DEPARTMENTS
20 The Silver Linings of 2020 Industry weighs in on lessons learned as COVID strikes again by Erin Ruddy
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Apartment CANADIAN
Editor’s Note
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SEARCHING FOR SILVER LININGS LESSONS LEARNED AS COVID STRIKES AGAIN
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VOLUME 17 / NUMBER 5 /SEPTEMBER/OCTOBER 2020
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Multi-res sector remains resilient in Q3 Apartment assets continue to perform comparatively well As Q3 2020 winds to a close, sales activity remains low compared to peak pre-pandemic levels; however, multi-suite residential rental properties, along with industrial, are the most highly coveted assets by investors. “Much of the activity that is occurring was negotiated prior to the outbreak pandemic,” said Keith Reading, Director of Research at Morguard. “Although activity levels have increased given a relatively high percentage of tenants have continued to pay rent, rental market conditions have softened, with vacancy rising, rents declining and demand remaining below the pre-pandemic highs.” As we head into Q4, Reading anticipates that the multi-suite residential rental sector’s solid track record of performance during periods of economic weakness will continue to attract investors looking for low-risk properties to invest in.
This stability stems from the fact that apartments provide much-needed housing for Canadians, whereas office leasing and retail both suffered during the pandemic. Additionally, rent payments were higher than expected—which may have been due to the federal government’s Canada Emergency Response Benefit (CERB). With CERB scheduled to come to an end, and no end in sight for COVID-19, rent payments may continue to decline in the coming months as the nation braces for a resurgence of the virus.
RECENT Transactions: Address
City
#of Units
Sale Price (Millions)
Sale Price/Unit
Purchaser
1.
Signet GTA Portfolio
Toronto
289
$80.4
$278,299
Timbercreek
2.
240 Markland Dr
Toronto
113
$51.0
$451,327
Carterra
3.
Arlington Court Apts.
Vancouver
54
$16.3
$301,852
Madison Pacific Properties
4.
Brampton Portfolio
Toronto
205
$54.0
$263,415
Golden Equity Properties
5.
4500 Jane St
Toronto
164
$44.6
$271,768
Starlight Investments
6.
122 Bronte St South
Toronto
163
$58.5
$358,896
Park Property Mgt
7.
200 Queen Mary Dr
Toronto
95
$33.0
$347,268
Homestead
8 | Canadian Apartment | Part of the REMI Network |
TRANSACTIONS >>
InterRent REIT acquires substantial Ontario portfolio In late August, InterRent REIT announced it has entered into an unconditional agreement to acquire five concrete mid- and highrise apartments located in Southwestern Ontario. Three of the five properties are in Hamilton and the remaining two are in London. The portfolio was purchased for $170.7 million, financed with a combination of cash and new mortgage debt. 100 Main Street East in Hamilton, also known as Landmark Place, features 295 residential units and 62,000 square feet of commercial space in the tower’s podium. This 42-storey downtown asset features excellent neighbourhood amenities, as well as the potential to improve and expand upon the existing amenity space. The property is located 450 metres away from Hamilton Centre Go station and 850 metres away from FirstOntario Centre. 35 Brock Street and 600 John Street North are sister towers located on the shores of Lake Ontario in Hamilton. The properties are connected via a parking garage and combine for a total of 223 residential suites. The towers offer rooftop terraces, supplemental amenity space, and will benefit from the future Pier 8 development. They are also located approximately one kilometre from the West Harbour GO Station. 500-522 and 527-531 Gordon Avenue are adjacent properties located in a residential neighbourhood of London, Ontario. These properties feature two towers totalling 180 suites, as well as 15 townhomes. These sites are well situated, directly beside Basil Grover park, and near the Victoria Hospital. “We are extremely pleased to announce the acquisition of this well-maintained portfolio, expanding our footprint and operational synergies in two strong markets,” said Mike McGahan, CEO, InterRent REIT. “We look forward to providing hundreds of residents with great homes in our welcoming communities.”
“This stability stems from the fact that apartments provide muchneeded housing for Canadians, whereas office leasing and retail both suffered during the pandemic.”
ARE YOU CONTEMPLATING THE SALE OF YOUR APARTMENT PROPERTY? Consider the following: • Who will represent your best interest? • Who will give your property maximum exposure? • Who will deliver the highest value for your property? With over 25 years of experience, tens of thousands of units sold, and hundreds of clients represented, we have consistently delivered superior results. Through our local and national coverage, we create maximum exposure, ensuring maximum value for your property.
Brock-King Portfolio Kingston/Brockville, ON 1,390 Suites - $102,878 Per Suite SOLD FOR $143,000,000
GTA Portfolio Toronto, ON 430 Suites - $310,797 Per Suite SOLD FOR $135,000,000
Parkwood Place Guelph, ON 161 Suites - $327,329 Per Suite SOLD FOR $52,700,000
452 – 560 Arlington Boulevard Burlington, ON 55 Suites - $338,182 Per Suite SOLD FOR $18,600,000
CBRE Limited, Real Estate Brokerage National Apartment Group – Toronto DAVID MONTRESSOR* | Executive Vice President
Please visit our website: www.cbre.ca/nag-canada
(416) 815-2332 | david.montressor@cbre.com * SALES REPRESENTATIVE
| www.REMInetwork.com | September/October | 9
CMHC REPORT >>
Canada’s New Rapid Housing Initiative Addressing the urgent housing needs of Canadians impacted by COVID-19 The health crisis has amplified existing housing affordability and homelessness issues, particularly for people and populations that are vulnerable. With the threat of COVID-19 still affecting all Canadians, the Government of Canada announced it is launching the new Rapid Housing Initiative (RHI) to help address the needs of those facing hardship, while simultaneously creating employment opportunities in the housing and construction sectors.
D
elivered through CMHC, the $1 billion initiative will cover the construction of modular housing, as well as the acquisition of land, and the conversion of existing buildings to affordable housing. The initiative is expected to facilitate the rapid creation of up to 3,000 new 10 | Canadian Apartment | Part of the REMI Network |
affordable housing units across the country while also helping support Canada’s economic recovery. “We know that Canadians experiencing homelessness are at heightened risk of contracting COVID-19,” said Adam Vaughan, Parliamentary Secretary to the Minister of Families, Children and Social Development.
“That’s why it is so important that we continue to ensure that communities have the resources they need to support those who are experiencing homelessness. I believe this renewed investment in Reaching Home and new funds for supportive housing will go a long way to effectively support those who need it most.”
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The Government of Canada will also provide $236.7 million through Reaching Home: Canada’s Homelessness Strategy to help extend and expand the emergency response to the COVID-19 outbreak. This funding is in addition to the $157.5 million announced in April 2020 to help communities address the immediate impacts of the pandemic. While the funding profile for the National Housing Strategy spans a 10-year timeframe, the RHI is a rapid response to emerging pressures from COVID-19. The initiative will enable communities to extend the emergency measures that have been successful in reducing the risk of potential outbreaks among people experiencing homelessness, as well as provide them the flexibility to deliver affordable housing solutions. RHI will be available to municipalities, provinces, territories, Indigenous governing bodies and organizations, and non-profit organizations. It is expected that all funds will be committed by March 31, 2021.
Additional facts about RHI: • In developing RHI, the Government of Canada has acted on the priorities expressed by key partners, including the Federation of Canadian Municipalities (FCM), provinces, territories, the Canadian Alliance to End Homelessness (CAEH), Canadian Housing and Renewal Association (CHRA), and other housing organizations. • The goal of the initiative is to help address the need for the rapid acquisition of land, and the construction of modular housing, as well as the acquisition of buildings (i.e. motels) that can be converted to affordable housing. • The RHI complements Canada’s homelessness program by providing targeted funding to create new housing
for people and populations who are vulnerable and who may also receive supports and services under Reaching Home. • Taking a human rights-based approach to housing, the initiative will serve those experiencing, or at risk of homelessness, and others who are among the most vulnerable, including: women and children fleeing violence, seniors, young adults, Indigenous peoples, people with disabilities, people dealing with mental health and addiction issues, veterans, LGBTQ2, racialized groups including Black Canadians, and recent immigrants and refugees. • The RHI is intended to make an immediate difference in the lives of vulnerable people in our community.
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 unbiased housing research and advice to all levels of Canadian government, consumers and the housing industry. Visit www.cmhc-schl.gc.ca for more info.
A premier real estate services company in Canada DMS Property Management is one of Canada’s leading apartment managers with a portfolio of over 20,000 units
www.dmsproperty.com 12 | Canadian Apartment | Part of the REMI Network |
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Student Housing Without the Students Montreal’s off-campus housing landlords forced to shift gears in absence of tenants by Catherine Morrison Vacancies are rising in major urban centres across Canada due to several factors, including lower immigration, shortterm rental conversions, an increase in multi-residential construction, and COVID-induced caution about moving and buying a home. But the lack of students to fill rental units near universities and colleges is another reason for concern.
I
n Ottawa, a recent study conducted by Carleton University’s Centre of Urban Research and Education (CURE) predicted that an increase in vacancy rate in the city’s rental market would likely be caused by a decrease in student population and tourism. The survey, which continues through the month of October, anticipates Ottawa’s vacancy rate could push as high as 10 per cent as the pandemic surges on.
14 | Canadian Apartment | Part of the REMI Network |
In Montreal, Canada’s most active rental market, major negative impacts have yet to be seen. But with fall upon us, and many students opting to stay in their respective cities rather than return to campus, rental units once filled by the academic cohort will need to find an alternate tenant pool. Maxim Cordeau-Andrews, customer relations and marketing manager for Akelius Montreal Ltd., says there are a “huge number”
FEATURE >>
“The strategy of offering shorter-term leases is a solution Akelius and other student housing providers believe will help them get through the next wave of COVID.”
of mostly younger, undergraduate students who are not returning to classes this fall, leaving many units empty. But on the flipside, he says there is an influx of students pursuing long-term, postgraduate or continuing studies involving research or lab work which could help lessen the blow. “Luckily for us, the universities in Montreal are in desirable neighbourhoods,” Cordeau-Andrews points out. “The properties that would have once been filled by students are still attractive to young professionals and recent graduates.” With student housing situated near all the city’s major campuses—including Shaughnessy Village near Concordia, the Golden Square Mile near McGill, in the near UQAM and in Côte-Des-Neiges/ Outremont near Université de Montréal and HEC—Akelius could have been in a difficult position. But according to Cordeau-Andrews, the buildings are well designed and equipped to attract young professionals who were already in the city or who may have recently graduated. “We are accommodating their requests to have shorter or more flexible leases than what we would usually do [because of] the uncertainty going on in the world,” he says. Shorter leases provide student housing safety net The strategy of offering shorter-term leases is a solution Akelius and other student housing providers believe will help them get through the next wave of COVID, or until universities decide it’s safe for undergraduate students to return to class. 16 | Canadian Apartment | Part of the REMI Network |
All across Montreal, universities have had to greatly adjust their plans for the fall 2020 semester. McGill University, Concordia University, and Université de Montréal have almost entirely moved to online learning for an indefinite period of time. At McGill, almost all classes have been moved online, encouraging students to continue on their academic journey from home. With the exception of masters and PhD students, who are able to study in person in small class sizes to complete lab sessions, the majority of McGill students will not be stepping foot on campus this fall. At Université de Montréal, clinics and laboratories will be held in person, with all other courses being offered online. Concordia has moved its fall 2020 classes online, with a few in person activities being offered in the Faculty of Arts and Science, the Faculty of Fine Arts, and at the Gina Cody School of Engineering and Computer Science. While some classes and activities are being offered in-person at Concordia, they will also be available online for those who do not wish to be on campus. Student residences At McGill, a number of residences including Douglas Hall, Gardner, Molson and McConnell Hall have been closed. The university has guaranteed all first-year undergraduate students admitted for the 2020/2021 academic year will have a spot in residence, even if travel restrictions or
other related issues don’t allow them to be in Montreal in the fall. To ensure safety protocols are followed, all open residences at McGill will implement both the Quebec government’s and the local health authority’s health and safety guidelines. In terms of current measures, the university has converted all double rooms to single occupancy, removing the option for students to have roommates. For student Lily Zhang, a residence assistant in New Residence Hall at McGill University, COVID-19 has greatly changed the regular operations of student housing. “This year, only hotel residences are open, and there are strict guidelines about how many people can be in common spaces,” she says. “There’s also social distancing being enforced in dining halls through limited seating. Students have their own rooms and bathrooms, meaning no one has a roommate this year— however, rent is still the same cost.” Meanwhile, Concordia has chosen a different course of action by making all of its on-campus student housing temporarily unavailable. Officials have been working to support students in finding off-campus housing by partnering with rental sites. Furthermore, many landlords are offering deals to make renting seem more attractive — from free parking, to one month’s rent free, to deferred payments, to discounted rental rates. It could be awhile before we see the market back to the way it was in pre-COVID times.
Find out more about the rental housing market in Canada by visiting: Rentals.ca
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FINANCE FEATURE >>
Along the Road to Recovery What the latest Altus Group investment survey tells us The latest results from Altus Group’s Investment Trends Survey (ITS) for the four benchmark asset classes show that the Overall Capitalization Rate (OCR) was little changed at 5.14 per cent in Q3 2020, but grew from 5.01 per cent in the same quarter last year.
W
hile the impact of COVID-19 on market conditions persists, investors are cautiously optimistic as the end of the year approaches. Strong industrial demand due to the pandemic has allowed that sector to remain resilient, while the office sector continues to face unprecedented challenges. Despite businesses slowly re-opening over recent summer months, the retail and entertainment sector anticipates additional challenges moving forward as the weather gets colder, leaving less room for outdoor physical distancing. Although there has been a decrease in total transaction volume — down by 20 per cent for the first half of 2020 compared to 2019 — overall commercial real estate remains stable as deals continue to close. With a second wave now declared in some areas, as well as the end of some government assistance programs, the delay in real estate decisions may continue. Employment As predicted by the Bank of Canada earlier this year, economic growth has resumed, but at a slow rate. Unemployment levels
18 | Canadian Apartment | Part of the REMI Network |
have steadied after reaching a record high in May, but the Conference Board of Canada forecasts that some jobs will not return, requiring the creation of additional jobs in new segments. The board reports notable employment gains within the accommodation and food services sector as businesses made adjustments to meet new avenues of demand — such as take-out and outdoor dining, as well as in the manufacturing sector which is well in alignment with increasing demand for industrial space across the country. Still, the Canadian unemployment rate sits at 10.2 per cent at the end of August, according to Statistics Canada. Interest rates Interest rates continue to remain low and are forecasted by the Conference Board of Canada to stay that way long-term as the Canadian economy is unlikely to fully recover until 2022 or 2023. Food anchored Retail Strip and Single-Tenant Industrial are the top preferred products this quarter. The location barometer for all available products indicates positive momentum within the Calgary, Montreal
and Halifax markets, while momentum has slowed in Vancouver, Toronto, Ottawa and Quebec City, and remains stable in Edmonton. Toronto and Vancouver remained among the top preferred markets, now accompanied by Montreal. With the ongoing struggles in the Alberta economy, Edmonton is the least preferred market by investors. Multi-res assets While multi-res assets still appeal to investors, demand continues to be influenced by pandemic effects, such as enduring international travel restrictions, continued threats of rent arrears, and the projected end of CERB and mortgage deferrals as we move into the final quarter of 2020. Suburban apartment cap rates fell to 4.39 per cent this quarter, down from 4.43 per cent in the previous quarter, but remaining stable compared to the same quarter last year. Vancouver and Montreal were the lone markets with an increase in cap rates, while Edmonton experienced the largest drop from the previous quarter. The greatest increase year-over-year was recorded in the Vancouver market.
STABILITY AND BALANCE
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COVER STORY >>
THE SILVER L OF 2020 Industry weighs in on lessons learned as COVID strikes again
COVER STORY >>
LININGS By Erin Ruddy
Usually, fall is a season of growth and opportunity, with post-secondary students heading back to school and a new crop of professionals entering the workforce. It can be a busy time of turnover, a positive new beginning for management and tenants alike.
| www.REMInetwork.com | September/October | 21
COVER STORY >>
B
ut 2020, by all respects, is different. What used to be normal in the pre-COVID era will never compare to what’s happening today. Even predicting what the world will look like one month from now is virtually impossible. Schools, shops, and offices are slowly beginning to re-shutter as the virus runs rampant in Quebec and Ontario. With some countries already in the grips of second lockdown, it’s likely November will unleash a whole new level of doom and uncertainty…making last month look like a cakewalk. However, on paper September wasn’t so good. Grim data from Rentals.ca showed that average monthly rents across Canada had declined to the tune of 7.6 per cent, with the GTA declining 11 per cent. Experts chalked the regression up to several COVID-related factors, including job loss; less immigration; a shift to virtual learning at post-secondary schools; and young urban professionals being forced to move back home with their parents. August rents were also impacted as more employees continued working from home, resulting in higher vacancies in the downtown core. Searches for cheaper, suburban properties went up, as landlords attempted to lure prospective tenants back to the once coveted markets. “The average rent for all property types in Canada remains flat, but rental rates for the most expensive central properties in Toronto, Vancouver and Montreal continue to decline,” said Ben Myers, president of Bullpen Research & Consulting. “Despite the lower rent levels and incentives offered by landlords recently, there is less financial motivation to move during a pandemic, especially with Ontario freezing rent hikes on all rent-controlled properties for 2021. The lifting of COVID-19 eviction bans in several provinces could lead to further supply hitting the market and further depressing rent levels.” Meanwhile on the investment side, apartments are faring better than their retail and office counterparts, but this isn’t enough to ease the angst of smaller landlords with limited resources to keep up with day-to-day measures—and blindsiding legislation hasn’t helped matters. “It is clear from the [Ontario] government’s own figures that inflation is running at 1.5 per cent, and without a rent increase to offset the added expenses for cleaning, maintenance and administration relative to COVID, many smaller operators will be feeling the pinch,” said Paul Cappa, paralegal with Cohen Highley LLP, referring to Ontario’s latest bombshell. “Landlords were hopeful that there would have been at least a corresponding freeze on property tax and utility increases for 2021. Unfortunately, the rent freeze is untargeted and does little to assist the most vulnerable tenants that have lost their income due to COVID.” For rental housing providers, where is the silver lining? As an industry, Canada’s apartment sector has weathered many storms, but nothing quite like the tsunami of financial and operational strife imposed by COVID-19. Will the industry look back on 2020 with a sense of overriding despair, or will COVID be regarded as the catalyst that elevated the industry to bold new heights? The answer,
22 | Canadian Apartment | Part of the REMI Network |
it seems, is a little of both. While many smaller landlords are likely to feel oppressed by the pandemic, some property management firms have jumped on opportunities that will only make them stronger. From enhanced virtual platforms to improved emergency protocols, there are some amazing lessons to be learned as we head into the last quarter. Here is just a sampling of the silver linings:
Kris Boyce, CEO, Greenwin Corp: “The pandemic forced us to jump into the future of property management today…” COVID-19 tested the limits of our business model like nothing we have seen before, and it was nothing we could have anticipated. Having to move most of our workforce remote, basically overnight, came with challenges. We were lucky in that our IT Team is amazing at making sure we’re always up with the latest technology, so the infrastructure was there, and we were able to accomplish what could have been a nightmare with relative ease. Even being apart, our teams were able to stay connected, meet their deadlines, and virtually collaborate—all while avoiding the morning commute. The addition of a new internal chat system changed our processes for sharing information and increased our ability to serve our residents virtually. In a way, the pandemic forced us to jump into future of property management today – and I’m happy to say we were pleasantly surprised by the results. Crisis management plans were always standard practice in the industry when it came to things like floods, fires and natural disasters, but pandemics were definitely not on the radar. There’s a saying that goes, “An ounce of prevention is worth a pound of cure,” and I think that this is a major theme the property management industry will take away from this situation. Shifting focus to put more emphasis on ongoing health education and safety practices is not something that will end, even long after the pandemic is over. I believe we will come out of this pandemic stronger and more educated on health protocols and processes for the greater good.
COVER STORY >>
Chrystal LeBlanc,
Director, Strategic Marketing for BentallGreenOak’s Residential Services: “Our staff have discovered new sources of joy and an ignited passion for their work…” The resident experience has been redefined during the pandemic, forcing our teams to consider how we can still bring warmth, compassion and timely care to our residents in these challenging times. Our property staff have added “social convening” to their repertoire by curating unique, physically-distanced programming, like virtual art classes, socially-distant concert performances, in-home fitness programming, delivery of DIY pizza kits for families, personalized art kits for residents with children, and in-person delivery of food and medicine direct to residents’ homes. Our staff have discovered new sources of joy and an ignited passion for their work through this renewed focus on human relationships that has brought a welcome sense of comfort and community to our properties.
BJ Santavy
Vice President, Skyline Living: “The pandemic is a chance for rental housing providers to make meaningful strides…” COVID-19 has caused physical, mental, and financial strife across Canada. We’re deeply attuned to the worries and needs of our residents. Our incredible frontline staff, their supporting teams, and our vendors and business partners, have all stepped up amid all of the uncertainty and shown our residents that we have their backs—not just in terms of heightened safety and cleaning procedures, but through communicating that our R.I.S.E. tenant assistance program is there for them. We absolutely do see a silver lining: the pandemic is a chance for rental housing providers to make meaningful strides to help their customers at the time it’s needed most.
| www.REMInetwork.com | September/October | 23
COVER STORY >>
What’s Drawing Renters:
Proximity to groceries rises among top amenities
According to a survey by Local Logic the most important amenity to would-be tenants is transit, with elementary schools, day cares and proximity to grocery stores also appearing in the top ten. Other notable rankings include the desire for quiet over vibrant neighbourhoods. “Interest in living near a grocery store is the highest it’s been since we started reporting these numbers in March — higher even than peak pandemic,” said Guy Tsror, data scientist for Local Logic, noting that Montreal saw a 28 per cent increase in August among renters looking for nearby grocery stores compared to previous months. As Wave Two of COVID descends, forcing curb-side pickup and/or limiting the number of people allowed in public spaces, it seems more Canadians would rather stick to their neighbourhood shops than venture too far from home.
In conclusion As challenging and financially draining as the pandemic has been for many, property managers should not lose sight of the opportunities. All companies, governments, and households have been struggling to navigate this uncertain territory, with the same overarching objective in mind: to manage the disruptions of the crisis so that the silver linings are what carry us through. Now is the time to focus on the trends and conditions that will reshape our society, economy, and industries for the better. With this objective in mind, the apartment sector is sure to flourish.
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Consistent, Proactive Resident Engagement How to build stronger, better apartment communities by Jennifer Mulholland Over the past six months, COVID-19 has tested our society in ways that have felt challenging at best and nearapocalyptic at worst. People have been forced to adjust their work lives, family lives and almost every aspect of their daily routines. But despite these challenges, some positive changes have also emerged—like being able to spend more time at home with our kids and less time commuting to work. Retaining these positives while discarding the negatives will be the real challenge as we adapt to our new normal.
O
ne of the most valuable lessons the rental housing industry has learned throughout this pandemic has been the importance of consistent, proactive resident engagement. For many apartment residents, receiving a steady flow of information when the pandemic forced us into isolation helped to offset feelings of being disconnected from the outside world. Additionally, with a higher proportion of residents working now from home, reliance on online tools has increased exponentially. This is not expected to change as we move into the next stages of pandemic recovery.
26 | Canadian Apartment | Part of the REMI Network |
With technology and communication now being central to everything property managers do, here are three reasons to maintain this strategy: 1. Clear communication reduces stress and friction, which are known to contribute to turnover in both residents and staff. By keeping your building communities informed of events, service disruptions, safety protocols, and other timely issues, a sense of trust—and potentially, loyalty—is established.
FEATURE >> ecosystem. As “contact-free” becomes the new norm, look for a wide range of solutions for tenants and property managers to have maximum flexibility for payments, credit line access, and other financial solutions— such as Renter’s Insurance, Credit Bureau Reporting, Tenant Screening, Security Deposit Alternatives, and more.
These types of software solutions allow property managers to proactively communicate with residents, resulting in better relationships, a stronger sense of community and improved job satisfaction for building managers. The new normal will quickly become business as usual. Don’t let it pass you by.
Article written by Jennifer Mulholland, Co-Founder, UR Concierge Services Inc.
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2. The digital players in the property management industry have been watching and reacting to the changing needs of the industry. As resident preferences shift towards more contactless interactions, the companies at the forefront of innovation are working to deliver the most up-to-date platforms. Property managers not keeping up with the pace of change will undoubtedly be left behind. 3. Resident online engagement platforms offer fast, convenient ways for managers to connect with their residents. Not only does it benefit your tenants, but the ease of communication benefits you. If you’re in the market for a new digital platform, look for companies offering customizable websites that are ADA accessible and offer translation services in as many languages as possible. Additionally, be sure to offer features like a resident marketplace, community event page and a local shopping directory. All are designed to improve communications, build loyalty, and increase management efficiency. For payment platforms, trust companies that empower your residents to take control of their finances through a simple, integrated, and secure solution, powered by a world-class partner
Contact free payments: pay rent online, phone & in-store. Contact free communication: private bulletin board, notices by email or text. tenant-communication.rentmoola.com
| www.REMInetwork.com | September/October | 27
NEWSWORTHY >>
Industry Hot Topics CAPREIT expands portfolio in Southwestern Ontario
C
APREIT has completed the purchase of two properties in Southwestern Ontario for a purchase price of $50 million. Total occupancy in the Sarnia and London properties currently stands at 98.3 per cent. “These acquisitions expand our presence in the strong Southwestern Ontario markets of London and Sarnia,” commented Mark Kenney, President and CEO. “We look to achieve solid returns on investment as operating synergies and economies of scale are realized through the increase in the size of this region’s portfolio.” The London property is a six-storey apartment building located in Southwest London containing a mix of 107 bachelor, one- and two-bedroom suites. Located within a short walk of the Thames River, the property is close to a shopping mall, public gardens and other amenities, as well as local transport and access to major thoroughfares. The Sarnia property consists of a tenstorey apartment building, a three-storey apartment building and 60 townhomes totaling 194 residential suites, as well as one commercial unit. The property is
located in a pleasant low-density residential neighbourhood close to schools, parks, public transit and highways. Amenities include park-like landscaped grounds and a seasonal swimming pool. Currently, CAPREIT owns approximately 56,700 suites and sites, including townhomes
and manufactured housing sites, in Canada and indirectly through its investment in ERES, approximately 5,600 suites in the Netherlands. CAPREIT manages approximately 60,800 of its owned suites in Canada and Netherlands, and additionally, approximately 3,800 suites in Ireland.
LaSalle to welcome new mixed-use community A new mixed-use community is coming to the LaSalle borough of Montreal, featuring a mix of local amenities, sustainable construction, and an expanse of walkable green space. Called “Le Newman”, the development will include three distinct residences: a rental apartment, a condo, and a residence for active retirees. More than half of the 20,000 square-metre lot will be devoted to nature, terraces, and pathways. Located a few streets from Angrignon Park, the project will offer 950 residential units in total. The community is being developed by Cogir Real Estate in partnership with Welltower and designed by NEUF architects. With each building ranging in height from 14 to 16 storeys, the aim of the project is to transform Western Angrignon District of LaSalle into an attractive, mixed and dynamic community. “The sector’s revitalization will be a function, in part, of an integrated mixed-use neighbourhood,” the press release explained. “With this in mind, outdoor green spaces will be laid out, and they will feature some community equipment for the 28 | Canadian Apartment | Part of the REMI Network |
project. The large paved surfaces will be removed and there will be a clear preference for materials that have a low volatile organic compound (VOC) content. The development of space that promotes sound waste management will, of course, comply with the LaSalle borough standards.”
NEWSWORTHY >>
Chartwell provides bleak operational update
I
n an operational update issued September 15th, Chartwell revealed that the pandemic was continuing to negatively impact occupancy levels due to restrictions required to mitigate the spread of COVID-19. As of September 14th, positive cases had been confirmed in Chartwell properties, necessitating precautions that may have inhibited resident move-in decisions, as well as to short-stay visits. On the positive side, Chartwell said that the pace of decline in occupancy had slowed since the onset of the pandemic, with August representing approximately 65 per cent of previous-year volumes. Move-out activity continues to be below previous-year levels, and in August was approximately 75 per cent of previous-year volumes primarily due to reduced departures to long-term care, particularly in Ontario. On September 10, 2020, the Ontario government issued its previously-announced redesigned capital funding subsidy (“CFS”) program policy for long-term care. The policy includes a $1.75 billion investment to redevelop 12,000 beds and add an additional 8,000 beds over the next five years. “We have 577 Class B and C beds that are eligible for this redevelopment program,” Chartwell acknowledged. “We are grateful to the Ontario government for taking this important step to improve the aging long-term care infrastructure in the province. We continue to work closely with our industry partners and the government to finalize the details of the new CFS program, to ensure the related approval and licensing process to expedite projects are feasible within this new program, and importantly to ensure the sustainability of long term care homes including adjusting operating funding to sufficient levels to absorb additional costs, particularly enhanced staffing, to prevent and contain the spread of COVID-19.” On September 9, 2020, the Ontario government announced further funding of $45 million for COVID-related expenses. Chartwell’s share of this funding is $1.7 million. While Chartwell said it welcomed the support to the sector, it added that the funding was not sufficient to fully cover additional costs incurred by long-term care home operators to comply with government orders and directives. “Our pandemic-related expenses in our Ontario long-term care residences to August 31, 2020, exceeded the aggregate funding, including the funding announced on September 9, 2020, by approximately $3.0 million.”
Brightwater community launches in Port Credit, Ontario
A
72-acre property that sat vacant for nearly 30 years in Port Credit, Ontario, is one step closer to becoming the new Brightwater masterplanned community. The Port Credit West Village Partners, including Kilmer Group, DiamondCorp, Dream Unlimited, and FRAM + Slokker announced the launch of the project in September. The masterplan, designed by architectural firm Giannone Petricone Associates and design and planning firm Urban Strategies, will bring a much-needed mix of housing typologies to Mississauga that includes 2,995 new residences through a mix of condominiums and townhomes, as well as 150 affordable housing units. Urban and community amenities will include 300,000 square feet of retail, restaurants, office space, as well as a future new elementary school and proposed community centre. Diamond Schmitt Architects has designed the first phase—Brightwater I and Brightwater II—which will rise on the remediated Imperial Oil Lands at 70 Mississauga Road South and 181 Lakeshore Road West. A key feature of the community will be 18 acres of new green spaces, including a new nine-plus acre waterfront park, with walking and cycling promenades, pedestrian mews and public plazas that weave throughout the site. The project also introduces one of the first bioswale systems in Canada. Landscape architect Public Work has envisioned sloped naturalized channels to facilitate water movement on every street within the site. Stormwater management strategies, designed by Urbantech, and dynamic ecologies such as rainwater harvesting and bioretention strengthens Brightwater’s resilience, ensuring a healthy shoreline and meadow communities for the future. “When we started our work on Brightwater more than five years ago, we were so motivated by our vision of what the future of Port Credit Village and the waterfront could be,” says Bob Blazevski, President and COO of DiamondCorp. “We have assembled an exceptional team of top talent across real estate, architecture, design and planning. We put our heads together to push the boundaries within our fields. The result is a worldclass community and that will be a legacy for generations to come.”
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Costa advised that he no longer wished to occupy his role as president. The emergency meeting took place at the defendant’s (MTCC 1292’s) premises. At the emergency meeting, the plaintiff and Mr. Da Costa entered into a heated argument, which led Mr. Da Costa to “lose it” and strike the plaintiff on the head with a chair. Mr. Da Costa was charged by the police and received a conditional discharge for assault with a weapon. iff commen The plaintiff commenced a civil action against Mr. Da Costa fo for his use of force as well as MTCC TCC 1292 for fo failing to ensure her safety and nd failing to employ security meet measures at board meetings. MTCC 1292 brought a motion summary judgment otion for su to dismiss the plaintiff’s plaintiff’ claim against it nly opposed by Mr. Da Costa which was only given his crossclaim MTCC 1292 ossclaim against ag on and indemnity. inde for contribution
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their premises reasonably safe for those who enter it. But what about when an individual commits assault while at one of these meetings? Should the occupier or organizer of the
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In Omotayo v. Da Costa, 2018, the defendant occupier, Metro Toronto Condominium Corporation 1292 (MTCC 1292), was successful in dismissing the plaintiff’s claim and the assailant’s crossclaim when a member in attendance at a condominium board meeting struck another meeting attendee with a chair. Justice Nishikawa found that the duty the condominium corporation owed to the plaintiff did not include preventing an assault that occurred during their condominium board meeting. Facts of the case T he plaintif f, J ac queline O mot ayo, was a resident and former chair of the condominium corporation. The defendant, Jose Da Costa, was also a resident and former president of the condominium corporation. An emergency board meeting was held on Oct. 4, 2011, to discuss the future organization of the board as Ms. Omotayo had recently been removed from her position as chair and Mr. Da
By Steven Chester
SERVING THE FACILIT Y CLE ANING & MAINTENANCE INDUSTRY
Let’s face it, we all want our businesses to be social media rock stars, and we know it ain’t easy. It’s becoming more prevalent that some of the most popular social media platforms have been infiltrated by those who game the system. This includes those that buy fake followers and “likes” in order to create the illusion that their social media profile is more popular than it is. These fake followers are predominantly bots – accounts run by software designed to look and act like real people.
APRIL/MAY 2017
New services are also popping up that allow authentic social media accounts to become part of the bot game. By signing up for the service, the user authorizes their account to automatically like, follow and randomly comment on other users’ posts, and in turn they trade that fake engagement with other users. Sound harmless enough? The thing is you have no say in in the message your account is spreading or where it ends up.
CARING FOR FRAGILE FLOORS
Summary judgment motion udgment m positi MTCC took the position that its duty w is confined confine to the physical under the law condition of the premises premise and foreseeable e unforese risks, not the unforeseeable conduct of individuals in attendan attendance. Meanwhile, Mr. Da Costa that MTCC 1292’s a argued th s to having rules of conduct duty extends s, policies re for meetings, relating to abusive l an gu a g e, thre at s aan d intimid atin g d a duty to h behavior, and hire and supervise competent professional professionals to oversee its luding, if appropriate, ap business (including, security Cos further argued personnel). Mr. Da Costa ult was foreseeable fore that the assault given the M quarrelsome nature of MTCC 1292’s board nd a prior unrelated u meetings and incident involving the plaintiff and another member of MTCC 1292 wherein the police was 292 wherei called. ng her dec In reaching decision, Justice Nishikawa looked Coleiro v. Premier ooked to C s where summary sum Fitness Clubs judgment d in favour of the defendant was granted
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Ask yourself this: What’s more important, having 50,000 cosmetic followers, or having
500 followers who are in your target market REMEDYING FOUR that actually want to hear from you? COMMON CARPET As a consumer, it’s even simpler, as PROBLEMS deceptive tactics are easy to spot. If you’re using underhanded methods to promote your business, this can be viewed as a reflection of your product or service. Your integrity is at stake. This is one of the more complex topics that can’t be fully covered in this space. As always, I invite you to stay social and continue the conversation on Twitter at @Chestergosocial where I’ll share a link to the full article.
SCENT OF
SUCCESS Steven Chester is the Digital Media Director of MediaEdge Communications. With 15 years’ experience in cross-platform communications, Steven helps companies expand their reach through social media and other digital initiatives. To contact him directly, email gosocial@mediaedge.ca.
www.REMInetwork.com | June 2018 15
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Kelson Group releases plans for new Kamloops development “We are very pleased with where we are today with the design,” he added. “We are looking forward to hearing back from the public, and depending on the interest, we would then move forward and apply for the development permit.” To build out the vision of City Gardens, the group is discussing the purchase of a portion of Nicola Street and a laneway between Nicola and Battle Streets, anticipating they would cover the costs to relocate civic infrastructure, like water and sewer.
K
elson Group has released plans for a proposed $140 million multiresidential development coming soon to Kamloops, B.C. The plans include a 22-storey and 18-storey tower, three 4 to 5-storey apartment buildings, and six townhomes. The land area exceeds 150,000 square feet (about 3.5 acres) and the current design concept has 445,000 square feet of residential space, or roughly 435 units. Currently, the expectation is that up to 60 per cent of the housing will be market condos and the balance rental suites. Interest from the community will determine the final allocation. “Our team has been working for a while on this project,” said Jason Fawcett, President of Kelson Group. “We recently met with the City’s development services department to share our plans to ensure they align with the City’s goals of livability and walkability, not only for potential new
residents, but for those who work, visit, or live in our downtown area. The plans aren’t fully confirmed as we are seeking our community’s feedback to help us make this a signature development in Kamloops’ downtown core.” Architects and landscape designers have created an overall concept of the development and were able to add in many elements to ensure accessibility while also providing important green spaces for the residents of City Gardens. “The name City Gardens has always been the foundation of our design because it captures our vision of a vibrant urban environment enhanced with green spaces and beautiful landscaping,” said Ron Fawcett, Founder & Executive Director of Kelson Group and the driving force behind the project. “This design concept brings the best of both worlds into one living space and will be a jewel in the downtown core.”
Stonefortress_FE_Directory_2020_FINAL.pdf
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Plans for the development also include: • Up to 600 underground parking stalls over three levels below surface • Social gathering spaces like outdoor kitchens, lounge seating, and workout stations • A linear park with bench seating and walking paths • Lush plantings with a terrace garden, water features, and Zen garden • Amphitheatre, dog run area, and a natural play park area “We have thought a lot about every aspect of the development,” said Fawcett. “We are also mindful that some of the buildings in the area we need to remove have some character aspects to them. We will work to ensure some of the unique elements of these buildings can be used in our new builds, similar to what we did with our Peterson Landing apartments on Summit Drive, donating wood and other features from the old building that once occupied that space. We’ll be looking to the community too for some of their creative solutions they would like to offer as a part of our consultation.” To find out more about the project and to provide feedback, visit: www. kelsondowntownproject.ca
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Invest in the Bones of Your Property Aesthetics don’t matter as much to your insurer by Andy Schwartze
The great struggle between property insurers and the growing group of COVID plaintiffs has begun, and it’s going to be an interesting spectacle. Legal battles of this enormity do not occur often, but when they do, they become an enormous burden on the industry affected. We should have every reason to speculate that what we are seeing now could go on to rival the asbestos issue, which has been plaguing the insurance industry for decades. When law firms evolve or are newly created purely for the purpose of tackling one issue, you can assume it will be ongoing for awhile.
O
n September 14, 2020, the High Court in England rendered a ruling that struck a serious blow to property insurers. It suggested that insureds, who had purchased insurance contracts that cover business losses, have a right to expect those losses to be covered because of COVID-19 shutdowns. It also suggested that insurance companies should refrain from engaging in any kind of delay tactics and pay these claims quickly, so that the financial difficulties suffered by insured businesses are not exacerbated needlessly. Now, the publicly available information on this ruling is complicated and would probably confuse even the best of legal minds. The important fact is that the legal system has now received its first major ruling on this topic, and it will become the standard bearer that guides other cases and jurisdictions moving forward. Canadian readers may be inclined to think that this
34 | Canadian Apartment | Part of the REMI Network |
ruling, way over in England, is largely irrelevant. But in Canada, and also in Australia, common law systems have been developed on the foundations of the English system. We have a litany of verdicts embedded in our system that follow British precedents; what happens there can easily find its way into our system here. So, what does this mean for Canadian insurance consumers? A vibrant and competitive insurance market is not unlike its banking equivalent. These are industries that risk their capital to provide consumers with loans and protection. Their willingness to do so is related to the attractiveness of the returns that the capital gets and to the extent that their exposures to loss can be measured and controlled. Remove these factors and you will quickly see a few things happen, some of which Canadian Apartment readers are already experiencing.
INSURANCE >>
MOBILE FRIENDLY
Firstly, capital is mobile and when it stops flowing into the system, the ability of the industry to expand is restricted. Secondly, when the measurement and control of risk is limited, compromised, or legally altered, willingness to do business reduces. In Canada, that has happened already. A combination of factors has caused the industry to circle the wagons and become enormously cautious and uncompetitive. If you are the owner of one or more apartment buildings, you do not need a lesson on what has changed in the insurance world. It has become cranky and ornery, demanding and expensive—and, unfortunately, it’s only going to get worse. The political ignoring of infrastructure is showing us the deterioration of underground services that are being stressed with each newly approved construction project. Buildings that have bypassed core upgrading in exchange for tenant-enticing cosmetic changes are under pressure to invest in their systems. Recommendations that were suggested in past years have now become mandatory, or coverages will be restricted and even refused. Weather has added to the underwriting nervousness and COVID-19, if it becomes a mandated inclusion in present day rental income loss policies, will pretty much cripple the Canadian insurance market, at least for a few years. This is no laughing matter and we all need to take it seriously, especially now as we watch the west coast burn up, the Great Lakes see rising water levels, billion dollar hailstorms in Calgary, and a second disaster in Fort McMurray. For our readers, who are owners of rental apartment assets, there is only one option: invest in the “bones” of your properties. Repainting an apartment or installing under cabinet lighting, does nothing to attract an underwriter. Roof replacement, electrical updates, plumbing and risers, heating and water supply systems and asphalt surfaces—these are the important and critical aspects that drive current underwriting discipline. Your claims history is irrelevant when the building is 60-70 years old and still largely in original condition. If you need more input on this, by all means contact me at andy@takecover.ca
VISIT US AT
CONTACT Michael Gnat Phone: 416-635-4835 Email: mgnat@midnorthern.com
| www.REMInetwork.com | September/October | 35
A Case for Co-Living Landlord Chris Seepe shares the barriers facing “out-of-box” affordable housing solutions by Chris Seepe
As long-time apartment owners, my partner and I recently invested just under $1 million into the purchase of a beautiful ranch-style bungalow we then converted into affordable “home share” housing for seniors. Located in Peterborough, Ontario, the project has struggled and could possibly fail as a result of barriers we never saw coming.
S
tatsCan’s 2016 Census Profile reported that more than onethird (36.3%) of Peterborough’s population is over the age of 55. Our rent is set at $950 to $1,095 for a private bedroom and shared common areas. Every amenity needed in a home, plus housekeeping services, are included in that price. Retirement homes, while offering more services, average $6,000 per month. Our tenants pay the property’s operational expenses, which means their rent can decrease when they employ best practices for utilities consumption. As a Canadian landlord, I’m unaware of another project that offers such a self-sustaining opportunity. Yet still we were met with resistance. 36 | Canadian Apartment | Part of the REMI Network |
Barrier #1 – Insurance & financing Eight building insurance providers would not insure the property because it is seniors co-living. Four companies quoted a premium three times higher than when the property was insured as student housing. The lowest quote was twice the original premium. Every mainstream lender refused to provide financing because shared living among seniors is deemed too risky. Meanwhile, private lenders demanded four times higher interest than mainstream residential mortgage rates.
PERSPECTIVE >>
“Until the government properly incentivizes the private sector, affordable housing in urban and suburban centres will be a fleeting dream for an ever-increasing majority of people.”
Barrier #2 – Lack of assistance Three times we contacted the Peterborough mayor’s office to ask for assistance in spreading the word. But no reply came, despite Mayor Diane Therien’s 2019 10-point plan to build 2,000 affordable housing units by summer 2021. Peterborough Housing reported that the current waitlist for subsidized housing is nine to 12 years. Barrier #3 – Guidelines that don’t favour “out-of-the-box” solutions Two CMHC program managers who oversee programs to foster innovative affordable housing solutions said our solution didn’t fit within their “inside-the-box” program guidelines. We contacted many local and regional housing agencies—YMCA, YWCA, Red Cross, Salvation Army, several places of worship, municipal housing, Canadian Mental Health, Brain Injury Association, Trent Centre for Aging & Society, Activity Haven for seniors, Peterborough Sport and Wellness Centre for seniors, and a slew of other agencies—with no success generating interest. Three of these agencies said they were unable to work with “for-profit” entities, and others wouldn’t even accept paid advertising so we could spread the word. A bright light Age-friendly Peterborough, a community-based collaborative offered through the city, embraced our project and referred applicants our way. A monthly classified print ad in their newsletter yielded many more responses than all our online initiatives combined. What we learned With Infrastructure Canada reporting 252,450 total social and affordable housing units in 2016, and StatsCan’s 2017 reporting 6,529,445 occupied private rental dwellings out of a total 14,072,080, the private sector, it would seem, has built 26 times more housing units than the government. With the largest debt in Canadian history from COVID-19, it’s unlikely the government will be building more affordable housing anytime soon. In terms of resident needs, many of our applicants didn’t want “affordable” housing; rather they wanted an option to age-in-place with dignity and comfort in an all-inclusive downtown rental unit while paying rent equal to what the government support programs provide— approx. $750 per month. The numbers The annual operational cost of our property is roughly $40,000 before tenant best-practices. Divided by eight tenants, that equals $415 per month. Conventional 70% loan-to-value financing, 25year amortization, 4% interest all in totals about $390 per tenant per month. That $805 doesn’t include capital costs or a return on
investment for providing the “affordable” housing. Ten tenants make the property a highly attractive investment. Many pundits and government spokespeople say residential owneroccupied and investment housing prices will drop. Not a chance. Housing prices and rents will continue to rise despite mortgage defaults and rising unemployment. The reasons? • No reduction in property taxes and development charges • Three-to-five-year approval times • Hefty fees-in-lieu of park lands • Costly government-mandated plans, studies, red tape • Anti-landlord tenancy legislation • Unjust landlord-targeted municipal by-laws • Policies like the landlord responsibility to “accommodate to the point of undue hardship” • Failed Landlord and Tenant Board, multi-year backlog of applications • 9-to-12-month rent-free evictions backlog costing arguably a halfbillion dollars in lost rental income • Government licensing fees for housing • Double-digit increases in construction labour costs and materials, especially glass, concrete and steel • A critical shortage and decreasing number of construction labourers • A flood of investors wanting real estate hard assets versus volatile and unstable stocks • Low bank and bond ROI rates, decreasing dividend-paying stocks • Media and government hype for self-serving reasons that promote tenant-landlord tensions • Rapid increase in people working from home increasing infrastructure and municipal services costs • Overarching demand that far outpaces supply • Decades of government failures to encourage housing construction Countries like China and India, which have suffered housing shortages for decades, have long included home share, co-living, rooming houses, roommates and other forms of shared housing in their standard housing options. Until the government properly incentivizes the private sector, affordable housing in urban and suburban centres will be a fleeting dream for an ever-increasing majority of people.
Chris Seepe is a published author, 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 investment properties. Find him at: www.drlandlord.ca | www.REMInetwork.com | September/October 2020 | 37
Smart Ideas
MEASURING EMBODIED CARBON
Why building owners should undertake a Life Cycle Assessment (LCA) As climate change becomes a growing concern for cities around the world, opportunities for reducing carbon emissions have been widely embraced by the building sector. But to date, far more emphasis has been placed on the impacts of operational carbon than a structure’s embodied carbon. Essentially, embodied carbon refers to the energy consumed during manufacturing, maintenance and decommissioning of building materials, including steel, aluminium, glass, insulation, and wood. Unlike operational carbon, which looks at a building’s heating, cooling, lighting, and ventilation equipment, calculating and reporting on embodied carbon is currently not mandatory. But all that is beginning to change. “As buildings become increasingly energy efficient, embodied carbon is playing a significant role in our efforts to reduce upfront carbon emissions,” observes Lorena Polovina, Building Science Engineer at RJC Engineers, Vancouver, BC. “Currently, the City of Vancouver’s Zero Emissions Building Plan aims to achieve a 90% reduction in emissions by 2025 using Life Cycle Assessments (LCAs) to inform future policies. Many countries in Europe have programs in place to address embodied carbon, requiring
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whole building LCAs to capture the overall environmental footprint of a building.” Polovina advises owners of apartment buildings to consider a Life Cycle Assessment to capture important data about their building’s embodied carbon. As she explains, a whole building LCA “holistically looks at how a building affects climate change, non-renewable resources and the environment” as a whole. “Conserving our existing buildings is one of the best things we can do to address embodied carbon,” she says. “Architect Carl Elefante said it best with ‘the greenest building is the one that’s already built.’ Maintaining, upgrading and repurposing our existing buildings goes a long way in reducing our environmental impact. If renovating, choose low embodied carbon materials where possible.” Visit RJC.ca for more information.
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