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F O R B U I L D I N G O W N E R S , A S S E T A N D P R O P E R T Y M A N AG E R S

VOL. 23 NO. 8 • JANUARY 2017

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TABLE OF CONTENTS

CONTENTS COVER STORY

DOWNTOWN DYNAMIC New office supply steadily absorbed in market

IN THIS ISSUE

RULING COULD HELP CONDOS FIGHT SHORT-TERM RENTALS

LIGHTING SETS THE TONE

Airbnb deemed a commercial use

Designers integrate art, science and business

8 4

GTA & BEYOND ■ JANUARY 2017

TRAGEDY ACCENTUATES FIRE SAFETY IN BUILDINGS

STRICTER RULES AHEAD FOR APARTMENT BUILDING OWNERS

Landlords carry prime responsibility for non-compliance

Toronto City Council calls for registration fees

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January 2017

Bergeron Centre a model for fully integrated BIM

Immersive hotels respond to desire for unique experiences

The use of fully integrated building information modelling (BIM) fast-tracked the vision for the Bergeron Centre at York University and paved the way for the process to be adopted as a campus-wide standard at the post-secondary institution.

Hotels are no longer just a place to sleep or eat; they have become social connectors. Guests now desire a new experience, one that is interesting and unique and sets them apart from their community of friends and colleagues on social media.

Library facility reads like ‘fragment’ of its landscape The new Waterdown Library and Civic Centre is designed to read like a ‘fragment’ of the Niagara Escarpment over which it cantilevers. RDHA reflected the look of the rocky ridge by cladding the 23,500-square-foot municipal building with slabs of limestone.

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LEGAL/COMPLIANCE

RULING COULD HELP CONDOS FIGHT SHORT-TERM RENTALS Judge finds ‘single-family use’ precludes Airbnb-style accommodations BY MICHELLE ERVIN

court ruling released late last year strengthened the position of condominium corporations in Ontario that are struggling to enforce restrictions on short-term rentals. The judge in Ottawa-Carleton Standard Condominium Corporation No. 961 v. Menzies found that offering Airbnbstyle accommodations could not be considered a ‘single-family use,’ but, rather, a commercial use. “What’s new, and what is a game changer, is that we argued that the language in the declaration already prohibited these kinds of short rentals from day one,” says condominium lawyer Rodrigue Escayola, who represented the condominium corporation in the case. “When the length of leases are regulated by rules, owners try to attack the rule by saying the rule is unreasonable, or they can say, ‘When I bought,

GTA & BEYOND ■ JANUARY 2017

this rule didn’t exist, so I should be grandfathered.’” In the Ottawa case, the board had passed a rule setting a four-month minimum for leases after observing an uptick in short-term rentals. A lawyer who co-owned a unit with his wife wrote the corporation a letter asserting that the rule was ‘illegal,’ among other things, and advised that he intended to pursue an injunction and sue for damages. The corporation told the unit owner that he could properly challenge the rule by collecting the signatures of at least 15% of the owners to force an owners’ meeting on the matter. Instead, the unit owner filed a court application; the 30day deadline to challenge the rule expired and the corporation proceeded to take enforcement measures. The corporation later filed a counter-application asking for an order to comply. Justice Robert Beaudoin found that the rule validly prohibited short-term rentals, as did the declaration, which restricts units to ‘single family dwelling’ use. As a result, the judge concluded that the owners’ use of the unit violated both the declaration and rule, and ordered them to comply. “‘Single family use’ cannot be interpreted to include one’s operation of a hotellike business, with units being offered to complete strangers on the Internet, on a repeated basis, for durations as short as a single night,” he wrote in his ruling.

LEGAL/COMPLIANCE

“Moreover, ‘single family use’ could not have contemplated including the use of a unit to house out-of-town witnesses and experts for trial preparation or the unit being offered on silent auctions or to hold a law firm’s office functions and Christmas parties.” SPECIFICS REQUIRED IN DECLARATIONS Escayola, a partner at Gowling WLG, suggests the decision could have implications for condominium corporations across Ontario and beyond. Most residential condominium corporations have declarations that contain provisions limiting units to ‘non-commercial,’ ‘residential’ or ‘single-family’ uses, he said. There are some newer corporations whose governing documents expressly allow shortterm rentals, he added. B.C.’s version of the declaration, called the strata plan, often sets similar restrictions on the use of units, notes Lisa Frey, an associate with the Vancouver office of Gowling WLG. But unlike in Ontario, restrictions on the use of units can be further defined in the bylaws, not the rules. That has posed a roadblock in the western province, as its laws require a

higher threshold of support from owners for bylaws to succeed. “Here, more recently, stratas have tried to pass bylaws that would prohibit the use of units for short-term rentals like Airbnb, but getting 75% of people to agree to something is very difficult, and so those have been met with a lot of resistance” Frey says. The recent court ruling could help if the B.C. courts interpret limits on the use of units in the same way. That’s because most strata corporations are regulated by a number of statutory standard bylaws, Frey explains, including one prohibiting strata lots from being used contrary to the use spelled out in the strata plan. Back in Ontario, the applicability of the court ruling will hinge on the specific language in a condominium corporation’s declaration, Escayola says. He recommended that corporations consult their declaration with their legal counsel. Escayola will be advising his clients to send a letter informing residents of the court ruling, and what it means for their particular community. After that, he says

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he would recommend moving to enforce the declaration or rule against any owners who persisted in ignoring restrictions on short-term rentals. The court ruling may have established that ‘single-family use’ precludes this type of accommodation, but condominium corporations will have to continue to enforce restrictions on a case-by-case basis, diligently collecting evidence to support their claims. Nevertheless, Escayola points out that the act of advertising short-term rentals leaves a digital paper trail, complete with photos and reviews from guests. In fact, in the recent case, the listing for the unit cautioned guests to ‘be discreet’ about the nature of their stay. “I don’t want to overstate it, but we may have put a nail in the Airbnb condo coffin,” he says. ■ ________________________________________ MICHELLE ERVIN IS THE EDITOR OF CONDOBUSINESS. THE PRECEDING ARTICLE IS REPRINTED FROM THE REMI NETWORK AT WWW.REMINETWORK.COM.

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LEGAL/COMPLIANCE

TRAGEDY ACCENTUATES FIRE SAFETY IN BUILDINGS Oakland warehouse deaths underscore importance of compliance and awareness BY BARBARA CARSS

wner compliance, regulator vigilance and occupant awareness are complementary elements of fire safety that have literal life-and-death consequences in buildings. Following the recent tragic fire in Oakland, California, in which 36 people died in a warehouse that had been improperly turned into residential and event space, fire safety and legal experts are reflecting on the confluence of deliberate and inadvertent omissions that underlie most calamities. “No one should have been living there and no one should have been attending a party there,” reiterates Michele Farley, President of FCS Fire Consulting Services Ltd. “What stands out with this situation is

GTA & BEYOND ■ JANUARY 2017

the number of people who knew it was a problematic building.” Only a small fraction of landlords outright flout requirements for building permits and/or welcome illegal occupancies, but the repercussions of their negligence – as seen in Oakland – can be disproportionately harmful. As a counterbalance, fire safety and bylaw enforcement agencies are often spread thin across vast numbers of buildings. Inspectors typically rely on outside complaints to alert them to situations that need investigation, and on owners’ cooperation to rectify hazards. Notably, a statement from the city of Oakland confirms it had investigated

the offending property just three weeks before the deadly fire. “A city building inspector visited the property and verified the blight complaint, but could not gain access to the building to confirm the other complaint regarding unpermitted construction,” the Dec. 3 release reports. LANDLORDS BEAR RESPONSIBILITY The city has now pledged to delve deeper into the circumstances of the case. Given what’s characterized as the litigious culture in the United States, knowledgeable observers predict the municipality will be sued, but, as in Canadian jurisdictions, building owners are almost always the prime bearers of responsibility.

LEGAL/COMPLIANCE

“Legislation generally protects regulatory workers from prosecution unless you can show recklessness or bad faith,” says Joe Hoffer, a Partner and specialist in municipal and residential tenancy law with Cohen Highley LLP. “If no order has been issued – even if one is threatened – and then there is a fire, there is no reason to conclude that the issuance of an order would have prevented the fire. In every case, the question is whether compliance or non-compliance would have prevented the fire, and that obligation rests with the landlord.” Fire inspectors have the authority to immediately evict occupants and padlock a building when they deem it necessary. In less onerous situations, they issue an order with a deadline for compliance. Based on the degree of risk and the offender’s risk profile, compliance may be confirmed through a follow-up inspection or documentation from the landlord to prove required work has been completed. In other cases, violations can mount over time. Farley gives the example of turnover in industrial buildings where the unit fails to meet the required standards of the new tenant’s building use. Perhaps more often, accumulating clutter creates the dual dangers of blocked exit paths and increased fire loads. “What changes an occupancy from being low to medium to high is based on the fire load,” advises David Gardner, Senior Occupational Hygiene and Safety Consultant with Pinchin Ltd. “So, in a used book store, for example, if there are enough books crammed in there, they could change the occupancy [classification] of the building use.” Clutter also poses particular challenges for residential landlords who must balance safety concerns of the whole tenancy and individual tenants’ rights. “In the context of a hoarder, particularly of paper and other combustible material, the Fire Inspector will order the landlord to cure the problem, but the landlord cannot simply go in and throw out the tenant’s junk,” Hoffer notes. “The landlord has to go through the process of accommodating the hoarder while, at the same time, starting a legal process for eviction.” HAZARD IDENTIFICATION Illegal conversions and occupancies present myriad potential hazards that can dramatically reduce the amount of time available to safely escape from a building.

The fire code mandates detection and suppression systems, fire separations and fire rating of structural components, and prospective building users should never assume these measures are in place unless there is proof of code compliance. Farley also warns of the potential for overtaxing electrical wiring, particularly if large appliances like fridges and stoves are plugged into improper outlets. Under Ontario’s fire code, abandoned buildings are supposed to be secured with fencing, and other measures if needed, to safeguard against illegal occupancies and/or random vandalism that could put people and property at risk. “The message should always be: Public beware,” she asserts. “And it’s not just kids going to some clandestine dance club. I’ve seen health care professionals propping open linen closet doors for convenience, which is a fire code violation. It’s all about education and awareness of risk.”

Farley recommends the Ontario Fire Marshal’s safety guidance for student housing, and calls for equal vigilance when choosing retirement housing and long-term care homes for seniors. "When I was looking with my own mother, I asked about the fire alarm system, sprinklers and evacuation procedures,” she says. Meanwhile, as an example of compliance efforts, she recounts how one community service agency converted donated space into an emergency shelter for the homeless. Consultants measured and ensured appropriate distances from the sleeping area to the exits, designated an area with the most direct access to the exits for patrons with mobility limitations, and implemented a signin and numbered-bed system so that every patron’s location could be easily determined. “It wasn’t that expensive to do that,” Farley observes. “With awareness, there are steps that can be put in place to make people safer.” ■

____________________________________________________________________________________ THE PRECEDING ARTICLE IS REPRINTED FROM THE REMI NETWORK AT WWW.REMINETWORK.COM.

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“We look at a project from a long term perspective because we actually care about how things work long after we’ve completed our work. Our approach is to spend the time up front to ensure the transition from the old to new is seamless and will be most cost effective. We even go to the site after the job is completed and ensure it is exactly as we set out. We are that committed to our work.” - Bill Powell, M.Sc., P.Eng. (President & CEO, McGregor Allsop)

13.8KV Incoming Service & Switchgear Retrofit (2012-2013)

This project involved development of a design for a 13.8KV service including upgrading incoming feeders, updating the electrical room layout and configuration of the replacement switchgear, all within the existing medium voltage electrical room. Five 3MVA dry-type power transformers were replaced along with the 13.8KV main switchboard, 4000A switchboards, medium voltage and low voltage feeders. Coordination with Toronto Hydro was a key element which allowed this project to be completed with only two overnight power interruptions.

Booster Pumps Replacement (January – May 2014)

In order to realize the potential energy savings associated with demand control of the domestic cold water systems the existing constant speed booster pump’s systems in each tower of the facility were replaced with a variable speed triplex pump packages. The new booster pump system automatically adjusts the speed of the pumps to meet the building’s water demands and will save the building over 450,000 kWh in electricity use every year.

Emergency Generator Replacement (2012-2013)

The main objective of this project was to replace two 40-year old emergency power generators located in Tower A and Tower B. This replacement coincided with the upgrade of both the emergency power distribution systems and associated diesel fuel systems in both buildings. The project involved developing system schematics, equipment layouts and performance requirements for the two new 1,000kW emergency generators to ensure code compliance. Outdoor Gensets were selected to minimize the disruption to building operations as fewer power shut downs were required.

Parking Garage Lighting Retrofit (2015-2016)

This project consisted of the design of a lighting retrofit for the two-level public parking garage. More than 1,000 new LED lighting fixtures were used for the underground parking spaces, management office, attendant booths, public corridors and staircases. This project was approved by Toronto Hydro for energy saving incentives paid to the Owner in 2016. “McGregor is my number one choice because of my experience with them. For example, we completed many power shutdowns when we retrofitted the main high voltage transformers at Yonge Eglinton Centre, with absolutely no issues.” - Tony Melo (Director of Building Services , RioCan Yonge Eglinton Centre)

RioCan Real Estate Investment Trust will continue with their plans to upgrade the building systems at Yonge Eglinton Centre to ensure energy efficiency, reliability and state of the art facility status their tenants have come to expect.

McGregor Allsop Limited is a consulting engineering firm with offices in Toronto and Stayner, Ontario. To find out how we can help your building, or for more information about our services, please, call 416-443-9499, email marketing@mcgregor-allsop.com or visit our website at www.mcgregor-allsop.com

MARKET TRENDS

DOWNTOWN DYNAMIC

Steady absorption, but slow rent growth defines Toronto office market

pbeat forecasts for Toronto's office market in 2017 flow somewhat logically from generally positive performance in 2016. Colliers Canada reports a 5.4% vacancy rate across more than 200 million square feet of space in the Greater Toronto Area (GTA) as of late December, with an availability rate of 8.1%. Drilling down to submarkets, the availability rate for downtown office space sits at 6.3% with actual vacancies at just 3%, as some sitting tenants await their moves to the 2.2 million square feet of Class AAA and A space now under construction. The downtown average asking rent was $29.20

GTA & BEYOND ■ JANUARY 2017

per square foot at year-end, ranging from $33.76 for Class AAA to $22.27 for Class B space. Class B is currently the scarcest commodity in the core with a vacancy rate of 2.3% and an availability rate of 3.9%. Slightly more than 900,000 square feet of Class B is available, compared to 1.7 million square feet of Class AAA and nearly 2.2 million of Class A. "Downtown has driven much of the growth," Avison Young's recently released 2016 market overview and 2017 forecast states. "Though demand comes from a diverse mix of tenant groups, Toronto's

reputation as a hub for knowledge workers is growing as these users seek opportunities not only in peripheral brick-and-beam product, but also in core towers." Vacancy and availability rates remain higher in suburban markets, but, in contrast to the central city, all markets and building classes recorded positive absorption in the fourth quarter of 2016. The average vacancy rate across the swath of north, west and south suburban markets largely comprising the '905' area fell to 8.5% from 9% as of September 30, while the average net asking rent came in at $15.92 per square foot.

MARKET TRENDS

GTA west is the largest and most geographically diverse submarket with 12 distinct nodes totalling 543 buildings and nearly 48 million square feet of space. As might be expected, it also exhibits the most variability. For example, vacancy rates range from 3.9% in Airport West to 16.9% in Airport East, but both nodes offer some of the most competitive net asking rents – at $12.40 per square foot in Airport West and $12.69 in Airport East. The average vacancy rate for the total submarket hovers just below 10% with average net asking rents at $16.09. Considerably smaller east and north suburban markets post lower vacancy rates – 4.2% in the east and 7% in the north – while the north node of Vaughan, which is scheduled for a December 2017 tie-in to the Toronto Transportation Commission's extended University/Spadina subway line, hosts all office construction now underway outside Toronto's downtown core. That adds another 175,000 square feet of impending office supply to the GTA total. PROJECTIONS Nationally, analysts forecast rising vacancies over the coming months as new office buildings open in several major markets across Canada. On top of the nearly 6.5 million square feet of space completed last year, another 14 million square feet is still in progress. However, Toronto's adjustment is expected to be much smoother than Calgary's, where Avison Young projects the office vacancy rate will hit 25% in 2017. "Weighed down by Calgary and, to a lesser extent, Edmonton, western markets will lag eastern markets by a wider margin," the recent report predicts. Toronto's steady uptake of a significant volume of new supply has been an ongoing story. Stefan Teague, GTA Executive Managing Director for Cushman & Wakefield points to more than 2 million square feet of absorption over the past two years. More than 8 million square feet of new space has come onto the downtown market since 2009; yet, the vacancy rate is much the same today as it was eight years ago. "Toronto's downtown is one of North America's most powerful growth markets," Teague maintains. "Year after year, we've wondered when the bubble will burst and it simply doesn't. 2016 was another bumper demand year, and we have a large pipeline of clients wanting to occupy significant space in proposed towers in 2017 and well beyond." Meanwhile, investors' interest translates into some of the lowest cap rates in the country. Colliers pegs them in the range of 3.75 to 4.75% for downtown Class A and at 5 to 6% for downtown Class B buildings. Suburban caps are higher – 6 to 6.75% for Class A and 7 to 7.75% for Class B office – and more on par with rates in other Canadian suburban markets. "Given the limited availability of quality product, investors are focusing on generating higher yields through development, primarily in land transactions," observes Demetri Andros, Colliers' Managing Director in Toronto. GLOBAL VIEW From a global perspective, Toronto ranked 16th for volume of direct investment in commercial real estate during the first three quarters of 2016 among 26 cities analysed in JLL's Global Market Perspective, released last fall. The analysis also points to Toronto's slowing rent growth.

Ranked 19th among 20 surveyed cities that experienced rent growth in the 12 months between September 2015 and 2016, minimal growth in Toronto's rent rates fell far behind Stockholm's chart-topping 30% and also below the 3% average. However Toronto outperformed seven cities, including five – London, Mexico City, Sao Paulo, Moscow and Singapore – where rents lost ground. Toronto is grouped among 14 large major metropolises where rental and capital values are projected to increase by up to 5% in 2017. It's also expressly named, along with Paris and Sydney, for notable yield compression (dropping by 10 basis points) over the past year. JLL analysts foresee a tenants' market for 2017 with market dynamics returning to neutral in 2018. The likely impact of new supply pales somewhat when compared to the volumes some other world cities are preparing to add. For example, the equivalent to 41.5% of Shanghai's existing stock is now under construction in that city, while Mumbai has a supply pipeline equal to nearly 16% of its existing stock and vacancy rates nearing 19%. In contrast, office space scheduled to come onto Toronto's market in the next two years represents about 2% of existing stock. Teague suggests there is still appetite for more. "I think it's pretty obvious that we'll hear about more building announcements in 2017," he says. "Downtown Toronto's growth has been phenomenal on both office and housing sides, and we only see increased momentum at this point." ■

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LIGHTING

LIGHTING SETS THE TONE Design and occupant productivity factor into retrofit decisions BY MATTHEW BRADFORD

lot of consideration goes into lighting design. Whether the intent is to turn heads in retail, set the mood in a condo, or convey a corporate brand, the right luminaires in the right hands can go a long way towards defining any space. “The role of lighting designers is to integrate the art, science and business of light,” offers Deborah Gottesman, Principal with Gottesman Associates. “We are the bridge between the infrastructure of electrical engineering, the architect's design intent as well as the owner's practical environmental and budgetary requirements.” “By considering all facets of light, we create beautiful, comfortable, and functional spaces for people to enjoy, which contributes to the value of our clients' properties,” she adds. Delivering that value requires a teambased approach. Lighting designers must work with all project stakeholders to realize the client's vision and do so within the limitations of the project. That includes collaborating with architects and designers at the beginning of a project to determine how lighting systems will factor into the space's physical design and features. “Lighting is critical to architectural design. In fact, many of the great architects of the past have said architecture is about how light creates space,” agrees David Warne, Principal at Group GSA. “Whether the lighting itself is part of the dramatic

GTA & BEYOND ■ JANUARY 2017

sculptural form or is quietly hidden but adding tones, warmth and contrast, it is an important tool in the design tool box. Because of this, the lighting design process is very collaborative between architect, engineer, and lighting designer.” A lighting designer's priority is to bring a client's vision to life. All clients are unique, and their intentions will vary. There are no “go-to” templates to lighting design; it is an organic process that requires all parties to make informed choices well before the first lamp is installed. An effective lighting design starts off with understanding about what tasks are going to be performed in the space that the lighting systems will need to illuminate. This requires clients to take the time to

determine what tone they want to set in their office, condo, or retail environment. Will it be energetic or calm? Modern or retro? Professional or casual? The temptation may be there to rush past these opening questions and select luminaires that simply look good without truly understanding the atmosphere they are ultimately going inherit. Without a basic understanding of lighting options and principles, however, this approach sets up a poor foundation for design. WORKING THE SPACE From welcoming lobbies to luxurious boardrooms, there are plenty of options when it comes to setting a tone. For example, office environments typically

LIGHTING

employ lighting designs that emphasize specific tasks while conveying a comfortable but professional environment through softer tones and edges and indirect lighting. Strategically placed lights can also define work zones and meetings spaces, while accent lighting can be installed to draw visitors' attentions to brand identifiers and interior highlights. All combined, considerations like these can transform a cookie-cutter office into a unique corporate headquarters. Here again, it all begins with a well-defined vision. “You need to know what tasks are involved in the space, who will be using it, what emotions you're trying to evoke, and the key architectural features and elements that need to be considered," advises Ellen Godson, Principal at EFG Lighting Consultants. "On top of all that, you need to determine if there will be any challenges with installation or maintenance, what the client's budget is, and if there are LEED Certification requirements.” These factors are also important when designing lighting for public condominium areas, which include lobbies, amenity rooms, and corridors. Factors such as floor finishes, wall coverings, and architectural highlights come in to play. For residential interiors, designers must also determine whether the goal is to keep people moving or encourage them to linger. To move people quickly through a lobby, for example, one must create a feeling of energy by possibly working with glass and spotlights that reflect off higher gloss finishes. This treatment causes people to perceive more light and glare, making them more alert and more apt to move quicker through common spaces like a front entrance. Alternatively, using subtler lighting sources, more textures in furniture with less gloss, and softer and warmer colour schemes will have the opposite effect. Well-lit condo interiors can also covey the calibre of a building. “Typically, low- to mid-range residences have more uniform lighting from diffuse sources, and higher-end residences have higher contrast ratios with most of the lighting serving to accent interior design elements and materials,” maintains Rhomney Forbes-Gray, Principal with Lightbrigade Architectural Lighting Design. All told, lighting designs are key to defining a space for work, life or play. Drafting an

effective game plan, however, counts on a strong relationship between clients, lighting designers, and related trades. “We have to make sure that the fixtures not only mesh with the vocabulary of the design, but that they are placed appropriately so the effect in the space is what the designers intended,” Gottesman says. “Every space has to be considered on its own merits.” RETHINKING RETROFITS Lighting retrofits are prime opportunities to bolster energy efficiency and redefine the space. As such, building owners and managers would do well to take advantage of retrofits to invest in new lighting assets and designs that will achieve these goals. Lighting retrofit can be either easy and straightforward, or more complex with higher upfront costs. Which path a client takes depends on a number of factors, including the age of the building, its original function, and what purpose it may serve down the road. For example, when retrofitting a space that was designed and built in the 1980s or early '90s, designers consider that the existing lighting wasn’t initially designed for people who are constantly working in front of computer monitors, tablets, and smartphones. As such, replacing 100% existing light levels wouldn’t be appropriate for the people working there today, nor in the future. Measuring the amount of light in the space and the glare from the luminaires are more relevant factors today than 25 years ago. Setting retrofit goals means understanding a building's past, the client's current needs and future expectations. That means understanding why the retrofit is being done and what can realistically be achieved.

Is it to meet an energy savings or capitalize on local utility incentives? Is it to do a complete retrofit or is it to be done space by space? Will the retrofit be sufficient to utilize the existing lighting grid and spread the light as desired or will it require moving and adjusting the luminaires with new lenses to enhance or diffuse the light? Other retrofit considerations include: whether or not existing light controls will play nice with new luminaires; if the project must meet ASHRAE/OBC or other standards; what the client is hoping to get in long-term return on investment; and how long the project is expected to last. Retrofit strategies must take the long-term cost of replacements and maintenance into account. This means calculating total life-cycle expenses and comparing them with upfront investments. “When evaluating the cost-benefit of any investment, clients should be considering the cost of the whole system and looking at the big picture, because per unit cost can be misleading,” advises Gottesman. “Our designs have demonstrated that more efficient – and sometimes more costly – product will result in a layout with less fixtures. This reduces overall materials and labour costs, which translates to lower operating costs for the life of the system, including not only energy and replacement parts, but the owner's manpower required to service the system. These savings are substantially more than our design fees and, in the end, the owners get a cost-effective design that improves the value of their property.” Lastly, it's important to see beyond energy savings when approaching a retrofit. That is, while being eco-friendly and cutting utility costs are worthy goals, one must balance green ambitions with occupant comfort. ■

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REGULATORY UPDATE

STRICTER RULES

AHEAD FOR APARTMENT BUILDING OWNERS Toronto's new bylaw perceived as penalizing good landlords BY ERIN RUDDY

oronto City Council has approved a plan that will impose stricter rules on apartment building owners, but may inadvertently lead to higher rents for tenants. The new regulatory program, which is expected to cost $5 million and to be in place by the summer of 2017, will require rental property owners to register their buildings with the city for an annual registration fee of $10.60 per rental unit and comply with an ongoing inspection regiment. While intended to be a solution to tenant dissatisfaction, over-taxed landlords and building owners in the GTA are seeing the program as just another penalty that will impede affordability. “The real question tenants should be asking is, will this new registration fee increase the quality and quantity of rental housing in the city? The answer is no,” says Scott Andison, President and CEO of the Federation of Rental Housing Providers of Ontario (FRPO). “The city already has the necessary powers to enforce sanctions on landlords operating poor quality buildings. Instead of taking action to help tenants in poorly run apartment buildings, council is focused on simply raising costs on tenants. We think council’s approach is wrong.” On the flipside, City Councillor Josh Matlow and tenant advocacy group, Acorn, have been pushing for an apartment licensing program all year and are positive the new plan will only improve conditions for tenants, requiring that landlords maintain better properties.

GTA & BEYOND ■ JANUARY 2017

“For far too long, too many landlords have been able to keep their buildings in disrepair, leaving renters in shameful conditions without as much accountability and consequences as we need,” Matlow told the Toronto Star following the vote. “This demonstrates that Toronto councillors as a whole recognize that tenants need us to take substantive action to make sure that they are better protected.” To kick start regulatory efforts, city staff will be performing a citywide audit of the 3,500-plus rental buildings and 200,000 rental units that currently house about half of Toronto’s population. Apartment buildings and management will need to meet specific criteria to be eligible for the license, including: having a comprehensive pest management plan that employs only licensed professionals; using licensed contractors for all building repairs; and having a state of good repair capital plan. It will also require a process to track tenant complaints, and ask for hard targets so city staff can ensure issues are being identified and resolved. INDUSTRY RESPONSE While the aim is to penalize bad landlords who aren’t already providing these services, Andison believes the approach is wrong. “The city has now turned its focus on tenants to raise money to finance a bloated bureaucracy. Council is focused on its own well-being, not the well-being of tenants,” he asserts. As a GTA landlord and property manager with more than 500 units in

his portfolio, Adam Kitchener echoes Andison’s sentiments and sees the proposed solution as redundant. “There are already a variety of resources that exist for tenants with long standing complaints, like the Landlord Tenant Board and Public Health,” he says. “Tenants should use these resources if they are in a poorly managed building rather than have the government create yet another program that already exists. Penalties and fines should be given out to individual landlords based on the merit of the complaint or long standing issue. But the majority of landlords, including myself, run quality buildings and address issues in a timely fashion. This is just an added expense to the operator that will inevitably be passed along to the renter.” Kitchener adds that at a time when affordable housing is lacking in the GTA, landlords should be given more incentives to lower their rents, not reasons to increase them. “We have essentially created a service that already exists,” he says. As part of the proposal, a ranking system similar to the city’s DineSafe program, is under consideration. This might consist of a colour-graded sign that apartment building owners would be required to post in their lobbies, indicating their rating within the system. City staff will have until March to draft the bylaw, which would also include the recommended staffing levels and program costs as part of 2017 budget discussions, with the aim of launching the program by next summer. ■

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