GTAAonline Magazine April 2022 by Marc Cote

Vol. 1 No. 4 April 2022

Minimum Parking Requirements ELIMINATED

CMHC Rental Housing Report

Re-introduction of Colour Ratings

AGI Reductions Required

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PRESIDENT’S Message Beware – politicians are on the loose and will say/do anything to get elected. Our provincial election is June 2nd, and May 1st marks to opening of registrations to run in Ontariowide municipal elections that will be held on October 24th. The daily news if full of trinkets and baubles to fortify steadfast supporters as well as to amaze and lure the undecided. Appealing to large blocks of potential voters with little concern for long term ramifications, it’s this kind of short term (election campaign) thinking and policies that have very predictable negative results. It is baffling when the adverse outcomes are foreseeable, but still politely referred to as unintended consequences. Am I alone in this assessment? Don’t act surprised at the ending when you’ve already watched the same movie several times. What’s the solution? Term limits? Private sector prerequisites? Aptitude test? Polygraph??? Policies should be able to stand on their own using facts and data. So true to form during an election year, several Toronto Councillors tried to re-introduce the red/ yellow/green colour-coded ratings for apartment buildings again. Didn’t we just defeat this a year ago? The attempt was made at a recent Planning & Housing Committee meeting but was unsuccessful. Those in opposition used the same rationale we previously raised. They may try again; we’ll keep at it in the background. It’s time to get outside now that the weather has warmed. Come and see your friends and the whole industry at GTAA’s annual golf event on May 26 at The Country Club in Vaughan. We expect a great crowd that can (finally) gather safely and enjoy the outdoors. It’s an early shot gun start, with lunch on the course, followed by our reception and full dinner (mid-afternoon). You’ll be done and on your way home ahead of rush hour traffic. I can’t think of a better way to spend a day. Registrations are open! We will soon distribute our annual scholarship applications. Now in our 8th year, we are providing four winners each with at least $4,000 to help them in their first year of college, university, trade school or apprenticeship. Each year I get to see the appreciation of the recipients and especially their families as we (with the building owner or representatives) present them with their framed certificate and cheque. Immense pride in being selection, and great appreciation for the financial assistance. Happy tears often flow. See you soon!

gtaaonline.com | 3

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4 | April 2022

VOL.1 NO.4 2022

In this ISSUE

Minimum Parking Requirements ELIMINATED for New Developments

Rental Housing 14 CMHC Report

Publisher Nishant Rai

Account Executive Justin Kreslin

Editorial Daryl Chong

Creative Director / Designer Scott Clark

Office Manager Geeta Lokhram

Attempt to Re22 Failed introduce Colour-Coded

Published By:

Ratings

24 26

AGI Reductions

GTAAOnline is published monthly by RHB Inc. on behalf of the Greater Toronto Apartment Association (GTAA) and is distributed online through controlled circulation to the GTAA membership.

Please contact the Publisher for advertising dates and rates. Opinions expressed are those of the authors and do not necessarily reflect the views and opinions of the GTAA Board or management. GTAA accepts no liability for information contained herein.

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Opinions expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the GTAA Board or management. GTAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher. P.O. Box 696, Maple, ON L6A 1S7 416-236-7473 All contents copyright © RHB Inc.

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Minimum Parking Requirements ELIMINATED for New Developments in Toronto

In December 2021, Toronto ELIMINATED parking requirements for new developments. Zoning By-law Amendments to the city-wide Zoning By-law 569-2013 were adopted to modify the current standards for automobile and bicycle parking. For many years, GTAA asked the City to allow rental developers to determine our own parking requirements. We referred to the tens of thousands of vacant parking spaces underneath existing apartment buildings, originally built to meet municipal ratios. GTAA’s most recent (Dec 2021) formal comments included the following excerpt: New purpose-built rental development in Toronto is in chronic undersupply and has been for several decades. A primary reason for this unfortunate situation is the high cumulative cost of creating new rental housing. Any cost input that can be reduced will improve the feasibility of advancing much-needed new rental projects. In a primary rental building, parking can/should be considered as an amenity or a feature. Each development should be able to offer their preferred amenities (study lounge, swimming pool, fitness centre, party/multi-purpose room, BBQs, etc.) to cater to the needs of their residents. The onus is on the builder to determine what to offer to attract and retain customers. The report captures this (page 13): 8 | April 2022

“The significant variation in the proportion of applications that propose parking reductions for different specific uses and building types suggests thawt the current minimums in the by-law do not accurately reflect the level of parking demand in the market for existing land uses and residential building types. Each development has unique circumstances which may be difficult to capture in standards. It suggests a market driven approach, capped with maximums, is more responsive to trends and aligned with public objectives.” Note that the most recent version of Zoning By-law 569-2013 on the City’s website does NOT include the recently approved parking requirement amendments. The consolidated text only includes amendments up to September 15, 2021. Contact GTAA if you wish to be advised when the new version is available. For now, here’s the essence of what was approved, as well as the rationale. The staff report justified the update to better manage auto dependency and achieve a better balance between building too much or too little parking and how it contributes to building more sustainable and healthy communities. It stated the “City is facing several major challenges including a climate emergency; decreasing housing affordability; and increasing demand for mobility. While not sufficient on its own to overcome these challenges, more strategic, thoughtful management of the parking supply will contribute to addressing all of these challenges.” gtaaonline.com | 9

To achieve Toronto Council’s net zero target, their report recommends that aggressive action needs to be taken to curb transportation related emissions. They stated, “Minimum parking requirements lead to the overbuilding of parking and support the continued growth of those emissions. Introducing maximum parking permissions will slow that growth in automobile use and resultant emissions.” More useful was the reports financial analysis, which keenly noted: “Housing affordability is a significant challenge in Toronto. The cost of constructing and maintaining parking is significant; minimum parking requirements limits households’ ability to avoid those costs. Further, minimum parking requirements may result in households in multi-unit residential buildings who do not own automobiles subsidizing the cost of parking for other residents of the building who do. This is inequitable, as higher-income households are more likely to own automobiles.” Apartment Households in Toronto by Income with/out a Car (Toronto Transportation Tomorrow Survey, 2016)

Household Income

Number of Apartment Households in Toronto Without a Car

Number of Apartment Households in Toronto With a Car

Proportion of Apartment Households in Toronto that are Without a Car

$0 to $14,999

45,842

19,928

70%

$15,000 to $39,999

77,340

71,395

52%

$40,000 to $59,999

44,186

71,822

38%

$60,000 to $99,999

49,640

106,385

32%

$100,000 to $124,999

12,515

39,079

24%

$125,000 and above

11,696

54,382

18%

Decline / don't know

39,901

60,191

40%

Apartment Households in Toronto and Proportion with/out a Car (Toronto Transportation Tomorrow Survey, 1986-2016)

Year

Number of Apartment Households in Toronto Without a Car

Number of Apartment Households in Toronto With a Car

Proportion of Apartment Households in Toronto that are Without a Car

1986

120,198

236,924

34%

1991

136,324

259,332

34%

1996

169,269

257,723

40%

2001

178,316

293,880

38%

2006

183,663

250,993

42%

2011

170,783

278,073

38%

2016

281,120

423,177

40%

10 | April 2022

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TORONTO David Montressor* Vice Chairman david.montressor@cbre.com 416. 815. 2332 TORONTO Tom Schuster* Associate Director tom.schuster@cbre.com 416. 847. 3257 WATERLOO REGION James Craig* Vice President james.craig2@cbre.com 519. 340. 2330 LONDON Kevin MacDougall** Associate Vice President kevin.macdougall@cbre.com 519. 286. 2013

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It’s imperative to look at the data to make fact-based decisions. Here’s how society has changed over time. The report also states: Easily available parking encourages people to drive more often. More people driving contributes to worsening traffic congestion, slowing transit operating in mixed traffic and making it more difficult to improve travel conditions for alternatives like transit, walking and cycling. To accommodate the growing demand for travel that will come with the City’s growing population and employment base, the City will need to promote more space efficient modes of travel and discourage automobile travel. Recognizing these challenges, this review of the parking standards in the city-wide Zoning By-law 5692013 was guided by the principle that parking standards should allow only the maximum amount of automobile parking reasonably required for a given use and minimums should be avoided except where necessary to ensure equitable access. New developments will still have to provide adequate parking onsite, and not assume residents will be able to park on street. Among other things, the approved amendments do the following: • Create two new Parking Zones to administer the recommended parking rates; • Group existing land uses into categories to simplify and reduce the number of parking rates; • Eliminate most minimum parking standards; • Introduce maximum parking standards where they do not already exist, for most uses; • Eliminate the use of Parking Occupancy Rates;

• Maintain or increase accessible parking requirements; • Introduce requirements for electric vehicle infrastructure and permissions for charging equipment within required parking space dimensions; • Increase “short-term” bicycle parking rates for residential uses in Bicycle Zone 1 and introduce a payment-inlieu of bicycle parking provision; • Amend zone-specific regulations related to parking to accommodate the replacement of parking minimums with parking maximums; and • Introduce other requirements to support low parking rates. The transition from an automobile-dependent city will be a slow process occurring over many years. So, it will be status quo for the regulations in the Zoning By-law which require existing parking to be maintained when there is a change of use, and the introduction of amended regulations which permit existing parking to be maintained when it exceeds the permitted amount. This is to ensure that a sudden parking short-fall is not inadvertently created, while still shifting travel from cars to preferred alternatives. For existing buildings which are subject to site-specific parking rates in the zoning bylaw, the City will still consider applications to permit lower parking supplies but they must be supported by parking studies which demonstrate that the reduction would not have a negative impact on the surrounding area. GTAA has been trying to obtain flexibility to use mothballed parking levels for other uses, and the removal of the minimum requirements for new developments will help with this ongoing pursuit. The full report is HERE.

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We are observing a very strong start to the year for Ontario’s multiresidential investment market. Investor sentiment remains strong among a wide range of active purchasers and transaction volumes are maintaining the elevated levels witnessed in 2021. Based on current listing activity, the market is providing a strong indication that values will continue to appreciate in the first half of 2022, notwithstanding a significant increase in interest rates during Q1.

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David Montressor * Vice Chairman (416) 815-2332 david.montressor@cbre.com

Tom Schuster * Associate Director (416) 847-3257 tom.schuster@cbre.com

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CMHC’s annual rental market report

The lingering effects of the pandemic continued to impact demand in the purpose-built rental market negatively and led to a second consecutive annual increase in the vacancy rate. Despite increased rental supply, the stock of units more affordable to low- and middle-income renter households declined. “Demand in the purpose-built rental market continued to be adversely affected by the pandemic, while demand returned to pre-pandemic levels for condominium rentals,” said Dana Senagama, Senior Specialist for the Greater Toronto Area (GTA) at Canada Mortgage and Housing Corporation. Average rent growth for apartments slowed to its lowest level since 2007 owing to increased competition among landlords and provincial pandemic response measures limiting rent increases for existing tenants.

14 | April 2022

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The vacancy rate in the condominium rental apartment market held steady as a substantial increase in demand was met by a comparable supply response.

Vacancy rate increased for the second year in a row Less demand and more supply caused the average purpose-built rental apartment vacancy rate to increase for a second consecutive year in the GTA, reaching its highest level on recent record. It moved to 4.4% in 2021, up from 3.4% a year ago. Worth noting is that the 10year historical average for the vacancy rate in the GTA was just under 2%, which suggests a persistent supply-to-demand challenge over much of the last decade. As well, vacancy rates for less expensive units more affordable to low-to-middle income renter households remained well below the GTA average in 2021.

Economic impact of COVID-19 and competition from condo rentals impacted demand negatively Throughout 2020 and 2021, Ontario faced more stringent COVID-19 pandemic containment measures compared to other regions of the country. Within the province, these measures were often implemented first, lasted longer, and were more pronounced in the GTA, where virus case counts tended to be higher over the pandemic’s successive waves. The measures continued to disproportionately impact service-sector industries that were more reliant on in-person interactions. This delayed the economic recovery for segments of the population that were more likely to rent, such as youth and low-to-middle income households. The decline in rental demand for the latter is likely observed (i.e., fewer units affordable to households in the second- and third-income quintiles were occupied in 2021 as compared to 2020). Another factor keeping vacancy rates elevated in the GTA, especially within Toronto’s urban core, was the continuance of remote working arrangements for many workers. Data from the Toronto Region Board of 16 | April 2022

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Trade’s Recovery Tracker/TELUS Insights indicated that the volume of in-person workers in the metropolitan center and the financial district was down 31% and 77%, respectively, in October 2021 relative to the same month in pre-pandemic 2019. With the ability to work remotely, many renters left the urban core searching for less expensive accommodation elsewhere. While some returned in the latter months of 2021, it was not enough to reverse the move from the area observed in the 2020 data, nor was it enough to absorb additional supply. Consequently, the vacancy rate in the former City of Toronto increased from 5.8% to 6.7% in 2021, remaining the highest among the GTA’s different sub-markets. Finally, a considerable number of condominium apartments entered the GTA’s long-term rental market in 2021 nearly seven times the number of purpose-built apartments added. This was likely due in part to stricter regulations in place for short-term rentals. A notable increase in the supply of condominium rental units may have drawn some demand away from the purpose-built apartment market and contributed to its higher vacancies.

Rising cost of homeownership likely increased rental demand among higher-income renters Rental demand increased for units that would only be affordable to those earning higher incomes. Demand among these presumed higher-income renters was likely attributable to those at the margin between renting and owning. It’s safe to assume that a share of these individuals either did not have the necessary down payment or could not afford the monthly carrying costs associated with entry-level homeownership (the average condominium), both of which increased in 2021.

The nearest substitutes would have been high-end purpose-built or condominium apartment rentals, which both saw increased demand. Comparatively higher vacancies for these more expensive units throughout the pandemic provided ample options for prospective renters. Despite this assumption, higher-income renters could not offset the lost demand from low-tomiddle income earners.

Rental supply expanded, but units affordable to low- and middle-income renters declined When accounting for changes to existing structures, demolitions, conversions, and new construction, the GTA’s purpose-built rental apartment universe expanded by 1,609 units or 0.5% in 2021. This pace of growth was above the 10-year historical average. 18 | April 2022

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The stock of row and apartment units affordable, at 30% of monthly income, to low- and middle-income renter households decreased from RENTAL the previous year, down 0.6% and MARKET 0.4% for the second- and thirdREPORT income quintiles, respectively. The physical removal of units from the survey universe was the most likely explanation for the decline. Our data indicates that removals in 2021 due to demolition, condominium conversion, or for the owners’ own use, were concentrated mainly in the City of Toronto. Comparing rents for units that were common to both the 2020 and 2021 October Rental Market Surveys (i.e., same-sample average rents) provides an indication of rent increases paid by most tenants. Meanwhile, the average rent for new supply - completed over the three years ending in June 2021 - entering the market was 43% higher than the average market rent for all units. Stay Informed Subscribe Using the 30% of income approach, these newer units, renting for an average of $2,222, would only be affordable to higher-income renter households in the fourth- and fifth-income quintiles. HOUSING MARKET INFORMATION

CANADA AND SELECTED MARKETS DATE RELEASED: FEBRUARY 2022

cmhc.ca/housingmarketinformation

cmhc.ca/researchnewsletter

Rent growth in purpose-built market slowed to lowest level since 2007 Same-sample average apartment rents increased by 1.3%. This was notably lower than the increase recorded in 2020 (4.7%) and was the lowest rate of growth observed since 2007. This slow increase was attributable to more competition among landlords and provincial pandemic response measures limiting rent increases for existing tenants. In the City of Toronto, more heavily impacted by the pandemic, growth was lower at 0.7% (down from 4.6% in 2020). CMHC strongly believes that better, more informed housing decisions are made with the availability of quality housing market data and insights. CMHC’s reporting on the rental markets has been mainstay of the sector for over 50 years. The data and analysis gathered provides a common language for businesses, governments, and the general public to discuss rental market issues and developments. CMHC conducts the annual Rental Market Survey in October. The survey is conducted through property managers, landlords, and owners across all centres with a population of at least 10,000. It targets only privately initiated structures with at least three rental units, which have been on the market for at least three months. For more information on CMHC’s Rental Market reports or data tables for Canada’s 22 CMAs visit CMHC’s website. 20 | April 2022

Canadian Renter’s Insights Survey

51%

of Canadian renters are planning to move when their current lease is up.

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Failed Attempt to Re-introduce Colour-Coded Rating Signs On March 25, 2022 Toronto’s Planning and Housing Committee meeting included an information report simply titled “RentSafeTO Update Report” providing an update on a variety of matters, including some recent statistics and some general details of work in progress. However, several Councillors took this opportunity to re-introduce the colour-coded rating system. Buoyed by more than 20 deputations by tenant activists, which included a live stream of one deputant’s collection of cockroaches in plastic bags, the following was tabled (but LOST): 1a - Motion to Amend Item (Additional) moved by Councillor Kristyn Wong-Tam (LOST) That: 1. City Council direct the Executive Director, Municipal Licensing and Standards to develop colour-coded rating signs to include red, orange, yellow, and green based on the evaluation score of the building and with identifiers for each category as follows: red - “unsatisfactory”, orange “needs improvement”, yellow -“needs some improvement”, and green “pass” and to report back to the Planning and Housing Committee in the Fourth Quarter of 2023 on the efficiency and effective of the program implementation and equity outcomes. 2. City Council amend Toronto Municipal Code Chapter 354, Apartment Buildings, as follows: a. Require apartment building owners and operators to post a rating sign in a form satisfactory to the Executive Director, Municipal Licensing and Standards, displaying the evaluation score of the apartment building near the entrance and in a prominent location visible from the outside the apartment building to those entering or passing by the apartment building. b. Require apartment building owners and operators to ensure the rating sign is current, well-maintained, secured, and posted at all times. 3. City Council direct that the changes to the Toronto Municipal Code Chapter 354, Apartment Buildings come into effect on February 1, 2023, and are implemented in a phased approach to align with the changes already underway to the evaluation tool. Some other motions were adopted, including: 1. Direct the Executive Director, Municipal Licensing and Standards to carry out the following actions and to report back to the Planning and Housing Committee in the First Quarter of 2023: a. provide comprehensive and consistent training to every By-Law Officer on how to properly and adequately identify and manage pest infestations, mold growth, electrical problems, and other common issues; b. determine and explain the consistent criteria on how By-Law Officers determine that a case is “closed” and the process for communicating this to residents; c. identify how many additional By-law Officers would be necessary to ensure the optimal functioning of RentSafeTO and additionally report back this information through the 2023 budget process; and, 3. investigate the feasibility of creating a system of implementing financial penalties to landlords based on noncompliance. Note that the formal RentSafeTO Update Report by City staff clearly stated: “At this time, there would be substantial complications and costly delays in the development of the evaluation tool if staff were asked to reconsider the colour-coded rating system. With the introduction of a score that is more dynamic and responsive (as a result of including more frequently updated data) the reliance on colourcoded physical signage in/on buildings is no longer expected to be a practical option. The preferred way to share the current evaluation score for a building will be using RentSafeTO’s public facing web pages.” Despite the clear and obvious explanation by City staff, several Councillors bent on introducing the colourcoding did so for political reasons, made another attempt. The common lie used by proponents of colour-coding is that “the only opponents of the colour-coded rating system is the apartment owner lobbyist / apartment owners”.

22 | April 2022

Rent Reductions for Expiring AGIs Approved Above Guideline Rent Increases (AGIs) for capital expenditures carry with them a requirement that there be corresponding rent reductions when the “weighted expected useful life” of the capital expenditures expire, usually 10 or more years after the AGI order issues. The AGI orders have a schedule advising landlords and tenants that the rent increase given to named tenants as authorized by the order must be backed out of those same tenants’ rents many years later if they are still living in the building at the end of the useful life period. The process to reduce the rent can be very simple (single capital expenditure, or single year increase) or it can range in complexity where there are multiple useful life items; “phased in” increases; or, where the LTB approves a second AGI for capital expenditures during the term of the first approved AGI. Since the requirement to reduce rent only applies to those tenants whose rents were increased above the Guideline in accordance with the order, and since the order may have included components other than capital expenditures, GTAA strongly recommends that you seek expert advice and guidance from a qualified rent control consultant to ensure you properly calculate and apply the rent reductions, per RTA requirements.

Useful life The useful life set out in AGI orders is the LTB’s determination of the number of years over which the landlord is entitled to recover, from tenants who are parties to the application, the cost of a capital expenditure allowed in the order. The following rules are applied by the LTB in determining the number of years over which the capital expenditure allowance is built into such tenants’ rents: • where the useful life set out in Column 2 of the Schedule to O.Reg. 516/06 is less than 10 years, the useful life of work done or a thing purchased is deemed to be 10 years; • where a thing is purchased and has previously been used, the remaining useful life of the thing is determined taking into account the length of time of that used item;

24 | April 2022

• if the work done or thing purchased is not in the Schedule, the useful life of the work or thing is determined with reference to items with similar characteristics that are in the Schedule; and • the useful life of work done or a thing purchased shall not be determined to be less than 10 years. If the useful life of work done or a thing purchased cannot be determined because the work or thing is not in the Schedule and nothing with similar characteristics is in the Schedule, the useful life of the work or thing will be what is generally accepted as the useful life of such work or thing. In no case will useful life, and by extension the years over which the capital expenditure allowance in the AGI order will be granted, be less than 10 years. Where an AGI order includes multiple eligible capital expenditures with different useful lives, an overall blended useful life may be calculated for all the capital expenditures. This is done by determining the allowable expenditure related to each claim, dividing it by the total for all capital expenditures approved and multiplying it by the useful life for that claim. The useful lives for all the eligible capital expenditures are then added and rounded to the nearest full year. This results in a weighted useful life for the capital expenditures for each unit subject to the application and the corresponding number of years over which the capital expenditure allowance in the order may be included in a tenant’s rent.

Rent decrease If the tenant who is subject to an AGI order is still occupying the rental unit when the weighted useful life has ended, and if that tenant paid all or part of the ordered rent increase at the time for which the AGI order issued, the landlord must reduce the rent by the percentage AGI increase given to the tenant per the order. This requirement is specified in the AGI order issued by the LTB. The regulation sets the rules for calculating the date the rent decrease can take place and the rent reduction must occur on the day before the applicable anniversary date of the ordered rent increase.

GTAA is of the view (this is not a legal opinion; please obtain expert legal advice) that a phased increase (ie, above Guideline increase each year for 2 or 3 consecutive years) should be subject to a phased rent decrease upon expiry of the useful life period (ie, a corresponding decrease per year for 2 or 3 consecutive years). Again, there are complex situations. For example, if there were multiple capital expenditure AGIs years ago and the useful life of those expenditures ends over multiple consecutive years, there may be multiple rent reductions required over consecutive years. It is also possible that while a sitting tenant’s rent is being reduced (first AGI end of weighted useful life), they could possibly also see an increase via a more recent capital expenditure AGI order. There may also be instances where a landlord did not increase the rent by the full amount permitted by the AGI order when it issued, in which case the affected tenant’s rent is not reduced by the full amount of the ordered increase, just by the increase attributable to capital expenditures as received by the tenant at the time. Properly applying the applicable rent decrease for tenants who have remained since the time the AGI order issued is not optional. While tenants do not receive notice that the ordered AGI has expired, ignoring the decrease could result in significant cumulative overpayment and orders against landlords for the collection of “illegal rent” from the LTB. Many 15-year AGIs are now ending for early applicants. In cases where the property has changed hands and proper records were not turned over or maintained, landlords may be caught unawares of the liability and risks associated with their current revenue streams. This will become a growing matter over the next few years as AGIs and transfers of rental

26 | April 2022

properties have become more common across the multi-res industry, particularly in the GTA.

Apartment owners should maintain: (i) an accurate record of all AGI orders issued for their buildings; (ii) an up-to-date list of tenants who, at the time of the order, were parties to the application; (iii) a record of the actual amount of rent increase charged to the tenant (ie: a landlord may have expected an AGI increase of 2% but the order may have allowed and increase of 2.5%, in which case the rent reduction would be 2% not 2.5%); (iv) a record of the expiry date of the capital expenditure allowances given in the AGI order so that the date for rent reductions can be determined; and, (v) a record of which current tenants were parties to the initial AGI order as those are the only tenants to whom the rent reduction must be given. Using the records listed above, landlords will be in a position to comply with the RTA requirement for rent reductions when the AGI allowances expire. Purchasers of apartment buildings should ask for such records from vendors to determine future revenue stream. Again, this article is not legal advice, but is intended to ensure that landlords are not caught unawares by tenants seeking recovery of illegal rent; to ensure that landlords know their legal obligation to reduce rents; and, to ensure reliable revenue projections in situations where a revenue stream is subject to rent reductions due to a past AGI order. Please obtain expert legal advice and guidance to ensure compliance.

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Digital marketing insights for the future of property management By Peter Altobelli, Vice President and General Manager, Yardi Canada Ltd.

With the prospect of homeownership becoming increasingly challenging for many prospective buyers, renting is becoming the most feasible option — especially for younger Canadians. The national aggregate cost of a single family home increased almost 43% from March 2020 to December 2021, resulting in only five of the 42 markets being classified as “affordable,” according to the 2021 Canada Real Estate Market Outlook.

• Social media marketing that uses popular

Even with annual completions of new rentals exceeding 50,000, the industry will struggle to close the gap between supply and demand as the Canadian population continues to grow. All this suggests capital will continue to flow into the rental market and real estate professionals will need to carefully prepare and plan for the next generation of renters.

Implementing a holistic approach

The future of property management includes a holistic digital marketing strategy focused on both attracting and retaining residents.

Opportunities for digital marketing The COVID-19 era opened opportunities for rental property owners to adopt online capabilities and software to meet customer expectations for rapid and safe engagement. In fact, more than half of respondents to Informa Canada’s 2021 Multi-Res Tenant Survey found their ideal rental units through electronic means such as an ILS or property website. About 70% of renters visited the landlord’s website, with almost half saying the visit influenced their decision to rent. These findings signify a fundamental shift from utilizing a website as a marketing channel to including the website as part of the tour. The growing prominence of websites in the multifamily marketing and leasing process has triggered a move toward digital marketing that relies on electronic devices. Key elements of a digital marketing strategy include:

• Search engine optimization (SEO) that improves search result rankings and increases organic website traffic.

• Search engine marketing (SEM) that uses paid online advertising to boost website visibility search results.

• Pay-per-click (PPC) ads, a flexible SEM strategy in which a business only pays when somebody clicks on its ads.

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platforms such as Facebook, Instagram and YouTube for brand amplification and engagement.

• Content marketing that creates helpful and easily accessible resources for customers. Options include articles, blog posts, podcasts and videos.

• Email marketing that can nurture and build relationships with prospects and residents.

The new renter’s journey should be frictionless, from accessing listings and completing applications to submitting payments and renewing leases. Today, leasing activity begins on the website, putting a greater focus on immediate, mobile-friendly experiences that hold visitors’ interest. But how else should websites be optimized? Property managers can attract more prospects by showing them what it’s like to live in the community. As a part of an SEM or social media strategy, showcasing the property should include sharing engaging floor plans, interactive property maps, detailed lists and photos of amenities and multiple tour options such as video, 3D and self-service. As the prospective renter explores the website, community managers can encourage engagement with a chatbot. Over the last year, artificial intelligence has innovated software apps to “learn” with experience and adapt to human conversation, which improves future interactions with prospects and residents. This tool also prepares you to communicate and connect with Gen Zers, the largest generation ever, as they enter the rental market. And when the customer is ready to apply, leasing teams can use advanced screening software that has access to credit reports, rental payment histories and even international information. All are crucial features as more renters enter the market and properties compete for quality tenants.

Integrating resident services Resident portals and apps have become another essential tool for marketing and leasing success. According to the Informa Canada 2021 survey, nearly 70% of renters currently use or want a tenant portal. Over two-thirds of respondents would like to communicate with their landlords electronically via a

portal but only about half do. And 73% expressed a desire for online payment options, such as an app, e-transfer functionality or online pre-authorized debit. Portals and apps are beneficial as they help reduce communication barriers between staff and tenants. Having easy mobile access to account details and more removes the need for residents to call the office for minor details (an option also preferred by Gen Z).

Understanding ROI One of the smartest ways to improve customer service and marketing results is to have staff focus on highquality leads. To identify prospects that are likely to convert, lead attribution tools in modern customer relationship management (CRM) software can help. Multi-source lead attribution data shows where every lead came from and all the touchpoints they interacted with before filling out a guest card or scheduling a tour. These sources go beyond ILSs and include organic search results, paid ads, review sites and social media platforms. With this information, you can redistribute your marketing budget to advertising sources that are proven to work. A high quality of leads is more valuable than a high volume of leads and will get your staff excited about following up.

Advanced CRM software provides more than lead attribution, it empowers staff with automation tools and lead routing. This helps staff to meet hyperrelevant touchpoints with minimal manual effort, freeing up time to have more in-person interactions.

Final takeaways The pandemic enforced unforeseen improvisations within multifamily operations and has opened the door to wide-ranging technology options. Such platforms are now critical for a seamless renter lifecycle and higher tenant retention. Property managers that have leveraged an integrated digital marketing strategy in 2021 should not be concerned about the next phase of normalization. They are assured a competitive edge over businesses that continue to implement historically traditional leasing tactics. Only forward-thinking rental organizations can confidently say they will be able to grow their business in the years to come. For more information on property management technology, visit yardi.com.

GTA40_GolfFundraiser_HPHad2_Layout 1 22-03-07 3:26 PM Page 1

OUR MAIN FUNDRAISER EVENT IS BACK! AT T E N D & S P O N S O R

2022 GTAA’s Annual Golf Fundraiser IN SUPPORT OF OUR C H A R I TA B L E F O U N DAT I O N

May 26, 2022

The Country Club (Vaughan)

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Concept 2 Keys Priority Development Review Stream Enhancements Toronto’s Priority Application Stream, was launched as a pilot in January 2021 to focus on prioritizing and expediting approvals of affordable housing projects. The intent of this review stream is to support one of the City’s key strategic priorities of maintaining and creating housing that is affordable, as well as supporting the implementation of the HousingTO 2020-2030 Action Plan. There are 28 development applications for 20 development projects, including 18 priority affordable housing projects and two private purpose-built rental projects in the Priority Development Review Stream. The average time for City staff to review and provide comments to the applicant has been five weeks per round of review; down from a City-wide average duration of eight to nine weeks per review round. Together, these affordable housing projects propose 2,190 affordable units. For many years, GTAA has advocated for a concierge service for purpose-built rental applications, as a means to help relieve the chronic undersupply on new units. In June 2021, GTAA’s formal submissions to Toronto’s Planning & Housing Committee stated: There is a shortage of purpose-built rental in Toronto with insufficient new supply over the past forty years. GTAA Member’s goals of providing considerably more rental housing are aligned with the City’s. Apartment developers want to fill the need and build new rental housing units and have been keenly following Concept 2 Keys (“C2K”). Although the Phase 1 sample size is small, the early results are extremely positive. We appreciate the concierge service and nimble problem-solving teams that have been created. For years, rental projects – many including affordable units – have been delayed by lengthy response times especially during the recirculation of changes. C2K is working to remedy this and allows for increased collaboration and a better coordinated review process. Project focused individuals and smaller teams of key decision makers will allow proper file management and result in shorter wait times. We applaud your efforts in Phase 1 and look optimistically toward the planned roll out and future expansion, and the honing of C2K.

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Moving forward we request that purpose-built rental projects that include affordable and midmarket units be considered as priority projects. Together we can bring many much-needed rental units to market. In October 2021, City Council directed that the Priority Development Review Stream transition from a pilot to a permanent service and that staff report back to Council with a plan to expand the service. Based on the experience and lessons learned from the pilot period in 2021, a report tabled in February 2022 recommended enhancements to C2K. These include: • 16 permanent positions to staff the Priority Development Review Stream  7 in City Planning  4 in Engineering & Construction Services,  2 in Transportation Services  1 in Parks, Forestry & Recreation  2 in Concept 2 Keys The 16 noted positions have an estimated cost of $1,853,000 assuming senior staffing complement. Much of this will be recovered by Application Fees. Additionally, Toronto will apply for $1,750,000 in one-time funding from the Provincial government from the Streamline Development Approval Fund. Of the pilot, the report noted the following staff experience: “By working together in a close-knit interdivisional team, they developed the relationships to quickly contact each other to get a question answered or work through items that affect multiple review sections. The team developed an understanding and appreciation for the objectives of the other members of the review team. The Application Management function supported the review team in establishing achievable targets, coordinating priorities, and tracking and managing application issues. This teams-based model is also being applied outside of the Priority Development Review Stream as it has proven successful in accelerating review timelines.” As staff levels increase, more applications will be placed in the Priority Development Review Stream, and more will be approved faster than before.

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