RHB Magazine January 2020

Vol. 12 No. 6 January 2020

Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives

The official publication of:

Understanding tenants and the rental housing market

CFAA Proposed interest limitation rules could devastate rental housing

What’s going on in Halifax’s rental housing market?

Halifax has the lowest overall vacancy rate in Canada.

Appealing your property tax assessment Review your property tax assessment to make sure you only pay your fair share.

How do you control utility costs?

Reduce utility consumption and costs with a built-in energy intelligence solution. Increase cost recovery with seamless resident utility billing and save money on late fees with paperless utility invoice processing. Get valuable analytics and actionable insights to increase visibility and control.

A single connected solution for energy management

888.569.2734 Yardi.com/Energy Š2019 Yardi Systems, Inc. All Rights Reserved. Yardi, the Yardi logo, and all Yardi product names are trademarks of Yardi Systems, Inc.

Project Management | Building Science | Structural Engineering | Roofing Surveys | Condition Assessments | Asbestos and Mould Surveys

1.888.348.8991

McIntoshPerry.com We’ve encountered every possible building-related issue over our five decades of history. With more than 500 engineers, project managers and technical experts across the country, we provide a full range of services to the rental housing industry.

EDITOR’S NOTES Welcome to a new year and a new decade It feels like I’m living in the future. We’re living in 2020! Many science fiction movies take place around this time. Where’s my flying car and robot butler and teleportation device?

Sure, we can 3-D print skin and organs, but I can’t put my brain in an android body. Still, I’ve been around before the Internet and smartphones and self-driving cars, and had to watch television with only 12 channels when I was kid. So, we’ve come a long way.

The January issue of RHB Magazine features an article on analyzing trends and data related to the rental housing industry and tenants’ preferences. We pored through data from a number of sources, and uncovered some interesting findings on what to look forward to in 2020. Building owners and property managers should pay close attention to our analysis, as they can learn a lot about what current and prospective tenants want in their rental properties.

We have an interesting article on what’s going on in the Halifax rental market. Did you know that it has the lowest vacancy rate in Canada? CFAA’s Rental Housing Conference will be there in June, so you might want to check out the city to see what’s going on while you’re there. We also have an article on appealing property tax assessments. Many building owners across Canada will have received their assessments, or it’s coming in the mail, so make sure to check out your current assessment and pay attention to the deadline for filing an appeal.

Don’t forget to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. Of course, we always enjoy hearing from our readers, and we want to support twoway communication. If you have any comments or questions, send them to david@rentalhousingbusiness.ca. I look forward to hearing from you.

Co-founder, Publisher

Marc Côté marc@rentalhousingbusiness.ca

Co-founder, Director

Juan Malvestitti juan@rentalhousingbuisness.ca

Editorial

David Gargaro david@rentalhousingbusiness.ca

Contributing Editor

John Dickie, President CFAA jdickie@rentalhousingbusiness.ca

Creative Director / Designer Scott Clark

Associate Publisher Nishant Rai

Office Manager Geeta Lokhram

Subscriptions

One year $49.99 Cdn Two years $79.99 Cdn Single copy sales $9.99 Cdn Opinions expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the CFAA Board or management. CFAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher.

P.O. Box 696, Maple, ON L6A 1S7 416-236-7473

Enjoy the issue!

David Gargaro Senior Editor

4 | January 2020

Produced in Canada All contents copyright © RHB Inc. Canadian Publications Mail Product Sales Agreement No. 42652516

What makes this compactor smart?

iSMART technology sends alerts and provides compactor diagnostics in real time. With the data it collects, we’ll reduce your service calls, limit downtime and save you money.

If you want to optimize your waste stream, call us at: 416 743 8484 ext. 2

rentalhousingbusiness.ca | 5

CONTENTS

VOL.12 NO.6 2020

What’s going on in Halifax’s rental housing market?

Halifax has the lowest overall vacancy rate in Canada, and rents are on the rise.

RHB’s forum for rental housing associations to share news, events and industry information

Understanding tenants and the rental housing market

RHB Magazine analyzed data acquired from multiple sources to

Hot Topics: WRAMA summarizes the information presented recently to the City of Kitchener Council about rental housing issues, and provides information about making your property smoke-free. pg. 45

help building owners and property managers understand renters’

EOLO presents the City of Ottawa’s decision on rental regulation, explaining the new property standards plan that has been adopted instead of landlord licensing or registration, and also reports on the effect of the new Ottawa water and sewer charges. pg. 49

preferences and identify rental housing trends.

HDAA provides an update on the rental licensing debate in the City of Hamilton, and its recent dinner meeting, as well as announcing its upcoming events. pg. 53 LPMA discusses the recently proposed City of London plan for increasing affordable housing supply, as well as how to restrict window air conditioners for the safety of tenants and others. pg. 57

The Member Associations

Regional Association Voice Regional Association Voice features the latest industry news from four member associations.

Appealing your property tax assessment Make sure to review your assessment notice, and send in your appeal before the deadline.

6 | January 2020

Suite Count Looking ahead to 2020 in the Canadian multifamily market.

Proven Professional Paving Services Commercial • Industrial • Residential Bonded • Insured

Over 60 Years of Experience (905) 842-4141

www.awesleypaving.com

PRESIDENT’S CORNER On the federal political front, the federal government’s review of the capital gains inclusion rate remains a major concern, but it is probably not an immediate concern for Budget 2020.

As this goes to print, the immediate political concern at the federal level is the Liberal Party’s election platform proposal to prevent all corporations from claiming for tax purposes more interest than 30 per cent of the corporation’s “earnings before the deduction of interest, taxes, depreciation and amortization” (EBITDA).

That seemed like a technical tax reform, and as such, it flew under the radar for most people during the election. However, EBITDA is similar to net operating income (NOI), and because rental operations use a great deal of capital, most rental operations pay out more interest than 30 per cent of the building’s NOI; and in their initial stages, many new operations pay out much more than 30 per cent.

Such a new interest deductibility limit would dramatically increase the income taxes on most rental real estate of all asset classes, and dramatically reduce actual after-tax income, or even produce substantial losses.See page 35 for more details about the issue.

CFAA urges the government not to go forward with any expansion of the interest deductibility limitation. At the least, we urge the government not to apply an expanded test to the real estate sector, and in particular, not to apply an expanded test to the rental housing sector.

Rental housing providers need to raise their voices on this issue. For the policy arguments against the proposal, see CFAA’s submission to the government at www.cfaa-fcapi.org.

Updates on the status of the issue and CFAA’s work on the issue will also be posted there.

8 | January 2020

Also in this issue of National Outlook, you will find information about two of the buildings CFAA will tour in the afternoon of Monday, June 8, in Halifax, as part of CFAA Rental Housing Conference 2020. See page 40.

The 2020 CFAA Rental Housing Awards Program is currently accepting applications.

See page 41. The award winners will be announced at the Awards Dinner on June 9 in Halifax. We hope to see you there!

CFAA’s strategic partnership with Home Depot is exceeding expectations. Just when we need more resources to fight the tax issues, Home Depot’s contribution to CFAA will exceed the budgeted amount. If you buy maintenance and repair supplies from Home Depot, make sure you have registered your membership in CFAA (including our association members in most provinces) with Home Depot!

Help your bottom line, and help CFAA fight for your interests (and your interest claim with CRA)!

John Dickie, CFAA President John Dickie, CFAA President

1-800-387-9503

www.harcoco.com

Multi-Housing

Specialist

5 YEAR LIMITED WARRANTY ALL PARTS COVERED Visit our website for complete warranty details

rentalhousingbusiness.ca | 9

In this issue of... NATIONAL OUTLOOK 35. Rental housing providers are facing a new risk from the federal government’s interest deductibility limitation proposal. Find out more about this issue, and what CFAA is doing to prevent it.

38. A hmed Hussen, the new Minister responsible for housing, has been mandated to get more rental housing built through the National Housing Strategy, to help low-income tenants with their rents with the new Canada Housing Benefit, and to support measures to facilitate homeownership.

Eastern Ontario Landlord Organization (EOLO) www.eolo.ca P: 613-235-9792 Federation of Rental-housing Providers of Ontario (FRPO) www.frpo.org P: 416-385-1100, 1-877-688-1960 Greater Toronto Apartment Association (GTAA) www.gtaaonline.com P: 416-385-3435 Hamilton & District Apartment Association (HDAA) www.hamiltonapartmentassociation.ca P: 905-632-4435

40. I n the afternoon of Monday, June 8, 2020, delegates at CFAA-RHC 2020 will be touring three new rental buildings in downtown Halifax. Learn more about the buildings and how to register.

Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572

41. T he 5th Annual CFAA Rental Housing Awards Program is open for applications, and winners will be announced at the CFAA Awards Dinner on June 9, 2020. What award will you be applying for?

London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999

To subscribe to CFAA’s e-Newsletter, please send your email address to communication@cfaa-fcapi.org.

The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada.

CFAA is the sole national organization representing the interests of Canada’s $480 billion rental housing industry.

For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.

10 | January 2020

CFAA Member Associations

LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604-733-9440 Victoria Office P: 250-382-6324

Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560 Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703

Are you an affordable housing provider in our Ontario service area?

Keep your Affordable Housing Affordable.

Looking to cut your operating costs? Lower energy use and improve resident comfort by upgrading your building's equipment.

With up to

$200,000 in available incentives

Here are some of the measures we support: • High Efficiency Boilers • Make-Up Air Units • Water Heaters • Heat Reflector Panels • Low-Flow Showerheads • Control Upgrades • Heat Recovery Ventilators

Let’s get started.

There are solutions and retrofit rewards for all budgets.

For more information, contact: Cam Black, Enbridge Energy Solutions Consultant energyservices@enbridge.com (416) 758-4748

EnergyRetrofits.ca

rentalhousingbusiness.ca | 11

y c n a c a V e g a r e v A t s Highe : e c n i v o r Rate By P : n a w e h c t Saska d n a d n a l d New foun ador: Labr Alberta:

1 2 3 4 5 6 12 | January 2020

: k c i w s n u New Br : Manitoba Quebec:

8.4% 6.0% 5.6% 3.2% 2.9% 2.3%

rentalhousingbusiness.ca | 13

UNDERSTANDING

Most owners of multi-unit residential buildings know what’s going on with respect to rent levels and vacancy rates. However, do they truly know their tenants’ wants and needs? Knowing more about tenants is essential to keeping current tenants in their buildings, and attracting new tenants when there is turnover.

14 | January 2020

TENANTS

By David Gargaro

RHB Magazine analyzed data acquired from multiple sources to help building owners and property managers understand renters’ preferences and identify rental housing trends.

Data sources include the following: • Kijiji.ca accumulates comprehensive data on renters, including the most popular days and times that they search for a place to live

• Rentals.ca produces a monthly national rent report that lists and analyzes average rents levels, vacancy rates, and other key market data • I nforma Canada conducts the annual Canadian Multi-Res Tenant Rental Survey, interviewing approximately 20,000 Canadian rental tenants to understand their preferences and identify trends • Canada Mortgage and Housing Corporation (CMHC) conducts indepth analysis and market trends of primary and secondary rental markets across Canada • Bullpen Research & Consulting conducts research to better understand the residential housing market, focusing on new developments in Ontario • Local Logic provides hyperlocal content on neighbourhood resources and amenities • Landlord Web Solutions offers online marketing and data syndication for the rental housing market • PadMapper accumulates information on rental properties, enabling tenants to filter apartments by multiple data points and factors

What will the rental housing market look like in 2020?

If 2019 is any indication, average rental rates are expected to rise in most markets across Canada, as vacancy rates continue to stay low or even decrease. Toronto is expected to see an average rent increase of around 7 per cent, given greater migration to the city, higher housing prices, and the continuation of new rental supply falling behind demand.

According to our research, national average rents will increase by 3 per cent year over year. Demand for rental units is on the rise, due to various factors, including the cost of buying a home, shifts in lifestyle demands, changing demographics, growth in the shortterm rental market, and increasing migration.

Lack of rental supply in many markets will likely continue to be a story in 2020, even though purpose-built rental housing construction is expected to increase. There will be opportunities to add to the rental housing supply, such as renovating older multi-unit apartment buildings, given the return on investment from higher rents, and cities looking at alternative rental options, including co-living developments, laneway suites, and smaller homes. Some companies will also purchase entire condominium developments and lease out the entire building as a pooled rental arrangement.

Developers will continue to construct new rental properties, but might focus on smaller and more affordable units, and providing more shared amenities.

rentalhousingbusiness.ca | 15

Who are your tenants?

Tenants come from all walks of life, and span all age groups, family situations, and backgrounds. The demographics of one building in one area might vary widely from the demographics of a building located in another neighbourhood, city or province. If we were to profile the “typical” tenant based on demographics and research, they would be female, under the age of 40, living with one roommate and no dependants, and working full-time with a household annual income greater than $50,000. They probably speak English as their first language and have no pets. They also prefer to rent because all aspects of their housing are taken care of for them.

Our research identified some interesting results when comparing families with and without children. The majority of renters with children are over the age of 30, while renters without children are mostly under the age of 40. When asked about whether their unit fully meets their needs, families with children were equally split, while more families without children were more satisfied than not. The key complaint for families with children was the lack of space, while those without children were more concerned about the lack of an in-suite washer/dryer. Families with children were more bothered by tenants smoking cannabis in outside common areas.

Both types of families had some common interests. For example, both preferred a bathtub/shower combination over just a shower, and one full bathroom and one powder room rather than two full bathrooms.

Having a basic gym was preferable over having a higher end facility or working out elsewhere. The most popular way to pay for rent was via pre-authorized debit, and both family types preferred paying for the utilities they used. There was also no great interest in using technology like Google Home or Alexa to control their units.

What features and amenities are important to tenants?

It’s important to know what matters to prospective tenants when promoting your building’s features and amenities, so that you know what to mention in advertising available units. It’s also relevant for retaining tenants, as they are more likely to stay in the building longer if it already has what they want.

According to our research, the three most desired building amenities are having a washer/dryer in the building (or in the suite), free guest parking, and high-speed Internet access. The most desired building features include elevator access, air barriers (or air handling equipment) to prevent smells from entering common areas, and large windows.

The most essential suite amenities include soundproof walls, having a balcony or private outdoor space, and an abundance of natural light in suite. Valet parking was the least desired building amenity, while the least popular suite amenity was having a built-in speaker/sound system. It’s interesting to note that, regardless of the age or demographic, everyone would like a luxury shared space, but would still prefer the private balcony. The percentage of people who preferred a luxury shared space to a private balcony was low, and relatively equal across all demographics.

Most tenants stated that they are attracted to a particular building due to its amenities, and the majority use those amenities regularly after they move in. The most preferred building services include regular housekeeping, a digital portal for communications and social functions, and winter/summer tire change/storage. The most popular program offerings are tenant social events, followed by yoga and Pilates classes and cooking classes; the least popular are child and family planning services.

What about transportation and parking?

Demographic shifts have led to an increase in the sharing economy, so many younger people don’t own vehicles. However, many

16 | January 2020

PROVIDING OUR CLIENTS THE

HIGHEST POSSIBLE ROI FOR

10 YEARS THE APT PROMISE:

Transparency

Integrity

Dedication

Communicating actioons and nneeds while keeping the client updated.

Keeping our word and following through with our promises.

Always ensuring projects are completed to the highest standards.

CAPITAL EXPENDITURES

Call us: 1-877-345-5351

.

SUITE TURN-OVERS

.

Partnership Finding win-win outcomes by working for the benefit of both parties.

ENERGY CONSERVATION

www.allprofessionaltrades.com

rentalhousingbusiness.ca | 17

families tend to rely on their vehicles for getting the kids to and from school, shopping, and activities. Location plays a factor, as people who live downtown seem to make do with public transit, while people who live in the suburbs or areas not easily accessible by public transit tend to drive where they need to go. As a result, building owners have to think about issues such as parking and transit access.

According to our research, tenants who commute to school tend to take public transit, and tend to live within 15 minutes of their school. The majority of tenants who commute to work drive rather than taking public transit, and most live within 20 minutes of where they work. Most tenants own one vehicle, have a designated spot, and have sufficient parking to meet their needs. The majority also live in buildings with guest parking, but do not want visitor parking to be metered or time limited.

How important is location?

Although building owners have no control over the amenities located near their properties, knowing what matters to prospective and existing tenants will help you to determine what to focus on when promoting your building as the ideal place to live. People prefer to live in safe, clean neighbourhoods, as well as being close to the amenities that would make their lives more convenient or enjoyable. Real estate is all about location, and the same goes for rental properties.

According to the Canadian Multi-Res Tenant Rental Survey, the three most desirable amenities to have in close proximity to a building are grocery stores, parks and outdoor space, and restaurants and retail. Regardless of whether you live in Toronto, Montreal, or Vancouver, people most want to live near a grocery store. While living near public transit (either subways, buses or streetcars) is the next most popular amenity to live near in Vancouver and Toronto, the secondmost popular choice for tenants in Montreal involves living near parks and outdoor space.

18 | January 2020

Every age group most wanted to live close to a grocery store. However, people under the age of 20 were also most interested in living near where they work, followed slightly by living near parks and outdoor spaces. People aged 30-55 and over 55 were both interested in living near parks and outdoor spaces as their second-most popular choice. However, for their third choice, people aged 30-55 preferred to live closer to work, while people over 55 wanted to live near restaurants and retail.

The Rentals.ca National Rent Report shows different results for neighbourhood amenities.

The data showed that proximity to schools is the most important community amenity, followed by transit friendliness and living near grocery stores (see sidebar). As the number of bedrooms in the rental unit increased, so did the percentage of respondents who ranked proximity to schools as a high priority.

The analysis suggests that as more families continue to rent, there will be an increasing willingness to sacrifice the ability to take transit or walk to the grocery store in favour of living near a quality school.

How do tenants communicate and use technology?

Renters typically use technology to find a place to live. According to our research, most tenants visited the building’s website before renting, and the website made a positive impression on most searchers. The most popular method of looking for rentals was an online listing service, with Kijiji leading the way, closely followed by word of mouth through a friend or referral. Therefore, building owners and property managers should not ignore the fact that current tenants can help to promote their buildings to prospects.

There are a lot of assumptions about how tenants from different generations want to make use of technology in their lives. Some believe that there is a hard technological divide between age groups; tenants of a certain age rely entirely on their smartphones,

ASPHALT PAVING CONCRETE PAVING LANDSCAPE CONSTRUCTION BUILDING RESTORATION WINTER SNOW SERVICES INTERLOCKING STONE SITE SERVICING

diversified construction 24 hour emergency service 416.524.3000 Email: estimating@forestgroup.ca

forestgroup.ca

Canadian Renters Interests, 2019 Rentals.ca, Bullpen Research & Consulting, and Local Logic compiled the results of a survey of Canadian renters’ interests with respect to their most desirable neighbourhood amenities.

1 Bedrooms

2 Bedrooms

Schools Transit Friendliness Grocery Stores Quiet

13.5%

20.9%

Pedestrian Friendliness

24.7%

Shopping

9.65%

11.2%

2.62% 3.31 % 3.3 9%

3.6 2% 3.50 % 3.13% 3%

6%

Parks Car Friendliness Daycares Nightlife

2.5%

5.7

% 4.11 6% 7 3. % 65 3.

5% 3.4 8% 3.6 % 3.84 4.44%

4.74%

%

7 5.8

41.7%

4.26%

2.06%

Restaurants Cafes

Vibrancy Cycling Friendliness

1.40% 2.16%

4 Bedrooms

3 Bedrooms

9.44%

7.66%

2.32% 1.81% 1.69% 1.33%

20 | January 2020

5%

3.9 % 3.25%

3.72

% 3.7% 3.23% 3.07% 2% 3.0 6% 2.6 4% 6 2.

9.1%

6.1

3.02% 2.95% % 2.87

53.70%

56.7%

%

2.4

2.59%

2.27% 1.70% 1.64% 1.43%

credit

ER T I N S R EZ É I NS

WE’VE GOT YOU COVERED! ! ne! ine onl en lig t us us Visi ez-no om c . t tic Visi ma

na

coi

ed mag r da ment . no ole eplace ndable t s r u st, -ref t to s lo ard subjec is non om c . C d La ash ct are rt car undry. c e nt. la k yla sma pta egle d li om rsée si r car e or n to this or fixm c s t i leu on gen bou t th al us 972 l’ar s rem . La va trea norm loaded -561-1 . de a b ase 0 ble gée ap me Ple ough a value 1-80 om ne ser omma boursa m c ? r e s e h h t rt arte nd -rem ie.co . T estion a e s c e u rg tte ette c ite o t non ander Qu cha r ce c ru u es aite re sur le, dét puce u sosb i z tr ille onéta ue, vo arte à 1972 o u e c V m perd 1e 6 r t t 5 u vale te est sur ce 1-800 car hargé ions? c st Que

They’ll love their payment options.

Ask us today about our coin, laundry card, and mobile payments options for your laundry facility.

1-877-755-5302 | www.coinamatic.com

rentalhousingbusiness.ca | 21

and if a showing or application can’t be done via texting or an app, then they are simply not interested. The data shows that most common methods of communicating with building owners and property managers are in person or over the phone. However, most tenants would prefer to communicate via email.

With online ordering so prevalent, building owners and managers must adapt to how their tenants shop as well as how they live.

Most tenants purchase goods and groceries online, and have them delivered to their homes. The majority have to go to their mailbox to pick up their packages, but only some receive an email notice. However, most tenants would prefer to receive a text, email or app notice when their package arrives.

Even though Amazon and other e-commerce providers will deliver directly into the unit, most tenants would not feel comfortable with allowing entry into their homes. Most rental properties do not have a storage locker, while a high percentage of tenants would want an automated package locker system.

Why do tenants want to move out?

Eventually, most tenants will move on to find another place to live. There are many reasons for them to do so, such as change of job or life circumstances. Although they might have been renting for some time, given the choice, most tenants would prefer to purchase their own home, although the majority have no plans to purchase a home or condo in the foreseeable future. For those who choose to live in a purpose-built rental building, most prefer to do so because they like the services that they get from renting. For people who choose to move into a condo, they tend to do so because of the building’s amenities.

Most renters take less than one month to find where they currently live. Before deciding to move out, renters typically spend up to three months in looking for a new place to live. For those looking to move into a new rental unit, the majority would prefer to move into a new purpose-built rental building. Unfortunately

22 | January 2020

for building owners, most tenants who plan to move are unlikely to be convinced to remain in their current units.

What do student renters want?

If you own or manage properties on or near a university or college campus, then your business depends on meeting students’ needs. The majority of students live in furnished units, and prefer it that way when looking for a place to live. They also prefer to live on campus (rather than off-campus), although that’s not as important as having furnishings. There is also great interest in having good amenities and programs in their student housing. Most students rate their building and unit as either average or above average. However, many would look for a better quality rental after graduating.

What about insurance?

Rental insurance is much more popular in the west than it is in the east. Edmonton, Calgary, and Vancouver have the highest percentage of tenants with insurance, while tenants in Montreal are at the bottom of the list. Overall, more than 80 per cent of tenants currently have rental insurance, and a significant percentage would purchase insurance through the building owner or property manager if they provided a group discount.

The percentage of tenants who have rental insurance has increased significantly in recent years, which is a positive sign for the rental housing industry.

Conclusion Rents are on the rise and vacancy rates are either declining or stable in most markets.

These trends may continue for some time, but they can also end and change direction for various reasons. There’s a lot of research, data, and analysis on renters’ demographics, preferences, and habits. How you decide to use this information is up to you.

We build overhead doors that last

For 60 years we’ve been on the cutting edge of Overhead Doors innovation. Our products are quieter, last longer, and work better than anything else on the market.

If you never want to worry about your Overhead Doors again, give us a call: 905 846 6000

Appealing your property tax assessment

By David Gargaro

Impactful changes Most owners of rental property in Canada will be receiving property assessments this year, except for some in Quebec who will be getting their assessments in 2021 and owners in Ontario whose assessments have not changed. Given how property values have increased over recent years, it’s relatively safe to say that the assessed values of most rental properties have increased since the previous assessment, perhaps substantially. This might mean that your property taxes will increase as well.

Upon receiving the assessment notice, make sure to carefully review your property assessment. You don’t want to pay more than what is fair and equitable, especially since property taxes are a significant business cost. You have a limited time to appeal the assessed value of your property – see the table on page 28 for the appeal deadline in your city. Appealing the assessment is the key way to adjust your property’s assessment value and reduce your property taxes.

Reviewing your assessment Many factors go into determining the assessment of your rental property. When doing your own review, make sure to consider the following to prepare for an appeal: • The age, location, size, quality, and condition of your property • The property class for your building • Local real estate market conditions in the year in which your property was assessed • How your rental property compares to similar properties

“Apart from mortgage payments, property taxes are usually the largest cost a rental housing provider faces,” said John Dickie, President, Canadian Federation of Apartment Associations (CFAA). “At every new assessment, it is almost always worthwhile to consult a property tax professional to evaluate your assessment, and thus minimize the property tax you pay.”

Appealing your assessment Many owners of rental property don’t appeal because they don’t think it’s worth the time and effort. In some cases, there is no fee to appeal. According to a survey conducted by the Canadian Federation of Independent Businesses, 46 per cent of property owners who chose to appeal their assessment saw their property’s assessed value decrease, which resulted in paying less property tax.

So, when should you decide to file an appeal?

The key reasons to appeal an assessment are when you believe that the assessed market value of your rental property is too high based on sales of comparable properties, you think that you were not assessed fairly compared to your neighbours or similar properties, or your property was improperly classified during the assessment process.

Before you make the appeal, do your homework or consult a property tax professional. Research the value of comparable properties and your neighbours to determine their assessed values. Establish a point of comparison based on the previously stated factors, such as price per square

• Applicable tax exemptions (e.g., municipal, school) In addition to reviewing your current property assessment, you should conduct an annual review. This will enable you to determine whether there are any unusual changes in your property assessment, and to ensure that the assessment reflects the current economic conditions of your rental property.

24 | January 2020

continued on page 28

The Home Depot is redefining your property maintenance experience with the power of One Total Solution: 

Manage inventory better and improve productivity with solutions customized by our experts.



Help maximize your net operating income while reducing suite turn expenses.



Control costs through product standardization, procurement and commercial credit solutions.

TAKE ADVANTAGE OF: Common repair solutions.

Preventative maintenance solution.

Single-focus and quick upgrades to get rent-ready faster.

Freshen up dated or damaged spaces.

Upgrade your curb appeal.

PLUS, GET MORE WITH

THE HOME DEPOT’S FREE LOYALTY PROGRAM FOR PROFESSIONALS. MEMBERS GET: 

Up to 4% back in Rewards, any way they pay with a Pro Xtra ID.



Up to 20% back in Rewards on select paints, primers and stains.



Purchase Tracking to save time and stay organized.



Exclusive offers and promotions when they opt into Pro Emails.

Sign up today at homedepot.ca/proxtra.

NEED HELP? Contact Michael Lirangi, National Account Manager with The Home Depot at michael_lirangi@homedepot.com and mention the Canadian Federation of Apartment Associations.

Rental Housing Lifetime Achievement Recipient A. Britton Smith, Homestead Land Holdings Limited

Outstanding Community Service Award Greenrock Real Estate Advisors

Best Property Management Website Rhapsody Property Management Services in Partnership with Riocan Living www.ecentralliving.com

Marvin Sadowski Memorial Award for Certified Rental Building Member of the Year Melchior Management 777 Corporation

Advertising Excellence Single Campaign Hollyburn Properties Limited #MyHollyburn

Best Lobby Renovation of the Year Starlight Investments 1475 Bloor Street, Mississauga

Best Curb Appeal DMS Property Management 145 Wellington St West, Aurora

Advertising Excellence Social Media Hollyburn Properties Limited

FRPO CONGRATULATES THE WINNERS OF THE 2019 MAC AWARDS On December 5, 2019 FRPO held its 19th annual awards gala in Toronto, at the Metro Toronto Convention Centre in conjunction with the PM Expo. FRPO’s MAC (Marketing, Achievement and Construction) Awards recognize success and quality in Ontario’s rental housing sector. The MAC Awards gala continues to grow each year, with record attendance of over 1200 guests. Thank you to all those who attended as well as our generous sponsors.

Congratulations to the 2019 MAC Awards winners and nominees.

EVENT SPONSORS

26 | January 2020

CONGRATULATIONS 2019 WINNERS Resident Manager of the Year Laura McNabb - Skyline Living

Leasing Professional of the Year Laura Bkhet - MetCap Living

Best Suite Renovation Under $20,000 QuadReal Property Group 6550 Glen Erin Drive, Mississauga

Best Suite Renovation Over $20,000 Minto Apartments 61 Yorkville Avenue, Toronto

Rental Development of the Year Tricon Capital Group and OP Trust The Selby: 25 Selby Street, Toronto

Environmental Excellence Award Sifton Properties Limited

Property Manager of the Year Gemma Melchior Melchior Management 777 Corporation

Amenities Award of Excellence Rhapsody Property Management Services 25 Montgomery Avenue, Toronto

Customer Service Award of Excellence Oxford Properties Group

Company Culture Award of Excellence Greenrock Real Estate Advisors

www.frpo.org

rentalhousingbusiness.ca | 27

continued from page 24

foot of land and property class. Rather than just complaining about your property’s assessment value, be prepared with relevant evidence as to why you were assessed over the proper value.

When participating in the appeal, ensure that you provide relevant evidence, along with witnesses or experts where applicable.

In some cases, you can discuss your concerns with the appraiser. If this does not address your concerns, then you can appeal. Make sure to submit your written request for an appeal before the deadline for your city, as stated in the table below. You will have to attend a hearing to explain your reason for requesting the appeal of your assessment.

Every property owner must pay property taxes. However, just because your property is assessed at a certain level does not mean that you have to accept the assessed amount.

You can appeal that assessment, and possibly have the assessed value reduced to decrease what you pay in property taxes. The benefit to your bottom line is usually worth the effort.

Conclusion

2020 Canadian Assessment Appeal Deadlines City/Province

Notice Mailed

Appeal Deadline

Valuation Date

Taxation Year

Assessment Cycle (appeal opportunity)

Yukon

December 2019

January 13, 2020

January 1, 2016

2020

Two-year cycle (annual)

Northwest Territories— Inuvik—Norman Wells

January 2020

February 2020

January 1, 2018

2020

Ten-year cycle (annual)

Nunavut

December 2019

January 16, 2020

January 1, 2012

2020

Ten-year cycle (annual)

British Columbia

January 2020

January 31, 2020

July 1, 2019

2020

Annual (annual)

· Edmonton

January 2020

March 10, 2020

July 1, 2019

2020

Annual (annual)

· Calgary

January 2020

March 10, 2020

July 1, 2019

2020

Annual (annual)

- Red Deer / Lethbridge

January 2020

March 2020

July 1, 2019

2020

Annual (annual)

- RM Wood Buffalo (Fort MacMurray)

January 2020

March 2020

July 1, 2019

2020

Annual (annual)

- Rural Alberta

Variable March – July 2020

Variable Mar – Dec 2020

July 1, 2019

2020

Annual (annual)

· Regina

October 2020

December 2020

January 1, 2019

2021

Four-year cycle (annual)

· Saskatoon

January 2020

February 3, 2020

January 1, 2015

2020

Four-year cycle (annual)

· Winnipeg

April-May 2020

June 2020

April 1, 2018

2021

Two-year cycle (annual)

· Remaining Municipalities

Variable August – December 2020

Variable Aug – Dec 2020

April 1, 2018

2021

Two-year cycle (annual)

Ontario

Annual Notices only issued when a change has occurred; Supplementary or Omitted Assessment Notices issued where/when appropriate

March 31, 2020

January 1, 2016

2020

Four-year cycle (annual)

· Montréal

Fall 2019

April 30, 2020

July 1, 2018

2020-2021-2022

Triennial (right of appeal in the first year only for revaluations)

· Q uébec City – Laval – Longueuil – TroisRivières – Sherbrooke – Baie- Comeau – Sept-Îles

Fall 2021

April 30, 2022

July 1, 2020

2022-2023-2024

Triennial (right of appeal in the first year only for revaluations)

· Drummondville – Gatineau and many others

Fall 2020

April 30, 2021

July 1 , 2019

2021-2022-2023

Triennial (right of appeal in the first year only for revaluations)

Nova Scotia

January 14, 2020

February 14, 2020

January 1, 2019

2020

Annual (annual)

New Brunswick

March 1, 2020

March 31, 2020

January 1, 2020

2020

Annual (annual)

· St. John’s

August 31, 2020* May be earlier

Late October, 2020 (60 day appeal window)* May change

January 1, 2017

2021

Three-year cycle (annual)

· Remaining Municipalities

June 2020* May change

Late August, 2020 (60 day appeal window)* May change

January 1, 2020

2021

Annual (annual)

Prince Edward Island

Early May 2020 (must be mailed by May 5)

Early August 2020

January 1, 2020

2020

Annual (annual)

Alberta

Saskatchewan

Manitoba

Québec

Newfoundland – 20192021 reassessment

28 | January 2020

Yes, we can!

Since MetCap Living established itself as a leader in property management, we have routinely been asked one, simple question; “Can you help us run our property more effectively?” And, for well over thirty years, the answer has remained — Yes, we can! Our managers are seasoned professionals, experienced in every detail of the day to day operations and maintenance of multi-unit rental properties. From marketing, leasing, fnance and accounting, to actual physical, on-site management, we oversee everything.

We concentrate on revenue growth, controlling expenses, and strategic capital investment in your property to maximize your profitability over the long term — when you’re ready to discuss a better option; we’ll be there. You can count on it.

Kazi Shahnewaz Director, Business Development Office. 416.340.1600 x504 Cell. 647.887.5676 k.m.shahnewaz@metcap.com

www.metcap.com

A DIGITAL BROADCAST NETWORK FOR ALL OF YOUR RENTAL HOUSING BUSINESS NEWS.

Meet The New Boss

February 2020, Season 2 RHBTV NEWS AND DATA LIKE YOU’VE NEVER SEEN BEFORE

WWW.RHBTV.CA

DONE ONCE. DONE RIGHT!

Structur

al

Mechan

ical

ation

Restor

lting

Consu

FROM TOP TO BOTTOM – FROM START TO FINISH… WE’RE THERE. WYNSPEC is a multi-faceted consulting, engineering, design and project management firm.

We provide a unique blend of services and expertise, working with our clients to restore, transform and modernize their buildings.

www.wynspec.com

Halifax What’s going on in Halifax’s

rental housing market?

By David Gargaro

Halifax is currently home to one of the hottest rental housing markets in Canada.

According to the Canada Mortgage and Housing Corporation (CMHC), the overall vacancy rate is at 1.0 per cent, which is down from its previous historic low of 1.6 per cent in October 2018. Approximately 40 per cent of the people who live in Halifax are renters, which is an increase from 24 per cent over the last 10 years. As of 2016, 63 per cent of renters in Halifax were employed, which is only slightly lower than the employment rate for homeowners.

Key factors Population growth is one of the key drivers for rental housing demand in Halifax. That growth is well above the long-term average growth rate.

Since 2016, 18,000 new permanent residents have settled in the city, while Nova Scotia as a whole has experienced four consecutive years of positive migration. Job growth and declining unemployment rates have reduced interprovincial outflows, especially among the 15-24 and 25-44 age cohorts.

“The population growth is sustained through employment growth across many sectors, including shipbuilding, ocean research, technology, finance, and administrative jobs,” said Philip Fraser, President and CEO, Killam Apartment REIT. “Many of these new jobs in Halifax are the result of the affordable cost of living in Halifax, relative to other major cities across Canada.”

Seniors have also been downsizing and moving from other parts of Nova Scotia into rental properties in Halifax, where there is easier access to healthcare, amenities, and family, which has taken up much of the rental supply. There is also significant growth from international immigration.

The Atlantic Immigration Pilot program has been extended to 2021, which will help to maintain immigrant population growth. There has also been an increase in the number of international students attending university in Halifax. They are prime rental candidates.

32 | January 2020

“The number of international students at Dalhousie [University] increased 4.6 per cent in 2019,” said Kevin Russell, Executive Director, The Investment Property Owners Association of Nova Scotia (IPOANS). “From 2018 to 2019, overall International student numbers were up 9 per cent.”

Rents are on the rise At October 2019, the average rent was $1,113, which is up by 3.8 per cent from October 2018.

Average rents are up across the board, ranging from an average of $812 for bachelor apartments to $1390 for three or more bedrooms. In addition to the low vacancy rate, the overall increase in rents is due to the increase in high quality stock, including condo rentals entering the market, as well as older buildings investing in upgrades to compete.

The increase in new rental construction tends to lead to an increase in average rents, as new supply usually comes on stream at higher rents.

However, the increases have only become evident in the last few years. For the previous ten years, the average rent of new construction was around $1,400. In October 2017, the average rent was $1,686, whereas for October 2018 it had pulled back slightly to $1,634, which was still well above the previous norm for new rental product.

x

Rental development is also increasing According to CMHC, there are currently more than 4,000 rental housing units under construction in Halifax, which is the highest level ever seen. There were also more than 1,000 rental units completed last year. At present, 68 per cent of new builds in Halifax are intended to be apartment rentals.

A number of condominiums were converted to rental properties, and recently renovated structures also increased the rental supply.

“Positive market fundamentals continue to increase investment in multi-family development, with an increase in the number of projects underway in the city,” said Fraser. “At Killam, we continue to invest in our properties to remain competitive with new developments in the market, and we will also continue to develop new properties.”

However, rental housing supply has not kept up with demand growth, particularly within Halifax City proper. Although there is strong multi-unit residential development growth, much of it is occurring outside the City of Halifax, in suburban areas where land costs are lower. Construction times on rental developments have been extended due to the skilled labour shortage.

“Short-term relief in vacancy is expected once units under construction enter the market, as renters in older buildings migrate to new buildings, which will open vacancies in older buildings,” said Russell. “Larger projects will have a significant impact on supply over a short period when they eventually hit the market.”

Conclusion Halifax is continuing to grow, and the demand for rental properties is also on the rise, with no apparent end in sight. Given the strong market fundamentals, developers of rental housing have a strong pipeline of multi-unit residential properties in the works, and there is room for more development to take advantage of low vacancy rates and increasing rents.

“CFAA is delighted to hold this year’s Rental Housing Conference in Halifax, the hub of Atlantic Canada, from June 8 to 10,” said John Dickie, President, Canadian Federation of Apartment Associations (CFAA). “Among many other topics, we will talk about why Halifax and other cities are booming, and what that means for rental housing in Halifax and elsewhere across Canada.”

LANDLORD PROGRAMS

Custom Solutions for the Rental Housing Industry Your tenants need insurance! ZipSure.ca’s Landlord Programs are innovative, value-add insurance options that can be purchased by tenants directly, or by the landlord which automatically provides insurance coverage to the tenants as a built-in, tenant benefit included in the cost of rent.

1 ZipTenant 2 Landlord Certificate Program 3 Embedded Coverage 4 Contingent Coverage For more information on how to setup a program, contact our Business Development Team 1-866-856-9876

rentalhousingbusiness.ca | 33

Call your iron railing specialists today!

We specialize in: Roof Top Guard Rails | Wall Mounted Access Ladders Stairwell Railings & Handrails | Iron Gates & Fencing Balcony Guard Rails Exterior Railings | On-site Welding

Serving the GTA since 1972!

416.535.1686 sales@dufferiniron.com

Dufferin Iron & Railings is committed to serving our customers’ needs. Our trade skills and years of experience enable us to produce high quality products delivered in a timely fashion. Our clients choose us because of our reputation for quality, excellent service, and competitive pricing. www.dufferiniron.com

JANUARY - FEBRUARY 2020

Proposed interest limitation rules could devastate rental housing

By John Dickie, CFAA President

In the two most recent issues of National Outlook, CFAA warned readers of the risk of an increase in the capital gains inclusion rate, based in part on the potential influence of the NDP. Now rental housing providers face a new, even more serious risk, from a different source.

The Liberal Party election platform proposed to expand the application of the limit on the interest that corporations can claim on borrowings to finance their operations. According to well-known economist Jack Mintz, Finance Department officials have been eyeing this possible change for 20 years.

Minister of Finance – Bill Morneau

A similar restriction has been applied to limit the amount of the interest which branches of foreign companies pay to non-residents of Canada. In that context, the rule makes some sense, because profit on Canadian operations could be “converted” into interest in the hands of non-residents who do not pay Canadian income tax. However, expanding the rule to apply to interest payments to Canadians would serve no purpose since those interest payments are taxable in the hands of the recipients.

Some descriptions of the rule under consideration suggest it could have a disastrous effect on rental housing and other real estate operations.

The Liberals proposed to prevent corporations from deducting more interest than 30 per cent of the corporation’s “earnings before the deduction of interest, taxes, depreciation and amortization” (EBITDA), which is similar to a rental owner’s net operating income (NOI) less applicable administrative expenses.

Not to be outdone, the NDP has proposed that the interest deductibility limit be set at 20 per cent!

Because rental operations use a great deal of capital, most rental operations pay out more interest than 30 per cent of the building’s NOI; and in their initial stages, many new operations pay out much more then 30 per cent. See Table 1 on page 37.

Timing and lobbying avenues A change to the interest deductibility rules could be announced in Budget 2020, which is likely to be brought in February, March or April 2020. Even if a change is announced then, the details of the change could still be subject to revision during the process by which the Budget measures are implemented. Revisions could include exempting real estate or rental housing, or applying a much higher limit to real estate or rental housing than to other businesses.

rentalhousingbusiness.ca | 35

How do you increase marketing ROI? Attract more prospects, convert more leads and retain more residents with the RENTCafĂŠ Suite, a powerful marketing, leasing and resident services platform with innovative property marketing features, automated lead tracking and management tools, contact center resources and advanced search marketing services.

A single connected solution for multifamily marketing management

888.569.2734 Yardi.com/Marketing Š2019 Yardi Systems, Inc. All Rights Reserved. Yardi, the Yardi logo, and all Yardi product names are trademarks of Yardi Systems, Inc.

NATIONAL OUTLOOK Table 1 shows two typical situations for a building which has been held for five or ten years: first, a typical income, expense and tax situation for a principal business corporation (a PBC), and second, a typical income, expense and tax situation for a real estate investment corporation, with five or fewer full-time employees. All the figures are based on one unit in a multi-unit building. Both situations assume a 50% borrowing ratio (loan-to-value), and a 4% interest rate.

Table 1: Typical income, expense and tax situations Section

Building item (per rental unit)

Basic building facts

Property value Gross rental income NOI (approx = EBITDA) Interest payments per year Capital cost allowance claimed Net income before tax Total corporate tax (fed & prov - approx) Net income after tax Interest payment allowed (30% of NOI) Notional net income for tax calculation Total corporate taxes (fed & prov - approx) Actual net income (from above) Actual net income after tax Increase in tax (in dollars) Increase in tax (as percentage)

Current tax situation

Apparent proposal

Comparison

Principal Business Corp (PBC) $180,000 $12,000 $7,200 $3,600 $2,000 $1,600 $585 $1,015 $2,160 $3,040 $1,110 $1,600 $490 $525 90%

Real Estate Investment Corp $180,000 $12,000 $7,200 $3,600 $2,000 $1,600 $803 $797 $2,160 $3,040 $1,526 $1,600 $74 $723 90%

Such a new interest limitation regime would dramatically increase the income taxes on real estate, and dramatically reduce actual after-tax income. While most PBCs would stay in profit (at a much reduced level), many real estate investment corporations would generate an after-tax loss every year under perfectly normal borrowing arrangements.

Governments generally say they want the rental housing sector to expand in order to obtain a larger supply of rental housing, and thus make rental housing more affordable. Much taxpayer money and government effort (by all three orders of government) is being invested in promoting new rental construction. It would run directly contrary to that important housing policy objective to apply an interest deductibility limitation to rental housing.

Conclusion Expanding the interest deductibility limitation to corporations with loans from Canadian sources (or foreign loans at market rates) would not achieve a good policy result. It is unnecessary, and would have serious negative unintended consequences, particularly on real estate, including rental housing.

CFAA urges the government not to go forward with any expansion of the interest deductibility limitation.

At the least, we urge the government not to apply an expanded test to the real estate sector, and in particular, not to apply an expanded test to the rental housing sector.

To see CFAA’s pre-budget submission on this issue, go to www.cfaa-fcapi.org. Updates will also be posted there, and distributed in CFAA’s e-Newsletter. E-mail admin@cfaa-fcapi.org to add your name to the e-Newsletter distribution list.

rentalhousingbusiness.ca | 37

JANUARY -FEBRUARY 2020

Housing spending under the National Housing Strategy

The new Minister of Families, Children and Social Development is Ahmed Hussen, who was formerly the Minister of Citizenship and Immigration. Broadly speaking, he is mandated to deal with three main housing policy areas.

Building and renovating housing under the NHS Minister Hussen is to continue to build and renovate housing through the National Housing Strategy (NHS). That includes the repair and expansion of community housing, supportive housing and shelters, and low-cost financing for new rental construction, with some affordability component.

For rental developers, the value of housing subsidies and low-cost financing delivered under the NHS is clear. To serve rental providers in all areas, those financial supports for new construction should be focused on areas with housing shortages, and on creating supportive housing to house people hard to house in the private sector. CFAA advocates those two focuses, and they are largely being addressed.

Table 2 shows the projects approved up to August 2, 2019 in several of the key geographic areas which CFAA is monitoring.

Table 2: Approved NHS Projects (# of projects; dollars in thousands) Sample Province and area

Private market affordability projects #

Amount of low-interest loan

Community housing

Supportive housing or shelter

#

Amount of grant

#

Amount of grant

Nova Scotia

2

$22,954

1

$1,010

2

$3,193

Greater Toronto

3

$506,000

6

$1,384,533

3

$11,430

Other Ontario high growth areas

6

$236,712

15

$66,251

7

$31,036

Ontario low growth areas

2

$27,923

4

$5,972

3

$10,272

Manitoba

2

$44,000

1

$25,555

3

$4,728

Saskatchewan

0

$0

1

$225

0

$0

BC high growth areas (incl. Vancouver & Victoria)

9

$240,180

5

$35,667

4

$128,865

BC low growth areas

0

$0

1

$2,270

1

$830

Canada Housing Benefit Minister Hussen is also mandated to ensure the effective implementation of the Canada Housing Benefit (CHB).

The CHB is to be jointly funded by the provinces and the federal government. While the designs may differ somewhat from province to province, the CHB is to be a form of direct financial assistance to low-income renters, with an element of portability.

CFAA encourages the use of the new CHB in the private rental market, with a focus on the people who need the housing help the most because they have the largest affordability gap. Besides that, the CHB will be used to support tenants in community housing while their homes are retrofitted or renovated. The exact program design is up to the federal government and each province; and so, CFAA works on the CHB issues with our member-apartment association in each province.

38 | January 2020

NATIONAL OUTLOOK On December 19, 2019, Minister Hussen and Steve Clark, Minister of Municipal Affairs and Housing for Ontario, announced the Canada-Ontario agreement to implement the new Canada Housing Benefit in Ontario. That agreement is the first of what will likely be 13 separate agreements, one for each province and territory.

CFAA is proud of the major role we played in achieving the inclusion of housing benefits in the NHS, and the work we have done with our member associations to encourage the use of the new benefit in the private rental market.

Measures to facilitate homeownership Minister Hussen is also to ensure the effective implementation of the new First-Time Home Buyer Incentive (FTHBI), increasing the qualifying value in high-cost markets (such as Toronto and Vancouver), and making the program adjust to reflect changing market dynamics. Finance Minister Morneau is to consider making the borrower stress test more dynamic.

Both measures will assist higher income renters to buy homes. In weak rental markets, that is against the interests of rental housing providers, but in strong markets that program helps the rental housing industry by enabling turnover and by relieving some of the upward pressure on rents, which is leading to calls for more landlord regulation, such as tighter rent control.

Canada’s new Housing Supply Challenge CMHC is currently developing Canada’s first Housing Supply Challenge, a $300M competition announced in Budget 2019 to seek and to help implement new ideas to reduce the barriers associated with the creation of additional housing, and especially affordable or mixed income housing. The program is likely to be divided into several categories. Possible categories include intensification while enhancing quality of life, Northern housing, housing data and others. The ability to replicate proposals will likely be an important criterion in the competitions. The first round of the competition is expected to be announced in June 2020, with an initial application deadline in October or November. The current plan is to begin with the challenge: “Reduce local planning and approval timelines for housing development”.

To ensure you receive notice of the opening of the competition, sign up for the CFAA e-Newsletter at admin@cfaa-fcapi.org.

Join CFAA in Halifax this June at CFAA - Rental Housing Conference 2020 Registration is now open for CFAARHC 2020, which will take place from June 8 to 10 at the Westin Nova Scotian in downtown Halifax.

CFAA-RHC 2020 will feature two days of timely and relevant education sessions, the Building Innovations Tour, CFAA’s 5th annual Rental Housing Awards Dinner, and more!

Don’t miss out on our early bird pricing! For more information, or to register, visit www.CFAA-RHC.ca or email events@cfaa-fcapi.org.

WANT TO STAY UP TO DATE WITH NATIONAL OUTLOOK? Sign-up for CFAA’s National Outlook e-newsletter to receive up-to-date news on what is happening across Canada, as well as industry insights and insider information on CFAA happenings. Email communication@cfaa-fcapi.org to start receiving National Outlook today!

rentalhousingbusiness.ca | 39

JANUARY -FEBRUARY 2020 CFAA-RHC 2020: Building Innovations Tour CFAA Rental Housing Conference 2020, taking place from June 8 to 10 in Halifax, will begin with the Building Innovations Tour, in the afternoon of Monday, June 8, 2020. The Building Innovations Tour will tour some exceptional new rental buildings in downtown Halifax.

Maple by Southwest Properties

Flynn Flats by Dexel Developments

Maple by Southwest Properties, winner of the 2018 Rental Development of the Year at the CFAA Rental Housing Awards, will be featured on the CFAA Building Tour this year.

The CFAA Building Tour will also feature the newly-built Flynn Flats, by Dexel Developments, in downtown Halifax.

This newly built piece of the Halifax skyline, located in the downtown core, is home to 300 rental units and 9,000 square feel of retail space. Maple’s glass tower and modern architecture makes it a visual standout in its neighbourhood.

Targeting LEED® gold certification, Maple features modern suite designs, original artwork and a sense of community, through resident social events and the proximity to everything the Halifax’s downtown has to offer. Amenities include a swimming pool, hot tub, fitness centre, Great Room, billiard room, and large terrace with Harbour views.

Flynn Flats was named for the Flynn family, who owned a home at the site, before selling to the Lawen family (Dexel Developments is part of the Lawen Group). Flynn Flats consists of 43 one- and two-bedroom flats, some with dens. Included in the flat style mix are 4 townhouse style flats. All flats offer residents high end, open concept living, with maximized unit storage, and relaxing, well appointed commons areas.

Large windows and enclosed balconies provide residents with spectacular views of the famous Halifax Harbour. Amenities include a rooftop terrace, resident lounge (including a dining room, kitchen and library), guest suite, fitness centre and indoor secure bike storage.

The Building Innovations Tour will also visit The Alexander by Killam REIT. More information about the Alexander can be found on page 40 of the November 2019 edition of RHB Magazine.

You can purchase tickets for the Building Innovations Tour, and for the rest of CFAA-RHC 2020, by visiting www.CFAA-RHC.ca. If you have any questions, please contact us at events@cfaa-fcapi.org.

We hope to see you there!

40 | January 2020

NATIONAL OUTLOOK CFAA Awards Program 2020 – Open for Applications CFAA is proud to announce that the 5th annual Rental Housing Awards Program is open for applications.

Awards finalists and winners will be announced at the CFAA Awards Dinner on June 9, 2020, at CFAARHC in Halifax.

CFAA is continuing its simplified and expanded eligibility rules and the application portal that were both introduced in 2020.

Awards CFAA is offering 10 awards categories in 2020. CFAA Suppliers Council members, direct landlord members and landlord affiliate members (landlord members of one of CFAA’s 11 member associations) are invited to apply for these awards: FOR RENTAL HOUSING PROVIDERS • Property Manager of the Year • Off-Site Employee of the Year • On-Site Employee of the Year • Rental Housing Provider of the Year • Marketing Program Excellence of the Year • Renovation of the Year • Rental Development of the Year

FOR RENTAL HOUSING SUPPLIERS • New Product or Service of the Year • CFAA Suppliers Council Member of the Year

For more information about membership, eligibility to apply for an award, becoming a judge, or sponsoring the Awards Dinner (in whole or in part), visit www.cfaa-fcapi.org.

Specialized in Commercial & Industrial Properties, Rental Apartments, Condominiums, Hotels, Housing Cooperatives & Non-Profits.

MOBILE FRIENDLY

• Interior Renovation • General Contracting Call Us: 905-415-1851 Toll Free: 1-877-694-8397 www.domeservicesgroup.com “Proud to be a new member of the Toronto Construction Association”

rentalhousingbusiness.ca | 41

TRUSTED FOR OVER 40 YEARS

Since 1977, Lincoln Construction Group has been leading the way in a variety of services for commercial and industrial projects in the Greater Toronto Area and beyond. Ranging from asphalt paving and concrete work, to site work, landscaping and snow plowing, let Lincoln be the one-stop-shop for all your property maintenance needs.

Built with determination, hard work and a high degree of respect and appreciation for each and every customer, we are committed to being the most thorough and responsive contractor to meet your every need. We assure you unmatched quality at a competitive price.

Call us for a FREE estimate and consultation today!

ASPHALT

|

CONCRETE

|

LANDSCAPE

|

LEASEHOLD IMPROVEMENTS

|

SNOW PLOWING

2001 Albion Road, Unit 22, Etobicoke, ON. M9W 6V6. Office: (416) 675-7283 | Fax: (416) 675-7369 info@lincolngroup.ca | www.lincolngroup.ca

RHB’s forum for rental housing associations to share news, events and industry information

Hot Topics: WRAMA summarizes the information presented recently to the City of Kitchener Council about rental housing issues, and provides information about making your property smoke-free. pg. 45 EOLO presents the City of Ottawa’s decision on rental regulation, explaining the new property standards plan that has been adopted instead of landlord licensing or registration, and also reports on the effect of the new Ottawa water and sewer charges. pg. 49 HDAA provides an update on the rental licensing debate in the City of Hamilton, and its recent dinner meeting, as well as announcing its upcoming events. pg. 53 LPMA discusses the recently proposed City of London plan for increasing affordable housing supply, as well as how to restrict window air conditioners for the safety of tenants and others. pg. 57

The Member Associations

CFAA Rental Housing Conference 2020

June 8-10 The Canadian Federation of Apartment Associations (CFAA) invites you to join us at Canada’s Rental Housing Conference at the Westin Nova Scotian in Halifax, Nova Scotia. www.CFAA-RHC.ca Thanks to Principal Sponsor:

With special thanks to:

PRESIDENT’S MESSAGE Sincere thanks to George Dube, CPA, CA at BDO and WRAMA Treasurer, for stepping in to speak at our event in January. Weather took its toll on country roads, leading to the cancellation of our programmed speaker Sarah Van Allen from Van Allen Insurance. We are looking forward to having Ms. Van Allen at a future event.

Renee Charbonneau-Smith & Andrew Macallum

Presentation to City of Kitchener council On January 13, 2020, WRAMA was grateful to be given time to speak as a delegation to City of Kitchener council regarding a report on housing being presented on the same date. An excerpt from the presentation is below.

George Dube, BDO

A very special thanks to Renee CharbonneauSmith from the Healthy Living Division, Region of Waterloo Public Health, who provided an infopacked evening at our first event of 2020 on January 8. The full interview with Ms. Charbonneau-Smith can be found in this edition of RAV.

WRAMA values the relationships with our associate members and wants to support the growth of businesses in the industry. If you are a WRAMA associate member, please consider taking advantage of a table at one of our upcoming events. It is a perfect opportunity to promote your business to members.

Tables are available on a first come, first served basis – at no additional cost. Please contact president@wrama.com to secure your spot.

WRAMA applauds efforts by the City of Kitchener Mayor, council, and committee members in listening to the various stakeholders including citizens and groups that have a perspective to share about housing.

Like any conversation about housing, the media has picked up this story. CBC posted an article (following the Record’s lead the week before) that emphasizes the following factors that influence housing prices: • People

fleeing the Greater Toronto Area in search of relatively greener pastures • More young people choosing to stick around after graduation • New businesses setting up shop and bringing employees • People buying real estate as an investment The article goes on to state that: “Kitchener does not track housing that’s held on speculation, for investment or to generate income through AirBNBs and other kinds of “untracked” rental housing, the report said. Neither does the city track so-called “renovictions.” That’s when tenants are forced to leave their homes so renovations or redevelopment can take place, often resulting in higher rents being charged after the fact.”

WRAMA respectfully asks this committee, the greater council, and mayor to consider that rental housing is regulated provincially through the Residential Tenancies Act and its quasi-judicial tribunal system under the Landlord & Tenant Board.

River Rock Laundry, represented by Jeff & Jeff, at an Associate Member Table at The Tannery

Thanks to Brian Bourke for including WRAMA on the January 16th show on AM 570 Kitchener.

Listen here: https://www.570news.com/audio/kitchener-todaywith-brian-bourke/

The aforementioned article is correct in stating that the City of Kitchener does not track the sensational and misleading term “renovictions.” This term has been adopted by media to describe what the Landlord and Tenant Board formally refers to as an “N13” - Notice to End (a) Tenancy Because the Landlord Wants to Demolish the Rental Unit, Repair it or Convert it to Another Use. The City also does not track the multitude of other notices and applications that result in changes to housing and/or ends to tenancy agreements including:

- Andrew Macallum, President

rentalhousingbusiness.ca | 45

• ( T2)

Application(s) about Tenant Rights Notice(s) to End... Tenanc(ies) Early for Non-payment of Rent • (T7) Tenant Application(s) about Suite Meters

• ( N5) Notice(s) to End...Tenanc(ies) for Interfering with Others, Damage or Overcrowding It is doubtful that the City of Kitchener tracks delay times for LTB application processing. This issue has prompted the Ontario ombudsman to launch an investigation into delays at the Landlord and Tenant Board. Among the many factors that influence housing in our province and country are the layers of policy and regulation that are redundant and contradictory. The cities and townships in our region are not immune to this.

Rental housing providers big and small are a part of the solution to the housing challenges Canadians face across the country. With this in mind, and on behalf of the board of directors, my hope is that WRAMA will be considered a credible voice and community partner as the City of Kitchener moves forward with this housing report.

• ( N4)

Next event Stay tuned for more details at http://wrama.com/wrama-events/.

WRAMA directors Darlene Rehman (left) and Julie Popesku (right) get cheesy with WRAMA administrator Sandy Knapp (centre) at the January 8, 2020 WRAMA Education Event.

Picture your property smoke-free Many experts and legislative bodies have declared that smoking in multi-unit housing is a health issue. According to Health Canada, “children and adults who live in multi-unit dwellings where smoking is permitted have higher rates of exposure to second-hand smoke, even if no one in their home smokes.” Exposure to second-hand smoke can cause serious health problems, including heart problems, lung cancer, emphysema, breathing problems (such as asthma), and nasal, chest and ear infections.

The Region of Waterloo is a pioneer in smoke-free housing. In 2010, Waterloo Region Housing and Region of Waterloo Community Housing became the first community housing organization in Ontario to adopt a smoke-free policy for their housing portfolios. All new leases signed with the organizations are 100 per cent smoke-free.

Waterloo Region Public Health worked with the housing department to develop the region’s Multi-Unit Dwelling Smoke Free Policy Initiative.

As a landlord, you have a legal right to implement a smoke-free policy in your building. The Smoke-Free Ontario Act (SFOA), which came into force in 2006, helps to reduce access to tobacco products and protects workers and the public from the hazards of second-hand smoke. It prohibits smoking or holding lit tobacco and cannabis in any enclosed workplace, enclosed public space, and other places designated as smoke and vapefree. The legislation applies to multi-unit dwellings and prohibits smoking in common areas, including hallways, laundry rooms, stairwells, and garages.

“By developing and implementing a smoke-free policy, landlords have the right to prohibit the use of tobacco and cannabis combustible products that produce toxic second-hand smoke,” said Renee Charbonneau-Smith, Public Health Nurse, Healthy Living Division, Public Health. “A smoke-free building means that, at a minimum, smoking is not allowed within any part of a building, including the units and balconies.

This is a policy that goes above and beyond what is legally required under the SmokeFree Ontario Act, which states that smoking if prohibited in common areas.”

Smoke-free policies are enforceable under the Residential Tenancies Act. It covers any activity that substantially interferes with the reasonable enjoyment of the residential complex for all damage to the unit or serious impairment of safety. Under the Act, a landlord may give a tenant notice of termination of the tenancy if the conduct of the tenant, another occupant of the rental unit

46 | January 2020

or a person permitted in the residential complex by the tenant is such that it substantially interferes with the reasonable enjoyment of the residential complex for all usual purposes by the landlord or another tenant or substantially interferes with another lawful right, privilege or interest of the landlord or another tenant.

“Second-hand smoke has been identified as a breach of reasonable enjoyment at the Ontario Landlord and Tenant Board,” said CharbonneauSmith. “Just because someone exercises their freedom to smoke does not mean that they have an absolute right to smoke. A landlord may also give a tenant notice if the second-hand smoke from the tenant’s unit causes severe damage to the unit or building.”

There are three key steps to implementing a smoke-free policy in your rental property: 1. Develop a policy based on research, consultation, and legal advice. Review the current situation, including tenant complaints.

Identify where smoking will not be permitted and to whom the policy applies. Draft a policy; you can use samples found on the Smoke-Free Housing Ontario website. Select a start date to give sufficient notice to tenants and those on the waiting list.

2. Create a communication strategy. This includes clear and accessible tenant notification, changes to the applications and leases, and posting the

Over 30 years of industry excellence

change on your website, newsletters, and other media. Advise prospective tenants that the building is in transition, and that “grandfathered” tenants are permitted to smoke in their units (unless that smoking specifically interferes with a neighbour’s reasonable enjoyment of their apartment). Provide cessation support information as necessary.

3. Develop an enforcement strategy. Ensure consistent application of the process, and decide on how to handle infractions in advance. Use the same warning and enforcement procedures that you would use for other breaches of the tenancy agreement. Respond quickly and consistently to violations, and educate staff on procedures for dealing with complaints involving “grandfathered” tenants. Keep detailed records of incidents and complaints. Follow the necessary steps when you have to provide notification and take formal action.

“When investigating complaints, take steps to minimize smoke transfer, and follow up and document all complaints,” said CharbonneauSmith. “Be diligent in collecting evidence, such as who, what, where, and when incidents occurred, and document the effects of smoking in the building. When taking action, discuss ways to stop or reduce smoking, explore internal moves, and put solutions in writing.”

Modern Ideas, Professional Solutions

Mechanical Electrical Energy Audits Plus much more

416.250.7222

info@me-eng.com

me-eng.com rentalhousingbusiness.ca | 47

O O ne n O e Vo ne M ic e e M s , ag sa az ge in , e! k in Th

bs cr

to

u ho

e. su is xt ne e th in y! s is da e m to ri b ’ll e sc in ou az ub ty /s ag ha ca s.

e

w

ib

al nt

t ou ab

Su re

M

us

in

es

Vol. 12 No. 6 January 2020

B

b ng

RH

si

Canada’s #1 most widely read publication for Apartment Owners, Managers and Association Executives

Understanding tenants and the rental housing market

New rental regulation in the City of Ottawa

By John Dickie, Chair, Eastern Ontario Landlord Organization As reported in the last issue of Rental Association Voice, long-term landlords and tenants have achieved a win in the City of Ottawa. The City has rejected landlord licensing or registration in favour of enhanced property standards enforcement, focused on problem properties. That means money will not be wasted on inspecting buildings in good condition and processing paperwork. That means rents will not be forced up to pay for the cost of new compliance measures imposed on good landlords.

A group of low-income housing advocates and others had sought a landlord licensing program across Ottawa. The advocates sought an expanded version of Toronto’s “RentSafe” program to make every rental provider with three or more units pay $11 per year (plus potential audit fees) to fund proactive inspections of all building common areas, and make all those landlords meet all the paper burden that applies to landlords of 10 or more units in Toronto.

Some City Councillors sought pilot licensing projects around the University of Ottawa (in Sandy Hill), in Vanier, and around Algonquin College. That would have been like the licensing regime in Oshawa, which covers only the area of Oshawa near the university and college. Such a regime would have favoured the homeowners in those areas, many of whom dislike student renters.

Ottawa City staff determined that 90 per cent of rental units have not been the subject of a single property standards order for the last 10 years, and 23 per cent of the orders have been issued against just one half of one per cent of rental units (0.5 per cent). On that basis, City staff reported that landlord licensing or registration would provide little, if any, benefit, while wasting resources and inflating rents.

As a result, staff recommended against any landlord licensing anywhere in the City of Ottawa for rental operators of any size or type.

Conclusion at City Council on November 27 At City Council, “progressive” councillors tried again. They garnered seven votes for a motion directing City staff to study the costs and implications of a landlord licensing pilot in Sandy Hill and Vanier, against 14 opposed, including Mayor Watson.

Action the City is taking instead of licensing City staff recommended enhanced enforcement focused on problem addresses, and the provision of additional consumer education for residents.

Specific measures recommended by City staff and the Community and Protective Services Committee, and adopted by City Council, include: 1. Enacting a Rental Property Management By-law requiring landlords to give certain information to tenants in writing (about maintenance requirements, parking rules, and garbage handling)

Short-term rentals The City staff report recommended allowing short-term rentals by people in their principal residence, but not in other dwelling units (e.g., investor owned condos, non-owner-occupied units of duplexes and triplexes, or carriage houses, even if the main house is owner occupied). City Council adopted that approach on November 27.

Short-term rental operators have launched a new association, called the Ottawa Short-Term Rental Association (OSTRA), to seek to either reverse the new regime or mitigate it. EOLO looks forward to working with OSTRA on any matters of common concern under the new rental regulations.

rentalhousingbusiness.ca | 49

2. E nacting additional pest and vermin control regulations, with standards and obligations for both landlords and tenants 3. C harging re-inspection fees to landlords who fail to comply with property standards orders 4. A dding two additional property standards officers to focus on problem addresses 5. Establishing a consumer protection and education website with:

a. E ducational content on tenant rights and related issues

b . An online searchable database to display any history of non-compliance with property standard orders 6. Exploring the feasibility of providing Property Standards Compliance Reports to both tenants and landlords following investigations EOLO believes that this enhanced enforcement system will be more effective at improving property maintenance than landlord licensing or registration. It will also be less onerous for good and average landlords.

Large and small landlords working together As noted in the last issue, EOLO did a considerable amount of work to make the landlord arguments to the City’s consultant, City staff, and City Councillors. During the consultation process, EOLO made extensive written submissions. Much of our work was reflected in the consultant’s report and the City staff report.

In addition, EOLO met several times with the two associations representing small landlords in Ottawa—the Ottawa Region Landlord Association (ORLA) and the Ottawa Real Estate Investors Organization (OREIO)—to alert hundreds of small landlords and investors to the consultation process, and how they could provide input. EOLO also engaged small and large landlords in how to stay united, rather than pointing fingers at each other.

The work done by EOLO, supported by Ottawa’s large landlords and the grassroots participation of Ottawa’s small landlords, enabled Ottawa’s rental housing providers of all sizes to avoid landlord licensing and registration fees.

This will benefit investors, renters, and taxpayers by keeping costs down, and avoiding the waste of resources entailed in inspecting the many good quality properties, instead of focusing inspection on the small percentage of known problem properties.

Steps from here EOLO will be meeting City staff to help develop the new requirements for both landlords and tenants with respect to pest control. It seems clear that landlords will be required to bring in professional pest control operators. As well, tenants will almost certainly be required to follow the reasonable instructions of the landlord or the pest control operator as to unit preparation. Tenants who fail to do that will likely be subject to visits from a by-law officer and potentially fines from the City. That may be a significant benefit for landlords in obtaining tenant compliance more quickly and cheaply than can be done now through the Landlord and Tenant Board.

EOLO will also provide input to City staff about the new Rental Property Management By-law. Upon request, the landlord will be required to give a copy of the information (with the tenants’ signature) to a by-law officer. Whenever possible, the by-law officer is to determine who broke the rules and fine that person, even if that is the tenant. Examples could be garbage put out too early, or garbage bins not brought in by the appointed time.

50 | January 2020

Conclusion EOLO’s vigorous lobbying work at the City has saved landlords (and tenants) about $22 per unit per year, based on $11 for the Toronto fee and the same amount for the administrative cost of compliance with a registration system. As against the cost of landlord licensing, the savings run between $200 and $400 per unit per year, which is what Oshawa and three other Ontario cities charge for their landlord licensing systems.

New Ottawa water and sewer charges In April 2019, the City of Ottawa implemented its new system for charging for water and sewer services with a fixed rate based on the pipe size, as well as a lower rate for water consumption and sewage. The goal was to lessen the impact of water savings measures in reducing the City’s revenue, which the City sought to raise to cover the capital costs for renewing the water and sewer pipes, which is much more costly than operating the system.

The new water rate system was designed three years ago, and includes a new fixed charge for the stormwater system, which had been previously paid for through water and sewer charges. EOLO achieved a major win for landlords by persuading the City to provide a 50 per cent

discount on the per unit stormwater charge for apartments and row houses, as compared with single family homes.

City staff realized that the amount of runoff is dependent on the amount of hard surface on each lot. Thus, EOLO argued that a single family home with a large roof area per square foot of living area imposes a larger cost than apartments or row houses where the same roof area serves more units. Similarly, a long or two car driveway represents move pavement per unit than the paved areas at most rental buildings.

In 2017, EOLO reviewed sample water bills to calculate the likely effect of the new water rate system. We projected that landlords would achieve a saving of 2 or 3 per cent, which was certainly better than a rate increase. To test the actual results, we have now recalculated the charges for the 2016 water consumption based on the 2019 rate system.

Over three years, the landlord figures show an average water bill increase of 12.2 per cent. In contrast, the system charges as a whole have gone up 16.6 per cent. If EOLO had not obtained the 50 per cent discount, the average landlord’s water bill would have gone up by 20.3 per cent.

EOLO’s work resulted in savings of between $24 and $40 per year per rental unit for the average landlord of two or more units.

WE MAKE BUILDINGS WORK LONDON

KINGSTON

DOES THE GROWTH OF YOUR BUSINESS INCLUDE EXPANSION, RENOVATION OR A NEW BUILDING? Callidus Engineering provides Plumbing, HVAC, Fire Protection and Electrical building services design for customers across Canada

info@callidus.ca www.callidus.ca VISIT OUR WEBSITE FOR A FULL LIST OF OUR ENGINEERING SERVICES AVAILABLE

rentalhousingbusiness.ca | 51

Discover why most people choose Cogeco for Internet and TV.*

Contact your Cogeco Account Manager at 905-337-7909 or email stacey.norton@cogeco.com to discuss our customizable packages and offers for your residents.

*Based on a 2017 CROP Survey, where Cogeco is available.

PRESIDENT’S MESSAGE Happy New Year! We are looking forward to an exciting new year ahead, with all of the new opportunities and challenges it will hold. The new year comes with many changes. We welcome two new board members to the HDAA, Anya Heath and Jeff Gilpin, and say goodbye to those leaving the board, Robert Fleet and Lucie Brusse, both of whom made significant contributions to the HDAA during their time with us. We also welcome a new administrator, Anna Kusmider, who will be taking over for Diane Currell and building on the great work that she has done over the many years as our administrator. We hope everyone had a great holiday season and we look forward to seeing everyone at our events this year!

- Arun Pathak, President

Licensing update We will be continuing the fight on licensing in 2020 and expect to see some more developments this year. The City of Hamilton had a Planning Committee meeting on December 3, where they discussed and approved the Temporary Use By-law Pilot Project for wards 1 and 8, and part of ward 14.

This pilot project provides for alternative zoning by-law standards on a temporary basis for three years to facilitate the creation of an accessory dwelling in single detached and two-family dwellings by amending specific provisions of Section 19 – Residential Conversion Regulations in City of Hamilton Zoning By-law No. 6593 with respect to lot area, unit size, and parking.

While HDAA is fairly supportive of this pilot project, as we believe it is a start to not only helping maintain the number of rental units but perhaps increasing the supply of rental units within the City of Hamilton, there are concerns that this pilot project is a precursor to the licensing regime. There is also a concern about this being a temporary project, as there may be hesitation to invest in accessory dwellings

should, come the end of the pilot project, they are no longer seen as legal by the City.

Licensing was not discussed at the December 3 meeting and has instead been postponed to May 19, 2020.

HDAA is strongly against licensing in the City of Hamilton and believes it will fuel the unaffordability crisis that we are facing, as it will likely mean a further increase in rental prices throughout the City. The City of Hamilton will be taking the stance that they are “not open for business” as a licensing regime may hinder the interest for investment in rental housing in the City. This, compounded by the cancellation of the LRT, may push development to other communities that are making it more appealing for investors and developers. HDAA will continue to participate in discussions on licensing and hopes that the City will hear our concerns and work with us in partnership to find a better solution for the City of Hamilton that will be beneficial for all parties involved.

rentalhousingbusiness.ca | 53

Recent events January 9, 2020 – Dinner Meeting Our first dinner meeting of the year was a great success.

Marvin Ryder, an Assistant Professor of Marketing at the DeGroote School of Business for more than 34 years, joined us to speak on the economic outlook for 2020. Mr. Ryder has contributed greatly to the City of Hamilton; he has sat on numerous boards including Hamilton Place, Hamilton Convention Centre, and Copps Coliseum. He was also Chair of the Transition Board for the new City of Hamilton and the Hamilton Health Sciences Board of Directors. He has written more than 70 case studies illustrating marketing, business strategy, and entrepreneurship problems, including case studies on Porsche, Union Gas, Crayola, and Molson Breweries. Today, he is most recognized for nearly 350 appearances annually on television, radio, and in newspaper, commenting on business issues of the day.

Mr. Ryder provided some great insights to our membership of what to expect in the coming year. The overall Canadian economy grew approximately 1.5 per cent in 2019 and 2020 should see similar growth, our unemployment rates are at some of the lowest levels we have seen in nearly half a century, and our dollar has been steady compared to the U.S. dollar, fluctuating from approximately 75 to 78 cents for every U.S. dollar. As with 2019, there are no indications that interest rates will change this year; if there are any changes, interest rates may decrease slightly. Overall, 2020 is predicted to be quite similar to 2019. A possible recession has been on everyone’s mind, however, particularly due to the inverted yield curve we have been seeing (yields on bonds with a shorter duration are higher than the yields on bonds that have a longer duration). However, Mr. Ryder has put everyone’s mind at ease with his prediction that there will be no recession in 2020 (as long as political issues don’t get in the way).

The hot button issue on everyone’s mind in Hamilton is the recent cancellation of the LRT and what this means for the City in regards to growth and development. Mr. Ryder provided his thoughts on this topic.

He believes that intensification is still very likely along the now cancelled LRT corridor. It seems the LRT is likely dead but, on a positive note, this opens up the possibility of other transit options within that corridor, and we look forward to see what the City of Hamilton proposes.

Things to look out for past 2020? The aging population means balancing our budgets will be more problematic and more creative options and strategies will need to be looked at, and they will need to looked at now. There are talks about potential changes to the capital gains inclusion rate as one such strategy, which would have a drastic impact not only on the rental housing industry, but on anyone who invests in capital earning investments. CFAA is currently creating an Action Plan in regards to this and HDAA will be representing our membership in any discussions.

54 | January 2020

Upcoming events March 12 – Dinner Meeting Wondering about the CMHC Rental Market Report for 2019? Join us at our next dinner meeting on March 12, 2020 to hear HDAA President, Arun Pathak, present last year’s findings, and get a Real Estate Market Update and Outlook for 2020 from Lucie Brusse, Commercial Real Estate Advisor, Royal LePage Burloak Real Estate Services.

April 15 – HDAA Trade Show Our annual Trade Show will be held at Michelangelo Events & Conference Centre.

It will be a great opportunity to meet some amazing suppliers to the rental housing industry. The suppliers who exhibit are also members of the HDAA, so you know they support housing providers. We have some great things up our sleeves this year to make this the best trade show yet. Keep an eye out on our website and emails for more information leading up to the event.

June 24 – Golf Tournament Looking for an excuse to spend some time outdoors during the week? Our annual golf tournament will be here before you know it. We are hosting this year’s event at Century Pines Golf Course. We will be sending out early bird registrations soon, so keep an eye out for those and make sure to reserve your spots quickly as space is limited.

Hamilton and District Landlords Since 1960, the Hamilton and District Apartment Association has grown significantly. Our members manage over of 30,000 units throughout Hamilton, Burlington, Brantford, Guelph, Mississauga, Oakville, St. Catharines and into the Niagara Peninsula. The association is a highly respected organization, sought out regularly by government, industry, media and the public.

Interested? Call us or join online!

Ph: 289-208-5445 Web: www.hamiltonapartmentassociation.ca

rentalhousingbusiness.ca | 55

Affordable Housing Conservation Program

Comfy living for tenants.

Comfy energy bills for you.

Visit uniongas.com/ affordablehousing to learn more

We’ll cover up to 50% of the cost when you upgrade to high-efficiency equipment The Affordable Housing Conservation Program provides financial incentives for high-efficiency space and water heating equipment, heat recovery, building automation systems and more.

uniongas.com/affordablehousing

PRESIDENT’S MESSAGE

Looking ahead to 2020 I would like to thank all of our members and associates for a wonderful end to 2019. The final event of the year, our Christmas party, was well attended by approximately 180 people. Members also contributed generously to the Salvation Army Toy Drive, which provides toys to underprivileged children. In addition, we honoured long-time member Brenda Trineer with a lifetime achievement award. Brenda was an active board member during her time and she acted as committee chair for the charity golf tournament through its 20th anniversary this year.

In this issue, we’ve featured a story that deals with a new affordable housing initiative and another that focuses on ways that landlords can mitigate risk with respect to window air conditioners.

Stayed tuned to our website for information pertaining to our upcoming monthly meetings.

Thank you for all of your support for a magnificent 2019!

- Shirley Criger, LPMA President LONDON CONSIDERS A PLAN TO INCREASE AFFORDABLE HOUSING UNITS The City of London is working on a new initiative that could help developers and non-profits overcome the barriers to developing affordable housing units.

Travis Macbeth, a city planner and the project’s lead, said that the draft Affordable Housing Community Improvement Plan calls for interestfree loans that could help developers and nonprofits offset the costs of development charges and land acquisition that were identified during consultations last summer.

“It’s to encourage more mixed-income and mixeduse development, and encourage more affordable units being constructed,” Macbeth said. “There’s a need for this at the low end of the market to affordable level.”

Housing is considered to be affordable if it costs 30 per cent or less of pre-tax income of low- to moderate-income households, according to the

Canada Mortgage and Housing Corporation (CMHC).

Through the plan, the City aims to aid those who are earning too much to qualify for rent-gearedto-income housing, but not enough to afford high market rents. More than 50 per cent of renter households can’t afford $1,021 a month for an average one-bedroom apartment. Macbeth said one of the plan’s goals involves defining affordable housing needs based on household incomes.

Private-market developers and non-profits would enter into interest-free loan agreements with the City based on the cost of the units being created.

Homeowners who create secondary or granny suites in their homes would also be eligible for loans. The plan suggests that loans be offered at $20,000 for each affordable unit and for each secondary suite (to cover renovation costs).

Developers would need to build five or more affordable housing units in a multi-residential building or townhome complex, Macbeth said.

Developers and non-profits would be required to develop new affordable units at or below the City’s average market rent, as defined by CMHC. The City will assess the rents that existing secondary suites are commanding. The aim is to make home ownership more affordable and increase the long-term rental supply.

“This is just to encourage more of those units being created,” Macbeth said. “Anecdotally, it’s the idea that basement units are going to be cheaper than any other newly built unit in an apartment building.”

Early in the new year, planners will present the final draft of the Community Improvement Plan. If the plan is approved at the end of the multi-year budget process, and funding is available, the City could enter into loan agreements with applicants.

The plan would also unlock funding from upper levels of government. The National Housing Strategy, a 10-year multi-billion-dollar plan, requires co-investment from the City to access a particular stream of federal funding. The City’s loans represent its portion of the co-investment.

rentalhousingbusiness.ca | 57

L A N D L O R D S C O N T E M P L AT E R E S T R I C T I O N S T O W I N D OW A I R CONDITIONERS Owners and managers of multi-residential buildings are rethinking the rules that allow tenants to install window air conditioners in their apartments.

The change comes following the death of Crystal Mirogho, a two-year-old who was hit by an air conditioner that fell from an apartment window in a Toronto Community Housing high-rise building last November.

Joe Hoffer

As a result of that tragedy, Toronto Community Housing Corporation (TCHC) announced in a news release that it will no longer permit tenants to install window air conditioners and has begun removing them in a phased approach. It will replace each window air conditioner with a new floor-mounted model air conditioner, at no charge to the tenant, before the start of the 2020 cooling season, as part of its existing exchange program.

London lawyer Joe Hoffer said that landlords are tightening their rules in an effort to mitigate risk. Air conditioning units that are improperly installed by tenants can fall, injuring or killing pedestrians below, but landlords would likely be sued, even though they weren’t responsible for the installation.

One way of mitigating risk is to amend a lease to restrict the installation of window air conditioners and help the landlord ensure the safety of any person entering the property, Hoffer said.

The landlord is required under the Residential Tenancies Act, the Occupier’s Liability Act, and simple duty of care civil liability to minimize such risks.

Hoffer said one landlord with a large portfolio took the position that no window air conditioner could be installed unless it was directly over a tenant’s balcony, or there was a maximum of four feet between the air conditioner and the ground.

Currently, the Rules and Regulations of the LPMA lease state that tenants aren’t allowed to use air conditioners without first obtaining the written consent of the landlord and paying a charge to cover the additional use of electricity. Some landlords take the additional step of restricting the size of the unit, requiring that a professional install it and then confirm in writing that it was installed safely. Others stipulate that the landlord be allowed to inspect the unit following the installation.

“The basis for granting consent varies among landlords,” Hoffer said.

It is Hoffer’s position that once a public housing provider—in this situation, TCHC—issues restrictions, the standard of care dictates that restrictions be imposed overall on the installation of air conditioners.

Hoffer said one appropriate restriction centres on limiting where air conditioners could be installed in relation to something below that could break their fall if they toppled out of a window. Another is to prohibit them completely, which he believes is excessive. A third and more viable option is to limit air conditioners to portable floor units if tenants can’t meet the minimum ground-to-unit ratio.

58 | January 2020

“In my view, that would be a reasonable restriction in light of what occurred in this case,” he said.

Hoffer said landlords don’t need to change the language of their lease to make a restriction.

However, they might experience some resistance from tenants who have used window air conditioners for many years.

“Those residents could take the position that this is grossly unfair, that they’ve been allowed to do it before, and the landlord can’t prevent them from continuing to do it,” Hoffer said.

In the Waiver section of the LPMA lease, the landlord and the tenant acknowledge that just because landlords have agreed to something in the past doesn’t mean that they have waived their rights under the lease going forward. Although that clause is in the landlords’ favour, Hoffer doesn’t recommend that they solely depend on it to make their case. He suggests that they send a notice to residents outlining the restrictions and the reason for them.

“They should point out that, as a result, TCHC has introduced the same restrictions that the landlord is going to introduce, that it’s being done for the safety of residents and anybody who comes onto the property, and that it is going to be the rule going forward,” Hoffer said.

The Rules and Regulations in the LPMA lease also allow landlords to use their rule-making power.

They could tell tenants who resist that this is a new, but very real, risk that landlords hadn’t contemplated before and, to meet their standard of care, it’s appropriate to introduce a rule.

“I think that would really nail things down,” Hoffer said. “If a landlord gets some pushback, he can say, ‘Fine, we’ll enact a rule under the terms of the lease and you better comply with it or else we’ll initiate proceedings.’”

If that occurred, a landlord could initiate a notice of termination due to the tenant’s interference with the landlord’s legal interest in ensuring the safety of anyone who comes onto the property.

Hoffer likens it to a common law duty of care and standard of care, and it’s also a statutory standard of care under the Occupier’s Liability Act.

Hoffer said landlords should put a notice in tenants’ mailboxes explaining the new rule. If it is worded properly, it won’t reflect poorly on the landlord.

“It’s going to make the landlord look good that they’re taking this kind of issue seriously, that they’re following a protocol that’s been established by essentially a municipal government agency, and that it’s being done for the safety of anybody who comes onto the property, including residents, their children, and so on,” Hoffer said.

It also demonstrates that landlords are taking action before another tragedy could occur.

London Property Management Association (LPMA) is a non-profit organization, located in London, Ontario, Canada, that provides information and education to landlords.

LPMA represents the interests of both large and small property owners. The association has more than 400 landlord members representing approximately 35,000 rental units.

Membership is open to landlords and property management professionals who own or manage one or more residential rental units.

Sign up online or call Cassie Allison.

Ph: 519-672-6999 Web: www.LPMA.ca

rentalhousingbusiness.ca | 59

Brought to you by:

SUITE COUNT RHB SIDEBAR Capital markets & national investment snapshot

National Apartment Group

Canada multifamily: Looking ahead to 2020 Multifamily investment increased for the fifth consecutive year to approximately $10 billion in 2019, the largest trade volume ever and the second highest of any industry sector in Canada for the first time since 2012. The increase in sell-side momentum coincides with defensive portfolio strategies, shifting cyclical factors, and dispositions of privately-held legacy assets following a historic lift in values.

On the buy-side, Canada’s multifamily sector has captured the attention of both domestic and international investors who are increasingly motivated by the attractive fundamentals in Canadian markets. The asset class’s excellent long-term performance and impressive returns experienced in recent years have incentivized purchasers to shift portfolio strategies toward acquiring a greater share of multifamily investments. Investors are searching for large acquisitions in primary cities such as Toronto, Vancouver, Ottawa, Montreal, and Halifax to achieve increased exposure to Canadian multifamily and enhanced operating scale.

Looking at the year ahead, the market shows no sign of slowing down as investors remain bullish on Canadian purpose-built rental markets. Most importantly, active groups have indicated that despite elevated trade volumes seen in 2019, there is substantial room to grow their Canadian multifamily strategies going forward. Lenders also plan to increase fund allocations to the multifamily asset class in 2020: 39% of respondents to CBRE’s 2019 Lenders’ Report confirmed increasing budget allocations toward the sector. Growing investor appetite paired with widespread availability of cheap debt will make for another busy year ahead in multifamily markets across Canada.

KEY PORTFOLIO TRANSACTIONS Brock-King – Eastern Ontario

• • • • •

Vendor: Westdale/ Effort Trust Location: Kingston, Brockville Number of units: 1,390 Purchase price: $143.0 million CBRE Transaction

Balnar Portfolio – Greater Golden Horseshoe

• • • •

Vendor: Balnar Management Ltd Location: Guelph, Kitchener-Waterloo, Cambridge Number of units: 1,595 Purchase price: $391.8 million

60 | January 2020

Continuum REIT – GTA, Hamilton, London, Ottawa

• • • •

Vendor: Continuum REIT Location: Greater Toronto Area+ Number of units: 6,271 (44 buildings) Purchase price: $1.732 billion

QuadReal Portfolio – Halifax, Nova Scotia

• • • • •

Vendor: QuadReal Location: Halifax, Nova Scotia Number of units: 1,503 Purchase price: $391.0 million CBRE Transaction

Local Knowledge.

National Reach.

National Apartment Group

8

$16B

OFFICES ACROSS CANADA

IN SALES VOLUME

Contact us to learn more about how we can help you

www.cbre.ca/nag-canada