RHB Magazine January 2024

Vol. 16 No. 4 Dec/Jan 2024

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

The official publication of:

Holt Meadow Group:

The future looks bright

The challenge of converting office space into housing

Converting underused office buildings into rental housing is easier said than done.

Driving innovation and connecting communities Technology can help to support the next era of multi-family housing.

International students and the housing crisis The federal government has created a problem it is now trying to solve.

North America's Leading Team of Engineers, Project Managers, Technical Experts, and Problem Solvers Egis, formerly known as McIntosh Perry, provides a full range of consulting engineering and technical solutions that encompasses every stage of a project.

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EDITOR’S NOTES Happy new year!

Happy new year to all our readers. By the time you read this magazine, I will have recently returned from a family trip to Sint Maarten, where we celebrated our 25th wedding anniversary. This is about 10 years longer than I’ve worked with RHB Magazine, although it feels like I’ve known Marc Côté (the publisher) for much longer. We’ve covered an incredibly wide range of topics related to rental housing, and have spoken to practically everyone who is anyone within the industry. A lot has changed over the years, and we can expect more to change going forward, but rental housing will always be essential in Canada.

This issue of RHB Magazine features a profile on Holt Meadow Group, a relatively new property management firm. The company started as a subsidiary of Pinemount Developments, a multi-family property developer, but is now forging its own path in the GTA’s rental housing market. The article includes insights from Oren Turkienicz, the company’s CEO, who plans to take an innovative approach to property management going forward.

The second article examines the topic of office-to-residential conversions in major Canadian cities. The combination of high office vacancy rates and the lack of affordable housing means adaptive reuse can help to turn underoccupied offices into residential housing units, but developers should know it’s easier said than done. The third article discusses how the federal government’s policy of increasing the number of international students without also increasing the housing supply has worsened the affordable housing situation in Canada.

Don't forget to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. FRPO announces the MAC Awards winners and provides an update on the latest advances in the Let’s Build Ontario campaign. Yardi Canada wraps up this issue by describing the benefits of removing the GST from rental housing developments.

We 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 your emails.

Publisher

Marc Côté marc@rentalhousingbusiness.ca

Associate Publisher

Nishant Rai nishant@rentalhousingbusiness.ca

Editorial

David Gargaro david@rentalhousingbusiness.ca

Creative Director / Designer Scott Clark

Sales Executive

Justin Kreslin justin@rentalhousingbusiness.ca

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 Produced in Canada

Enjoy the issue!

David Gargaro Senior Editor

4 | December/January 2024

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

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CONTENTS

VOL.16 NO.4 2023

30

International students and the housing crisis

The federal government has created a problem it is now trying to solve.

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

Holt Meadow Group: The future looks bright

Hot Topics: EOLO announces the launch of Ottawa's new Property Standards Search Tool, and outlines its support for KRPOA's response to landlord licensing in Kingston. pg. 49 HDAA discusses the short-term rental bylaw, as well as updates on the renovictions and safe apartment buildings bylaws. pg. 53

Holt Meadow Group, a relatively new firm backed by decades of real estate experience, plans to take an innovative approach to traditional property management.

LPMA explains how rent-to-own agreements require a higher level of trust from all parties, and discusses how preventative maintenance reduces landlords' liability. pg. 57 SKLA celebrates its 30th anniversary, announces a grant to develop and deliver a legal education program for rental housing providers, and discusses its advocacy efforts. pg. 61

The Member Associations

47

Regional Association Voice

64

Final Take Away

RAV features the latest industry news from four member associations.

The challenge of converting office space into housing Converting underused office buildings into rental housing is easier said than done.

6 | December/January 2024

Driving innovation and connecting communities Technology can help to support the next era of multi-family housing.

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PRESIDENT’S CORNER This issue of National Outlook provides an update on this year’s CFAA Rental Housing Conference, as well as the Rental Housing Awards. It also provides an update on the passage of Bill C-56, An Act to amend the Excise Tax Act and the Competition Act, and information on KRPOA’s submission in opposition to the City of Kingston’s rental licensing program.

results at a meeting on January 24, 2024. The Kingston Rental Property Owners Association (KRPOA) has registered as a delegate for the meeting, and has put together a submission to oppose the RRLP. See pages 38-40 to read more about the submission.

If you are not already a direct member of CFAA, please consider joining CFAA as a Direct Rental Housing Provider Member, or a Suppliers Council Member. Visit www.cfaa-fcapi.org or email admin@cfaa-fcapi.org today.

During the fall session at the House of Commons, the federal government passed Bill C-56, An Act to amend the Excise Tax Act and the Competition Act. The key feature is that the Act eliminates the GST from new rental housing projects starting construction between September 13, 2023 and the end of 2031. This is a positive step toward increasing the development of rental housing and addressing the housing shortage.

HUMA also released its report on the Financialization of Housing. CFAA and several CFAA members participated in the study, and we are pleased to report it did not include recommendations to address the so-called financialization of purpose-built rental housing.

The report covered a number of themes, including the preservation and expansion of affordable housing, taxation and real estate investment, private sector and non-profit investment, tenant support and affordability, and beneficial ownership and transparency. See page 37 to learn more about the report.

National Outlook also reports on the City of Kingston considering a rental licensing program.

Back in December 2022, Kingston City Council passed a motion to examine the implementation of a pilot Residential Rental Licensing Program (RRLP). If the program is approved, rental properties with one to three units would be required to meet certain health and safety standards. The City of Kingston’s Administrative Policies Committee has gathered feedback from various groups on the RRLP, and reviewed the

8 | December/January 2024

Tony Irwin President and CEO, FRPO, and Interim President, CFAA

In this issue of... NATIONAL OUTLOOK CFAA Member Associations 37. What key themes were covered in the HUMA report on the financialization of housing? How do the recommendations address the housing shortage?

Corporation des Propriétaires Immobiliers du Québec (CORPIQ) www.corpiq.com P: 514-748-1921 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

37. What did Federal Housing Minister Sean Fraser talk about at the Empire Club's luncheon on the national housing crisis?

What can cities do to qualify for federal funding?

Photo credit: The Parliament of Canada

Greater Toronto Apartment Association (GTAA) www.gtaaonline.com P: 416-385-3435 Hamilton & District Apartment Association (HDAA) www.hamiltonapartmentassociation.ca P: 905-632-4435 Investment Property Owners Association of Nova Scotia (IPOANS) www.ipoans.ns.ca P: 902-425-3572 LandlordBC www.landlordbc.ca P: 1-604-733-9440 Vancouver Office P: 604-733-9440 Victoria Office P: 250-382-6324

38. What is Kingston's Residential Rental Licensing Program? How is KRPOA planning to respond to the pilot program?

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

London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999 New Brunswick Apartment Owners Association (NBAOA) www.nbaoa.ca jbrealsetate@nb.aibn.com 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

The Canadian Federation of Apartment Associations represents the owners and managers of

P: 204-957-1224

close to 1.5 million residential rental suites in Canada, through 13 apartment associations and

Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149

direct landlord memberships across Canada.

CFAA is the sole national organization representing the interests of Canada’s $950 billion rental housing industry.

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

10 | December/January 2024

Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703

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Holt Meado The future l bright

By David Gargaro

Holt Meadow Group is a relatively new property management firm, but they’re backed by decades of real estate experience. Although they started as a subsidiary of multi-family developer Pinemount Developments Ltd., the privately owned and operated property manager plans to forge their own path in the GTA’s rental housing market. They believe their innovative approach to traditional property management will elevate the resident experience and create more value for the owners of these properties.

“Our hope is to establish ourselves as the premier, new third party management service, and continue to build our presence in a tight Canadian rental market,” said Oren Turkienicz, CEO, Holt Meadow Group. “As long as we continue to push the vision of high-quality management, and introduce innovative practice that assists in expanding our clients’ ROI, we think we will see a lot of success as the market continues to grow.”

14 | December/January 2024

ow Group: looks

rentalhousingbusiness.ca | 15

About Oren Turkienicz

About Pinemount Developments

Real estate has always been a family affair in Oren’s household, as his family has a long history in real estate development and commercial property management. He learned a lot about what happens behind the scenes, Oren Turkienicz the development of processes, and how his parents came up with strategies to solve problems.

Eli is founder and president of Pinemount Developments. He has been a real estate developer and investor for more than 30 years, and has launched and completed numerous multi-million-dollar projects. He spent those decades growing his family development firm’s portfolio through the acquisition and construction of commercial and industrial buildings and condominiums, multi-storey office buildings, and detached and semi-detached residential homes.

“Real estate is a game of strategizing, and it helps if you are exposed to it at a young age,” said Oren.

Oren formalized his education in real estate at the University of Guelph, enrolling in the BComm Program with a specialization in Real Estate and Housing. He took part in the university’s co-op program, working in various roles in different organizations, including a large multinational REIT, a public utility company, and a startup industrial REIT. After graduating in 2015, Oren went into the construction finance business, learning more about the real estate industry from the lender’s perspective.

Oren’s father, Eli, later asked him to join his firm, Pinemount Developments, after starting construction on two new projects. Oren eventually became Vice President of Acquisitions, where he is responsible for acquisitions and development of new opportunities, interacting with lenders, project management, and servicing investors and lenders.

“At first, the concept of joining the business was a bit nerve-racking,” said Oren. “You never know how your personalities are going to align with, not just your family, but with your father. Luckily, I think the both of us complement each others’ skills well. Eli has a very calm, patient approach to business and it is a great feeling to be able to watch him operate and apply those characteristics into my approach as well."

Oren is a member of the Urban Land Institute, the world’s oldest and largest network of crossdisciplinary real estate and land use experts; the Kehilla Residential Programme, which identifies and champions affordable housing initiatives that meet the needs of the Jewish community; and the UJA Federation of Greater Toronto. He also enjoys playing softball and basketball, and spending time with friends and family.

“I make sure to spend as much time as I can with my family and friends in my off-time,” said Oren.

“The days are busy and can be stressful, so it is important to prioritize. I’m always in work mode, so when I can travel, I like to take advantage of it.”

16 | December/January 2024

In 2010, Eli founded Pinemount Developments, which focuses on building multi-family real estate developments across the Greater Toronto Area and southern Ontario. To date, they have built (or planned to build) hundreds of units and more than one million square feet of real estate.

"In real estate, they say location is everything, but it’s really all about the vision of what you can do with that location,” said Eli. “Pinemount prides itself on its ability to source strategic lands in fundamentally strong real estate markets, execute on entitlement, and push through construction in an efficient manner.”

Pinemount Developments provides various services to the rental housing market. They include finding land opportunities to develop mid- to high-rise purpose-built apartments, site sourcing, land use planning, and on-site preparation, construction, and maintenance.

They have developed a variety of multi-family residential communities, including purpose-built rentals, condominiums, and student rentals.

Some of Pinemount Developments’ projects include: • Ferndale Gardens, a 64-unit apartment building in the Ardagh Bluffs neighbourhood of Guelph • Gorman Park, a 170-unit purpose-built rental in Bathurst Manor neighbourhood of North York (to be completed in 2025) • 166 College Avenue West, a 110-unit building in the Old University neighbourhood of Guelph • 600 James Street North, a 72-unit apartment development in the West Harbour neighbourhood of Hamilton (to be completed in 2025) “Ferndale was a very nice four- to five-storey storey walk-up in Barrie, newly built with nice amenities,” said Oren. “The building was completed in September 2020, directly in the middle of the initial COVID-19 outbreak. As you can imagine, there were some complications and difficulties finalizing and completing a building when we didn’t know the outcome or what might happen the next day. Our patient approach to leasing, managing key stakeholders, continued on page 20

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Q&A with Oren Turkienicz RHB: How do you think the rental housing market has changed over the years?

Oren: I think that the rental market has seen a significant shift in the last decade. It has gone from a stigmatized real estate asset to one that demands a customer service approach.

Consider some of the new assets that have come to market and have won awards in the last little while. Highly amenitized, focus on community, creating livable common space, with livable living spaces.

RHB: What does this mean for property management and customer service?

Oren: This of course comes with a higher price tag on a monthly basis, so the management and service quality is now a key consideration for renters, even in this tight market. In the past, the simple rectangular building was all that was offered and all that was expected. Now there is a higher demand for something more and I think that management will have to evolve to meet this new approach and expectation.

RHB: Has the change in mindset from tenants affected owners?

18 | December/January 2024

Oren: The mindset hasn’t just changed for renters, but for owners as well. I believe there is a real push by existing owners to find ways of maximizing their net operating income, and reducing their costs, and the commitment is there is expend some capital to do so.

The technology has arrived where you can generate savings on the operating expenses for each asset, and it seems that owners are looking for someone to consult with that has an eye for this integration and innovation. We hope to be their first call.

RHB: Where can rental property developers find room for improvement and growth going forward?

Oren: On the developer side, we feel there is a gap on the onset of a project, all the way through to stabilization. If you were to look at a condo development, as an example, the number of consultants related to the “feel” of the building, the marketing and strategy around the layouts, are vast. There is a long list of consultants that are applied in the early stages to ensure the success of a project. This is missing on the rental side, and we believe we can fill that gap.

continued from page 16

and managing an unknown and unprecedented business and construction environment led us to lease the building at market highs, and sell the building at a market average per door that was the highest in Barrie ever. A lot of perseverance, patience, and calm was needed to ensure a smooth delivery of the building for both sale and leasing.”

new innovative asset implementations to further increase the return on investment for their assets.

Launching Holt Meadow Group

When Holt Meadow Group first entered the market, Oren wanted to see how the purpose-built rental market would evolve and where the market was heading. As interest rates started to increase, and a notable softening ensued Daniela Douglas in the condo market, he felt it was the right time to start building the team. This led to a dilemma commonly found in the management industry: do you build the back office first or find clients first?

Oren felt that the success of the business would be built on the team they employed.

When Oren came on board with Pinemount Developments, they decided to focus their development company on purpose-built rentals in the secondary market. After they completed their first two projects, they interviewed and implemented several different management companies. They noticed a similar theme and approach in how the firms operated. Since Pinemount Developments was quite hands on in their business, and given their role as development managers, they decided to create Holt Meadow Group to provide the same services to their clients.

"When Pinemount originated, we both felt conviction in the rental market, knowing it was a niche part of the development market at that time," said Oren. "We look back on the buildings that we built and sold and think, ‘Gee, it would have been nicer to hang onto these high-quality assets’. We felt that if were building these high-quality assets, we should be the ones to manage them to the same level.”

Holt Meadow Group is a full-service property management company. They oversee a wide range of areas for clients, including property management, asset management, leasing, sale, and re-financing. They believe in positioning the company as a partner to the asset owner.

Holt Meadow Group takes a forward-thinking approach to meeting the needs of tenants and creating value for asset owners. This includes providing concierge services to identify personalized solutions to address individual tenant requirements, conducting regular property inspections, and making continuous enhancements to their properties.

“Holt Meadow Group looks forward to our greatest accomplishment,” said Oren. “Every major step in our development of this company will be the greatest, until the next milestone is hit.”

Holt Meadow Group has a foundation in property development. Combined with their experience in property management, they believe they have a different perspective on buildings than other companies. Because they’ve built the assets they manage, they have a solid understanding of how they work. They also want to introduce

20 | December/January 2024

“On top of everything else, we feel we are bringing a precision, expertise, and overall assertiveness that will put us over the top in the industry,” said Oren.

Growing the business

“Your employees are the backbone of the company,” said Oren. “No matter how many clients you get, if your team isn’t strong enough, there won’t be success.”

The company’s initial hire was Daniela Douglas, who is highly regarded by her peers. She is a certified property manager, accredited member of the Institute of Housing Management, and has completed the Leadership Program, mentoring a number of property managers. She has managed billions of dollars’ worth of real estate for two of Canada’s largest landlords, and has accumulated more than 20 years of experience in the property management field. She has learned how private investors, institutional investors, and publicly traded organizations set their financial goals. She has also developed a strong financial acumen with a keen eye on expense savings and creating additional revenue streams.

“Throughout her career, Daniela has built highly engaged and motivated teams that deliver exceptional results, handled multiple crisis and media situations, outsourced ancillary revenue contracts with a projected revenue range from $200,000 to $500,000 per contract term,” said Oren. “She has participated in creating training manuals that were used to develop national training programs while also becoming a member of newly formed committees to amend the existing legislation pertaining to electrical maintenance in the residential sector. It is likely that when you speak to a property manager on a high-quality building in Toronto, they were mentored by Daniela Douglas.”

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Holt Meadow Group has made the decision to focus on property management within the realm of real estate investment. The company has been able to demonstrate their value by providing exceptional property management services.

Their services include comprehensive property assessments, tenant relationship management, financial acumen, proactive maintenance, and the incorporation of technology.

"We not only enhanced property values but also improved tenant satisfaction, reduced operational costs, optimized property operations, and mitigated risks for property owners," said Oren.

efficiency and a modern corporate approach, as well as all the employees that help us meet these goals, that motivate me to push this forward.”

Over the short term, Holt Meadow Group markets heavily to developers, existing landowners, and current building owners. Development is a longterm play, and they feel they can help position other developers with their needs at an early stage. They aim to offer an innovative approach to management, allowing the value created to speak for itself.

“In terms of long-term goals, our hope is that the name Holt Meadow Group becomes synonymous with high quality real estate management and consultation,” said Oren. “We want to be the first company people think about when they are considering to own or operate their rental portfolio. We want our name to be linked with trust, honesty, integrity, precision, and hard work.”

Business philosophy Holt Meadow Group also provides real estate consulting services. They connect with asset owners during the early stages of development, at the onset of an acquisition or when the client needs help determining where the pain points are in their current assets. As more developers look at purpose-built rentals as an option for their pipelines, and more property owners seek creative approaches to managing their assets, Holt Meadow Group believes they can provide a fresh perspective to creating value in this space.

“Having a property manager with a clear and effective understanding of new buildings, from a leasing, operations, and building systems point of view, is essential in ensuring the project is well programmed to meet the needs of new renters,” said Oren. “The need for overly amenitized communities, as well as creating a sense of belonging amongst the residents, is essential from the start. Holt Meadow brings that value from an early stage.”

In terms of existing product, Holt Meadow Group takes a similar approach on the new construction side. The company looks at things with an eye for innovation and employment of new proptech.

They have been able to see significant reductions in costs on an annual basis from realizing these measures. Holt Meadow Group has also been able to rely on their experience of reducing operational costs on the new build side.

“As the rental market changes, we feel there is a new watermark set for customer service from the asset owners all the way to the tenants,” said Oren. “Building a new business that follows the main tenets of community, customer service,

22 | December/January 2024

Holt Meadow Group’s company slogan is “Where tradition meets innovation.” Their leadership recognizes the value of tradition, as their foundation is based on decades of experience in the rental housing industry. At the same time, the company embraces a cutting-edge approach and forward-thinking ideas in how they do business.

“We constantly look for ways to implement technologies that can improve our operations and provide a better living experience for tenants,” said Oren. “We focus on placing the individual experience at the forefront of our strategies, which is how it has always been.”

One of the company’s goals involves applying as many property-related technology methods as possible. For example, they use smart lock and other smart property devices to perform inspections, which includes the common areas and in-suite. They also automate and digitize all of their forms. Examples include heat monitoring, geothermal integration, smart locks, smart parcel lockers, and virtual concierge.

Another focus is the connectivity of tenants to management. Incorporating QR code technology to create a seamless and automated communication line assists in ensuring all property-related requests are heard quickly and acted on even quicker. Holt Meadow Group plans to stay and remain ahead of the curve on property technology incorporation.

“Residential real estate in the U.S. and Europe is miles ahead of Canada on this front because renting is such a norm, so there is an expectation among their tenants and customers,” said Oren.

“Canada, and specifically Ontario in this case, is heading in that direction, and we feel now is the time to commit firmly to that early integration.”

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The challenge of converting office space into housing

By David Gargaro

Major Canadian cities are facing a dual economic challenge: a shortage of affordable housing and an increase in office building vacancies. There is not enough rental housing stock, and no way to quickly build inventory, to keep up with demand. The growing work-from-home movement means there is no foreseeable end in sight to underoccupied office buildings, resulting in lost income for building owners and millions in office-backed loans at risk of going into default.

Some housing experts have proposed a solution to address both problems: convert underperforming and vacant office buildings into multi-family residential properties.

Adaptive reuse of office buildings would create cash flow for property owners and address the housing shortage. However, this is much easier said than done.

Conversion costs Building a new condominium or purpose-built rental property involves relatively set costs.

Barring unforeseen circumstances or unexpected increases in expenses, the developer knows what it will cost to build. While development costs vary across Canada, it can cost $250 to $400 per square foot to build a new multi-family residential property. However, construction costs are always increasing and high interest rates make it difficult to budget accordingly.

An office building conversion involves significant changes to the infrastructure. Adaptive reuse of office towers will have both expected and unexpected costs. You don’t know what’s behind the walls until they’re demolished. Expenses can quickly add up and make the project financially unviable based on initial projections. Some experts believe once an office conversion passes $200 to $300 per square foot, it stops making financial sense as an affordable rental property.

Conversion costs can easily exceed $400 per square foot, which can negatively impact return on investment and strain finances. The developer will have to increase the per-unit purchase cost or rental rate to cover these higher costs.

If the building owner has a mortgage on the office tower, they will have to consider whether

24 | December/January 2024

it is financially viable to reinvest in conversion.

A buyer would have to weigh the cost of the purchase against return on investment. They might be able to take advantage of financial incentives for improving the building’s environmental footprint and energy performance, but the circumstances have to be ideal.

Obstacles to adaptive reuse Many factors besides building age and floor plate size help to determine the feasibility of converting office buildings. Some determinants include costs, location, specific building elements, and neighbourhood amenities. These factors significantly reduce the number of office buildings that would be eligible or desirable for conversion.

"In Calgary, there were 82 buildings consisting of 22 million square feet built between 1975 and 1985. This was such an intense building spree that underwriting these buildings today for conversion purposes requires specific attention on building systems and structural capacity. Some of these buildings were built too quickly and often to minimum standards. In one building, the floors were uneven and the window sizes were not ideal, so it made more sense to tear it down,” said Walsh Mannas, Principal, Avison Young.

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Although work-from-home is likely here to stay, it does not mean all offices will eventually be empty.

Some buildings have vacancy rates below 50 per cent, but others are nearly full. Even if a building is ideal for conversion, you will have to negotiate the conclusion of leases. Class A buildings are still in higher demand and have lower vacancy rates than Class B and Class C buildings. Many businesses want people to be on-site. Vacancy rates fluctuate over time, as do different work-related trends (e.g., open plan vs. closed office, shared desks vs. dedicated spaces).

Figure 1: Downtown Toronto - total availability 30.0%

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Trophy

Location and zoning

Building design and features

You can’t change where a building is located.

Many office buildings within the downtown core are found in clusters. They were not designed to cater to residents’ needs. Office tower neighbourhoods tend to lack certain amenities, like schools, parks, community centres, entertainment, and shopping. To draw potential homeowners or tenants, you would need to redevelop the surrounding area to provide desirable amenities, which is a significant, longterm undertaking. However, this provides an opportunity to create a vibrant, multi-purpose community within the downtown core.

Zoning laws are also an issue. In most provinces, you can’t simply convert a commercial property into a residential property if it has strictly commercial zoning. As per municipal rules, zoning would have to change. Some cities’ policies regarding office stock replacement create barriers to converting office buildings for residential use.

Different levels of government can simplify the process of converting office towers into residential properties, and there seems to be support from different municipal governments to do so. But it will take time to change the zoning of a building or neighbourhood to support adaptive reuse.

“In addition to local zoning requirements, the building must satisfy land use restrictions, setback requirements, and other restrictions,” said Greg Devine, Director, Business Development & Marketing – Egis, formerly McIntosh Perry. “You also need to plan for adequate parking and accessibility, as there will be a new use for the building and expected occupancy.”

Purpose-built office buildings tend to have different floor plans and layouts than apartment buildings. While a large floor plate means more space for housing units, it can also make it more challenging to undergo adaptive reuse. Residential buildings require more interior walls to separate individual units, as well as their own kitchens and bathrooms. And since you’re working with a fixed floor plate, you are limited in the size and layout of individual units.

Office and residential buildings have different mechanical, electrical, and plumbing requirements, loading and parking setups, window-to-wall ratios, and building envelopes.

Almost every element in an office building will require architectural and engineering redesign.

The building will need a thorough structural assessment of the existing frame to determine whether it could support the proposed changes.

Walls, roofs, windows, doors, and foundations must be changed to support the conversion to a residential property. The plumbing infrastructure, including water supply, drainage system, and plumbing fixtures, will likely require upgrading.

HVAC systems will need to be upgraded or replaced to meet current energy codes, as well as address air quality and ventilation requirements to fit the change in occupancy and use.

“Mechanical and electrical systems are very important,” said Mannas. “Ideally, an older building will have been upgraded at some point.

Electrical systems will need to be assessed to ensure they can handle the new power demands.”

26 | December/January 2024

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Some office buildings are ripe for conversion for residential use. For example, owners of older properties can apply for government incentives to fund energy-efficient upgrades. Some Class C buildings, which would have low ceilings when used as an office, can create desirable 11-foot-high ceilings when ducts and lighting are removed.

What about tearing it down?

Demolishing an office building and replacing it with a residential development is an option, particularly for older properties. In some cases, it would cost less to build from scratch. However, conversion takes less time than demolishing an existing office tower and developing a new residential property.

Also, demolition is not always the solution.

Building owners are often reluctant to lose the sunk costs from demolishing an office tower, and might want to lower rents, find new tenants or adapt it for other uses. For example, it might make more sense to convert office space to storage units or education use. Plus, new construction has a high environmental cost, as concrete work is a carbon-intensive process.

“Both new construction and adaptive reuse of existing properties will require excess soils management,” said Devine. “Soil that has been dug up must be moved on-site because it can’t or won’t be reused at the site. Some projects require additional planning requirements or registration on the RPRA soils registry.”

What are the numbers?

According to CBRE Canada, as of the third quarter of 2023, Canada’s national office vacancy rate is 18.2 per cent. Rates are steady in most major downtown cores. Office vacancy rates in major Canadian cities range from 30.9 per cent in Calgary down to 11.8 per cent in Vancouver (Toronto is in the middle at 15.8 per cent).

Avison Young research completed in Spring 2023 found that 34 per cent of office buildings in 14 major North American markets have potential for conversion. Up to 9,000 office buildings could be converted for residential use, including about

28 | December/January 2024

923 in Toronto, 611 in Montreal, 548 in Metro Vancouver, and 521 in Calgary.

The study used two key criteria to identify buildings for long-term conversion: they were built prior to 1990 and had floor plates below 15,000 square feet. Since the beginning of 2022, 33 office buildings across Canada have been removed from inventory, with most converted for residential use, as per CBRE. Calgary has had success in office-to-residential conversions due to its Downtown Calgary Development Incentive Program, which provides up to $75 per square foot in financial incentives.

To date, there are 17 projects either completed or scheduled, creating more than 2,300 new homes for residents in downtown Calgary. Two of those projects are the Dominion Centre (Alston Properties, 132 homes) and Palliser One (Aspen Properties, 219 homes), both of which include affordable housing.

Ottawa has also had successful office-toresidential conversions. The City’s Planning Committee approved a set of recommendations to facilitate office-to-residential conversions to revitalize underused office building space, including waiving the planning application fee.

CLV Development Inc. and InterRent recently converted a former federal office building (now called the Slayte) into a 158-unit rental property.

The conversion took two years, as well as 18 months of planning.

Conclusion Adaptive reuse of underused office buildings can address both the housing crisis and low office vacancy rates. However, it’s easier said than done.

There is a lot of red tape to cut through at different levels of government. Removing these barriers and providing financial incentives to developers will help to create more housing. So will the federal government’s removal of the GST on rental buildings, provided it includes conversions.

Office-to-residential conversion can help to address the affordable housing shortage, but it will require creativity, collaboration, and resources from all interested parties.

International students and the housing crisis

By David Gargaro

According to Sean Fraser, Canada’s Minister of Housing, Infrastructure and Communities, the federal government should re-examine its immigration policies due to the impact on the growing housing crisis. In an interview with Global News, Fraser said, “We do need to continue to look at reforms to our temporary residency programs. We’ve seen a significant increase in the numbers of the international student program and the temporary foreign worker program in recent years.”

And yet it was Fraser, when he was the Minister of Immigration, Refugees and Citizenship, who oversaw a system that allowed the number of international students entering the country to increase from 350,000 in 2015 to 900,000 in 2023. He was also responsible for plans to increase Canada’s annual target for permanent residents to 500,000 per year. This number is higher than it has been in more than 100 years. So, the federal government (including Fraser) has created the problem that they are now trying to solve.

Internal disagreement on government policies The federal government is now examining its approach to immigration in an effort to address the housing crisis. The current immigration minister, Marc Miller, stated the rising number of international students may be contributing to the housing crunch. While immigrants are not solely to blame for the lack of affordable housing, the volume of immigration (including international students) affects the amount of housing available.

Failing to increase the housing supply, as well as the necessary infrastructures, to support the high number of international students will continue to strain resources and increase housing prices.

There is a disconnect between the federal and provincial governments with respect to international students. The federal government is responsible for issuing study permits, so they control how many international students can come to Canada. However, education is a provincial power, and the provinces determine how many students they can accommodate.

30 | December/January 2024

Canada has long depended on international students and temporary workers to help boost the economy and fill job vacancies. According to the federal government, international students contribute more than $22.3 billion to the Canadian economy every year. They are a source of talent that can support economic growth and offset our aging demographic. But bringing in more students does not necessarily increase the quality of the workforce. Canada can achieve its economic goals by reducing the number of international students to more manageable levels and focusing on people whose skills sets meet the country’s more immediate needs.

Colleges benefit but not students Colleges and universities across Canada (especially Ontario) do not want a cap on the number of international students for financial reasons. They pay much higher tuition rates than Canadian students – sometimes three to fives

times more. More international students means more revenues for colleges and universities. It does not help that private colleges and “diploma mills” are taking advantage of the system and international students. Decreasing the number of international students will solve that problem.

There are more and more stories of international students sleeping in tents, in vehicles, under bridges, and on the street because they cannot find affordable housing. Some students are sharing accommodations with eight to ten people in rooms or units designed to house only two or three people at most. They are already spending more on tuition and cannot afford market rents – even when it’s available. Now they are being victimized through price gouging, illegal living conditions, invasion of privacy, and worse.

Not enough housing for all Colleges and universities recognize there is not enough housing to accommodate the high volume of international students. You cannot add 900,000 new students each year and expect postsecondary institutions to be able to house them.

Some universities have added new residences to handle the influx of international students, but they require support to build more units or have access to more housing options off-campus. They cannot meet the housing demand created by international students on their own.

Again, it must be restated: there is not enough housing being built to meet the needs of 900,000 new international students, as well as Canadians who currently need housing. Canada’s population has outpaced the rate of homebuilding. According to Statistics Canada, fewer homes were built in 2022 (219,942) than were built in 1972 (232,227). It is estimated that we will need another 3.5 million homes by 2030 for the housing supply to meet demand. At the current rate, we will fall dreadfully short.

Conclusion The federal government has created a problem that it understands it must correct. We are allowing more international students to enter Canada than we can handle given the current housing shortage. The federal government is finally taking action: as of January 22, they have imposed a two-year cap on international student undergraduate study permits. International students are not to blame for the lack of affordable housing, but the volume of immigration is making the situation worse. Unless the federal government also devises a way to rapidly increase the number of housing units, then the affordable housing shortage will get much worse before it gets better.

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Rental Development Over 200 Units

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Environmental Excellence

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CONGRATULATIONS TO THE WINNERS

OF THE 2023 FRPO MAC AWARDS The MAC Awards recognizes innovation and leadership in Ontario’s vibrant rental housing industry.

Each year, our members demonstrate their commitment to high levels of service and rental accommodations.

We are inspired by your efforts and can’t wait to see what the industry accomplishes in 2024.

Property Manager of the Year

Leasing Manager of the Year

Ben Antwi

Diane Murray

Resident Manager of the Year

Customer Service Award of Excellence

Anna Ciulli

Community Service Award of Excellence - Supplier Member

Community Service Award of Excellence - Rental Housing Provider

Company Culture Award of Excellence

ImpactAward BGC Ottawa Partnership

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DECEMBER/JANUARY 2024

Happy new year from the CFAA!

By Tony Irwin, Interim President, CFAA

On behalf of the CFAA Board of Directors, I extend warm greetings and best wishes for a successful year ahead.

CFAA is gearing up for an exciting year filled with new developments on many fronts. Over the past six months, we’ve implemented operational adjustments culminating in a management contract with FRPO on an interim basis. I am delighted to share some fantastic news about key additions to our team: • Laurie Cooper joins us in Finance & Accounting • Lynzi Michal takes on the role of Membership & Sponsorship • Melanie David is providing administrative support In addition, we’re thrilled to announce that Details Events Coordination has been contracted to help organize our upcoming Rental Housing Conference. Crestview Strategy has also come on board to provide government relations advice and support.

CFAA Rental Housing Conference Save the date! Our Rental Housing Conference is scheduled for May 14 to 16 at the Hyatt Regency in downtown Toronto. Registration details will be provided soon. If you’re interested in sponsoring this event, please reach out to Lynzi Michal at lmichal@frpo.org.

We’ve formed a conference planning committee with representatives from across Canada and are actively seeking speakers and panelists for educational sessions.

Contact CFAA to access the speaker abstract application form.

Stay tuned for more details about this year’s conference as they become available.

Important update: CFAA Rental Housing Awards In a strategic move, the CFAA Rental Housing Awards will take a one-year hiatus as we concentrate our efforts on revamping the conference and other association activities. We appreciate your patience and support and look forward to bringing back these prestigious awards soon.

Government relations update A busy fall session of the House of Commons saw the speedy passage of C-56: An Act to amend the Excise Tax Act and the Competition Act. The Act includes the elimination of the GST from new rental housing projects that start construction between September 13, 2023 and the end of 2031 and are substantially completed before the end of 2036. CFAA has advocated for this policy change for many years.

rentalhousingbusiness.ca | 35

NATIONAL OUTLOOK While economic pressures continue to make new rental construction difficult, this is certainly welcome news. Now that the Bill has completed the legislative process, CFAA will participate in the regulatory development process that will further define the mechanics of this policy change.

The Standing Committee on Human Resources, Skills, and Social Development and the Status of Persons with Disabilities (HUMA) released its report on the Financialization of Housing. The study, which was undertaken in Spring 2023, included the participation of CFAA and several CFAA members through written submissions and appearances before the Committee. We are pleased that the report was largely more positive than initially anticipated, and did not include any recommendations aimed at addressing the socalled financialization of purpose-built rental housing.

Key themes of the report included: • Affordable housing preservation and expansion: Several recommendations focus on preserving and expanding affordable housing stock. This includes the development of an acquisition fund for non-profit and cooperative housing organizations, increasing capital funding for non-profit and public housing providers, and enhancing affordability requirements for funding through National Housing Strategy programs.

• Taxation and real estate investment: There is a theme related to taxation, particularly in Recommendation 4, which suggests examining the tax treatment of real estate investment trusts (REITs) and designing tax options to encourage the creation of new affordable housing units.

• Private sector and non-profit investment: Recommendations 5 and 6 emphasize the need to incentivize private sector and non-profit investment in affordable rental housing through tax measures and tenant support resources.

• Tenant support and affordability: Recommendations 6 and 7 include measures to address tenant support, eviction, and affordability matters in the private rental housing market.

• Beneficial ownership and transparency: Recommendation 8 highlights the importance of strengthening reporting requirements for beneficial ownership of property and implementing a publicly available beneficial ownership registry to enhance transparency in property ownership.

These recommendations collectively aim to address various aspects of Canada’s housing challenges, including affordability, taxation, investment, and support for both tenants and housing providers.

Empire Club hosts discussion with Federal Housing Minister Sean Fraser On January 17, the Empire Club of Canada held a luncheon discussion on the topic “Solving the Housing Crisis” with Federal Housing Minister Sean Fraser. The event, sponsored by CFAA, covered the development of smart policies, direct strategic investments, and implementing innovative solutions to solve Canada’s national housing crisis.

In his role as Federal Housing Minister, Fraser has been working with municipalities and provincial governments to provide housing for Canadians.

He stated that municipalities would not succeed with applications to the federal Housing Accelerator Fund unless they were willing to be more flexible on zoning rules. Fraser stated that cities’ willingness to adopt zoning reforms has been integral to successfully signing deals with Ottawa. Competition for funding has encouraged municipalities to be more open to reform. According to Fraser, the federal government has received around 540 applications for the fund; however, only about 150 may be successful.

Minister Sean Fraser “The reality is there’s not a city who signed a deal with us who hasn’t more or less ended exclusionary zoning in Canada,” said Fraser. “Cities should know that if you’re not willing to be amongst the most ambitious cities in the country when it comes to zoning reform permitting processes, you won’t be successful.”

Getting rid of exclusionary zoning is one of the best ways to see success in funding applications. This includes getting rid of low-density zoning and regulations that exclude affordable and social housing in residential areas. Allowing mixed-use development and high-density residential within the urban core and transit corridors will help to get funding for these types of developments.

rentalhousingbusiness.ca | 37

DECEMBER/JANUARY 2024 Eliminating the GST from new purpose-built rental construction will help to get some projects approved and built more quickly. Funding through the Housing Accelerator Fund will help with cutting red tape and eliminating delays in the development approval process. Innovation and collaboration are both critical to building more housing.

Tony Irwin and CFAA have met with Minister Fraser, as well as other government officials, to ensure all parties understand that the current housing affordability challenge is fundamentally a supply problem.

Purpose-built rental housing providers play a critical role in working together with all levels of government to bridge the gap.

For example, FRPO recently launched a campaign called ‘Say Yes’. The campaign is all about saying ‘Yes’ to more housing in Ontario. This means more rental options, more affordability, and more vibrant communities because everyone deserves a home that’s affordable, accessible, and part of a thriving community.

“We believe the right policy approach is to tackle this challenge and should focus on encouraging more public and private investment of new rental projects across the country,” said Irwin.

As Minister Fraser has pointed out, there is no single solution to fixing either the housing affordability or availability crisis that is impacting millions of Canadians. CFAA, which sponsored this event and consistently advocates for strong and stable rental housing, is committed to working hand in hand with the federal government to make sure everyone has a place to call home.

City of Kingston considering rental licensing program On December 20, 2022, Kingston City Council passed a motion that instructed City staff to write a report to examine the implementation of a pilot Residential Rental Licensing Program (RRLP). This report would also look at other potential regulatory options. The pilot RRLP would apply to properties with one to three residential rental units in the Sydenham and Kingscourt-Rideau districts. The two districts are described as having “a high density of rental properties.” If the program is approved, it would require rental properties with one to three units to meet certain health and safety standards.

Some councillors, including Sydenham District Councillor Conny Glenn who brought forward the original motion, wanted to implement the RRLP to ensure the health and safety of the rental units. The councillors felt regulation of smaller rental properties would be required due to the provincial government’s removal of site plan agreement requirements for developments with less than 10 units as per the More Homes Built Faster Act. Other councillors were opposed to expanded rental licensing, as they felt it would create more rules in the already highly regulated rental housing industry.

City staff were expected to provide a report to the Administrative Policies Committee in the fourth quarter of 2023. To gather more information, the City of Kingston sent out a survey to obtain feedback from residents, including tenants, landlords, property managers, and community members, on concerns with the aforementioned residential units, as well as on the potential benefits and limitations of the RRLP. The survey closed on December 21, 2023, and the results are being compiled and added to the report.

38 | December/January 2024

NATIONAL OUTLOOK The City of Kingston’s Administrative Policies Committee will be reviewing the proposed RRLP on January 24, 2024. The Kingston Rental Property Owners Association (KRPOA) has registered as a delegate for the meeting. CFAA, FRPO, and EOLO have been working with KRPOA in its discussions with the City on the rental licensing issue. They have also helped KRPOA to put together a submission for the meeting.

Executive summary of KRPOA's submission There is broad agreement among all housing stakeholders that there is a housing crisis across Canada.

The main housing problems are lack of supply and affordability. Lack of repair is a problem affecting far fewer renter households than lack of affordability.

In almost all cases, only a relatively small portion of the rent paid for a rental home ends up as return on investment. The bulk of rent money goes to pay for the costs of owning and operating rental homes, including property taxes, utilities, other operating costs, financing and major repairs. If adopted, the costs of landlord licensing or regulation will inevitably increase landlord costs. Over time, an increase in landlord costs will tend to reduce rental supply and to raise rents.

The three main goals for a Residential Rental Licensing Program in Kingston are: 1 Identifying rental units 2 Verifying the safety of rental units 3 Gaining compliance KRPOA’s main submission on each goal is the following: 1 The City has the ability to create a listing of rental owners from its existing tax records. There is no need to create a rental registry to identify rental units. The tax record approach would save money and help keep rents affordable.

2 The safety and good repair of rental units is already protected by the Property Standards By-law and the work of the Kingston Fire Service. What is needed is not more paperwork, but rather a more coordinated and targeted approach to by-law enforcement and fire safety information.

3 Rather than bringing in new requirements (which include much documentation) to seek to gain improved compliance, the better approach is to enforce the existing property standards by-law through property inspections, communication with tenants and landlords, and if necessary, notices of violation, property standards orders, and ultimately, prosecutions. KRPOA offers specific suggestions to maximize the benefit achieved by more proactive by-law enforcement.

Even if it is free of municipal fees, residential rental licensing is not a cost-free solution because of the costs of complying with the bureaucratic requirements, both by landlords and the City. Substantial costs will be incurred which must be paid by someone, whether that be municipal ratepayers, landlords or tenants. It is impossible to force landlords to absorb all the costs imposed and created by landlord licensing or registration.

Table 1 shows the impact of the costs of requiring inspection certificates, based on a unit rent of $1,500 per month, and an annual return on investment of 8 per cent of rent. The possible costs are based on a requirement for inspection certificates, but internal costs of a similar amount could also be driven by other application or reporting requirements, other than a very light touch approach (such as just reporting contact information and number of units).

Table 1: Sample impact of licensing costs or fee on annual return on investment Annual regulation costs

If cost is per unit % of annual rent

If cost is per building for a 2-unit building % of annual return on investment

% of annual rent

% of annual return on investment

$400

2.2%

27.8%

1.1%

13.9%

$600

3.3%

41.7%

1.7%

20.8%

$1,000

5.6%

69.4%

2.8%

34.7%

$1,500

8.3%

104.2%

4.2%

52.1%

rentalhousingbusiness.ca | 39

DECEMBER/JANUARY 2024 The figures show that the potential costs of landlord licensing or registration are not trivial when compared with the normal rate of return on investment achieved after the other costs of owning and operating rental housing are paid. Even low-end licensing costs could reduce landlord returns by 14 to 42 per cent (or say 25 per cent to have a single figure to work with).

Even modest registration requirements would have a significant effect on landlords’ return on investment.

As shown on Figure 1, even fairly low-end licensing costs could reduce landlord returns by 2 cents out of every dollar of rent (25 per cent of the current return on investment), leaving only 6 cents of return instead of 8 cents. As a result, landlord licensing or registration would inevitably worsen rental housing affordability, which is a much more widespread problem than any need for more repairs.

Figure 1: Where a dollar of rent would go with rental licensing or registration

Landlord licensing or registration is a net negative for the overall well-being of tenants. There are more effective and less costly ways to achieve the City’s goals, with fewer negative consequences to tenants, landlords and ratepayers. KRPOA urges Kingston City Council to reject the rental licensing and registration options available to it.

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 CFAA’s e-Newsletter today!

40 | December/January 2024

rentalhousingbusiness.ca | 40

NATIONAL OUTLOOK Looking ahead to 2024 – Important events and notable themes March 5, 2024 CMHC Rental Market Survey Breakfast: CMHC shares their key findings from its October 2023 Rental Market Survey for the Greater Toronto Area. Trends in other major Ontario centres will also be discussed.

The presentation will conclude with an outlook of where rental markets are headed in 2024 and beyond.

This event will take place in-person at Parkview Manor and is open to FRPO and GTAA members.

March 18 – 19, 2024​ 2024 CMHC National Housing Conference: The conference will be a platform to discuss and share emerging ideas and best practices, explore new technologies, and drive actionable outcomes to Canada’s housing challenges. ​ April 2024​ Budget 2024: Anticipated to be tabled during the third week of April, this Budget is expected to contain significant measures to address both affordability and the housing crisis and will be a sign of the Liberal government’s election priorities.

Spring Lobby Days: On the heels of Budget 2024, CFAA and Crestview Strategy will undertake a full engagement plan that supports the broader advocacy goals of CFAA.

UTILE Announces Two New Appointments Laurent Levesque, Co-Founder and CEO of Unité de travail pour l’implantation de logement étudiant (UTILE), is proud to announce the appointment of Isabelle Thérien as Director of Investment and Major Partnerships. Isabelle brings with her considerable experience in financing and developing large-scale real estate portfolios, gained from her previous positions at the Office Municipal d’Habitation de Montréal (OMHM) and the Canada Mortgage and Housing Corporation (CMHC).

UTILE also announced the appointment of Stanislas Malecki as Vice-President of Real Estate and Operations. As an executive with over 30 years of experience in companies with extensive operations across Canada, Stanislas has been using his vast expertise in real estate to support UTILE’s growth and development since joining the enterprise in 2022.

These appointments are being made as UTILE works to expand its non-profit student housing model across Quebec.

L'Unité de travail pour l'implantation de logement étudiant (UTILE) is the only social economy enterprise that specializes in student housing across Quebec.

utile.org · info@utile.org

rentalhousingbusiness.ca | 41

BUY WHERE THE BUILDERS BUY

and more Michael Gnat 416-635-4835 mgnat@midnorthern.com

45 Red Maple Rd Richmond Hill, ON L4B 4M6 www.midnorthern.com

President’s message

– Looking forward to a new year Happy new year to all FRPO members. With the arrival of a new year comes hope for change and improvement in the rental housing industry. I’m looking forward to another year of representing our membership and helping to drive the industry forward.

If you missed the announcement, on December 21, Mayor Olivia Chow, along with Prime Minister Justin Trudeau, Deputy Prime Minister Chrystia Freeland, and Minister of Housing, Infrastructure and Communities Sean Fraser, announced $471 million in additional federal funding for housing for the City of Toronto. The funds, which will come through the Housing Accelerator Fund (HAF), are designed to help build an additional 11,780 homes in Toronto on top of what has already been projected for the next three years. The funding will accelerate City of Toronto efforts to make a generational transformation of Toronto’s housing system and increase housing affordability for residents.

This financial support will enable the City of Toronto to increase the supply of new rental homes, protect existing rental homes and people who rent, and revitalize neighbourhoods across Toronto. It will also help the City to speed up the review and approval of new homes through streamlining processes and introducing new technology.

We support all levels of government in helping to build more homes in cities where there is a shortage of affordable housing. In addition to scaling up new housing supply, the HAF investments will enable the City of Toronto to expand the Multi-Unit Residential Acquisition (MURA) program. This program has supported the not-for-profit housing sector with acquiring and converting market rental properties into affordable rental homes for lower- and moderate-income residents. Removing barriers to development and simplifying the land approvals process will also help developers to bring more purpose-built rentals to market faster, which is what everyone wants.

I hope the new year brings you the happiness you seek in your personal and professional lives. If you’d like to refresh your knowledge on matters related to rental housing, or have some ideas for future seminars, please don’t hesitate to reach out. We look forward to hearing from you.

Tony Irwin, President and CEO, FRPO, and Interim President, CFAA rentalhousingbusiness.ca | 43

Let’s Build Ontario: The latest advances in Ontario’s rental housing campaign As Ontario continues to grapple with the intricacies of its housing crisis, the collaborative and sustained efforts of FRPO and the Let’s Build Ontario campaign remain pivotal in promoting the supply of rental housing. Our persistent advocacy through strategic communications and alliances is making headway in reshaping the rental housing landscape. It is due in no small part to the efforts of Let’s Build Ontario that the debate has shifted to one that sees more housing supply as critical to solving the housing crisis.

Persistent presence on social media Our dedicated commitment to fostering the growth of rental housing is echoed across all social media platforms. By maintaining a robust online presence, Let’s Build Ontario ensures the message of increasing rental housing supply gains traction and reaches a broad audience. Through a series of coordinated posts, infographics, and insightful discussions, we are steering the conversation toward actionable outcomes and long-term solutions.

Spotlight on leadership FRPO’s President & CEO Tony Irwin recently illuminated the nuances of the rental housing sector on the CBC, articulating the challenges and talking about solutions. Our campaign strategically amplified this appearance, leveraging the platform’s reach to heighten public and stakeholder awareness of the sector’s importance.

Simultaneously, an insightful op-ed by Asquith Allen, FRPO’s Director of Policy and Regulatory Affairs, received promotion across social media channels. Asquith’s expertise and articulate advocacy of property tax reform in the City of Toronto underscores the campaign’s reasoned approach to policy development and regulatory reform.

Expanding excellence The Canadian Certified Rental Building Program (CRBP) reaches new horizons with its launches in Saskatchewan and Nova Scotia. By championing the CRBP, Let’s Build Ontario highlighted our commitment to quality, sustainability, and professionalism in rental housing. These achievements are a testament to the program’s integrity and FRPO’s relentless push for national standards. Plans are underway to expand the Canadian CRB Program to New Brunswick and Manitoba in 2024, so stay tuned!

Mobilizing support: The “Say Yes” campaign In a further step, we envisioned, planned, and are preparing the launch of the new “Say Yes”

44 | December/January 2024

digital mobilization campaign. This campaign will leverage the Let’s Build Ontario brand and previous work to enlist Ontarians in engaging with local elected officials and advocating for increased rental housing supply. This campaign is designed to empower residents to take a proactive stance, encouraging a dialogue that demands attention and action.

United voices for change Understanding the power of collective action, our outreach has extended to a diverse range of potential stakeholders, inviting them to join our cause. By assembling a coalition of voices from varied sectors, we aim to forge a unified front that underscores the universal necessity for more rental housing. This inclusivity enriches our campaign with a range of perspectives and amplifies our call for an upsurge in supply.

As we move forward, our endeavours continue to evolve with purpose. The Let’s Build Ontario campaign is steadfast in its objective: to ensure that rental housing remains a cornerstone of the housing market in Ontario. We are eager to welcome more voices and ideas to our growing alliance. To learn more, get involved, and lend your voice to this vital cause, visit the Let’s Build Ontario website at https://letsbuildontario.ca/.

Together, we are not just building rental housing— we are fostering communities and shaping the future of our province.

MAC Awards The annual MAC Awards Gala took place on Thursday, November 30, alongside the Building Show. For more than two decades, we have celebrated the hard work and dedication of leaders in Ontario’s rental housing industry. It was an incredibly success event, as more than 1,400 industry professionals, sponsors, suppliers, and others took part in celebrating excellence in the residential rental housing industry. The MAC Award goes to those individuals and companies that excel in leadership, innovation, and consistently elevate the standards in Ontario’s rental housing sector. The award signifies a dedication to exceptional service standards, offering choices for consumers, and fostering resilient communities.

2023 FRPO MAC Awards winners Social Media Excellence Tricon Residential Inc Best Suite Renovation Over $40,000 QuadReal 57 Charles Bay 57 Charles Street, Toronto

Best Suite Renovation Under $40,000 Dream 107 Redpath Avenue, Toronto

Property Manager of the Year Signet Group Ben Antwi

Best Advertising Campaign BGO The Junction, On Us!

Leasing Manager of the Year Park Property Management Diane Murray

Best Lobby Renovation Starlight Investments 2233-2235 Hurontario Street, Mississauga

Customer Service Award of Excellence Fitzrovia

Best Property Management Website Morguard www.thebayclub.ca Best Curb Appeal Starlight Investments 7170-7280 Darcel Avenue, Mississauga Best Amenity Space Renovation Rhapsody Property Management Services Trilogy on King 1100 King Street West, Toronto Best Amenities - New Development Fitzrovia The Parker 200 Redpath Avenue, Toronto Rental Development 200 Units or Less DBS Development 2Fifteen 215 Lonsdale Road, Toronto Rental Development Over 200 Units BGO The Campbell 299 Campbell Avenue Environmental Excellence Dream Resident Manager of the Year Greenwin Corp.

Anna Ciulli

Community Service Award of Excellence Supplier Member Wyse Meter Solutions Community Service Award of Excellence - Rental Housing Providers Greenwin Corp.

Impact Award Hazelview Properties BGC Ottawa Partnership Company Culture Award of Excellence Hazelview Properties Lifetime Achievement Award Williams & McDaniel Property Management Clark McDaniel

Upcoming events PM Springfest May 9, 2024 Metro Toronto Convention Centre This event is exclusively for property management professionals. Equip yourself with new information and technologies to better position and optimize your buildings as well as expand your professional network! PM Springfest brings together property management professionals to connect with leading suppliers, explore new innovations and learn from industry experts about latest regulatory, health, and life safety changes; efficient energy management strategies; retrofitting aging buildings; essential capital planning details; and much more. Find out more here.

Ontario’s Ontario’s leading leading advocate advocate for for quality quality rental rental housing housing

FRPO is the largest association in Ontario representing those who FRPO is the largest association in Ontario representing those who own, manage, build and finance residential rental properties. own, manage, build and finance residential rental properties.

For membership inquiries please contact Lynzi Michal, Director, For membership inquiries please contact Lynzi Michal, Director, Membership & Marketing Membership & Marketing Federation of Rental-housing Providers of Ontario Federation of Rental-housing Providers of Ontario 20 Upjohn Road, Suite 105 Toronto M3B 2V9 20 Upjohn Road, Suite 105 Toronto M3B 2V9 416-385-1100 x 22 416-385-1100 x 22 lmichal@frpo.org lmichal@frpo.org www.frpo.org www.frpo.org

rentalhousingbusiness.ca | 45

Yes, we can!

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

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

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

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

Hot Topics: EOLO announces the launch of Ottawa's new Property Standards Search Tool, and outlines its support for KRPOA's response to landlord licensing in Kingston. pg. 49 HDAA discusses the short-term rental bylaw, as well as updates on the renovictions and safe apartment buildings bylaws. pg. 53 LPMA explains how rent-to-own agreements require a higher level of trust from all parties, and discusses how preventative maintenance reduces landlords' liability. pg. 57 SKLA celebrates its 30th anniversary, announces a grant to develop and deliver a legal education program for rental housing providers, and discusses its advocacy efforts. pg. 61

The Member Associations

Affordable Housing Multi-Residential Program

Reduce capital upgrade costs Complimentary technical help and incentives up to $ 200,000* Heating season is around the corner. Make capital improvements now to help save energy and reduce operating costs. With the Affordable Housing Multi-Residential Program, you receive financial incentives up to $200,000 for boilers, energy-efficient technologies and energy assessments. Plus, free in-suite upgrades and expert assistance every step of the way.

Why upgrade now?

• Reduce energy, maintenance and operating costs.

• Control costs more effectively with automated systems.

• Improve energy efficiency and reduce emissions.

• Enhance resident comfort, health and well-being.

Is your building eligible?

This program is for: • Eligible market rate multiresidential buildings† • Shelters and co-ops • Social and municipal housing providers

Incentives for building upgrades and more: • Boilers • Building automation controls • Ventilation technologies

• Variable frequency drives • Water heaters • Energy assessments * HST is not applicable and will not be added to incentive payments.

Incentive offers are subject to change based on budget availability.

Offer available to qualified participants only. Contact your Energy Solutions Advisor to confirm eligibility. Terms and conditions apply.

Visit enbridgegas.com/affordable for details. † To determine if you qualify as a market-rate multi-residential housing provider, please reach out to energyservices@enbridge.com with your rent roll information. Additional terms and conditions may apply. © 2023 Enbridge Gas Inc. All rights reserved. ENB 1601 08/2023

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Chair’s message Happy New Year to all!

The EOLO leadership continues to address solid waste and organic recycling in multi-residential buildings, and to monitor the Vacant Unit Tax, with a view to finding an opportunity to eliminate it or to minimize its negative impacts. A new issue is the City’s up-coming review of its storm water charges.

EOLO will seek to put the current fair and positive treatment of multi-unit residential properties on a solid and permanent footing. Below are two articles related to landlord regulation, one in Ottawa and one for Kingston.

- John Dickie, Chair, Eastern Ontario Landlord Organization

New Ottawa Property Standards Search Tool Five years ago, the City of Ottawa considered enacting some form of licensing or registration for residential landlords. ACORN and some “progressive” Councillors pushed hard for it.

However, EOLO worked very hard to convince the City By-law Policy staff that such regulation was not the optimal way to proceed, and we were successful in avoiding any form of registration and any new system of City fees.

The City By-law staff did have certain concerns, but EOLO showed them those concerns could be better addressed by other means. The result was the Rental Housing Property Management By-law.

It requires an information letter for new tenants, and specific recordkeeping by landlords, most of which efficient landlords were doing anyway.

The City By-law staff are largely satisfied with the knowledge major rental providers have of the requirements and with our industry’s compliance.

However, the City is about to roll out the final feature of the new program, which is a searchable database to be known as the Property Standards Search Tool. EOLO sought to persuade the City staff that such a tool was not necessary, but they have insisted on bringing it forward. However, the City staff agreed that several of EOLO’s concerns are legitimate and have designed the new tool with those concerns in mind.

One key feature is the database will only record notices of violations, charges, and convictions under relevant by-laws, not tenant complaints that do not result in a notice of violation.

EOLO, rental providers, and the City by-law officers know that tenants too often complain

to By-law Services without having informed their landlord of the problem at the property.

That generally means the landlord is not at fault because they did not know of the issue and had no chance to address it. In most cases, By-law Services will inform a landlord of all the repair issues informally, and most landlords clear them up quickly. That is efficient for By-law Services, for landlords, and for tenants because it usually gets the repairs done more quickly and with less wasted effort than the notice of violation route.

Landlords who do the necessary repairs, in a timely manner through the informal system, will not appear in the Search Tool.

Besides pointing out that issue to By-law Services, EOLO also pointed out another issue. To protect tenant privacy, the Search Tool will report on civic building addresses, not identifying specific units within buildings. EOLO pointed out that comparing the results for buildings of three units with buildings of 300 units was potentially unfair.

Three violations at a three-unit building probably indicates a much more serious problem than three violations at a 300-unit building.

City staff agreed, and has spent time, effort, and money to obtain building information from the Municipal Property Assessment Corporation (MPAC) so the Search Tool can put buildings into different size brackets to provide a fair picture.

The exact unit count will not be disclosed, but the approximate size will be disclosed, along with a statement of the impact of different building sizes on how to interpret the results.

The City By-law staff have agreed to attend the upcoming EOLO Education and Networking Event

rentalhousingbusiness.ca | 49

on March 20 to explain the features of the new Search Tool, and take questions about it, property standards enforcement generally, and the Rental Housing Property Management By-law. The EOLO Board looks forward to a lively session, remembering the City staff have listened carefully to the concerns EOLO raised on behalf of landlords, and has addressed most of our concerns.

EOLO supports KRPOA in fighting landlord licensing As noted above, five years ago the City of Ottawa considered enacting some form of licensing or registration for residential landlords. Four years ago, the City of Kingston did too. At that time, Kingston City Council rejected the proposal because they did not like the effect a licensing program would have in increasing market rents.

However, there has been considerable change-over among the Councillors.

Kingston City Council is again considering a landlord licensing or registration program, this time potentially beginning with a pilot project in two of Kingston’s 12 wards, applying to buildings with one, two or three residential rental units.

EOLO is working with the Kingston Rental Property Owners Association (KRPOA), FRPO, and CFAA to oppose such a program.

Two major EOLO members own significant portfolios in Kingston, and numerous smaller EOLO members own investments there. EOLO is also concerned about the precedent Kingston’s adoption of a program could create.

Here are some of the points KRPOA is making to oppose landlord licensing in Kingston.

The nature of the current housing crisis There is broad agreement that there is a housing crisis across Canada. Housing supply, especially rental housing supply, has not kept up with the growth of housing demand.

The main housing problems are lack of supply and affordability.

Renters (or homeowners) are said to be in core housing need if their housing needs major repairs, is overcrowded, or costs them more than 30 per cent of their income (and adequate, suitable, and affordable housing is not available in the city in which they live). The need for repairs is a problem much less widespread than affordability. See Figure 1, which provides the most recent figures available.

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Figure 1: Core housing need by reason

Renter CHN by reason - Kingston 2016 5,400

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Of the 7,855 tenant households in core housing need in Kingston in 2016, 69 per cent suffered from only lack of affordability, while another 12 per cent suffered from lack of affordability and one of the other two problems. Only 12 per cent of those in core housing need suffered only from a lack of major repairs. They made up only 4.3 per cent of all tenants, or one out of 25. (In contrast, lack of affordability adversely affected one out of every four tenants.) A similar pattern applies in Ottawa.

Therefore, policy makers should be wary of solving the limited problem (the need for repairs) at the cost of worsening the predominant problem (affordability). The KRPOA submission argues that a licensing or registration program would have the effect of worsening affordability.

The impact of increased costs for landlords There is a common misconception that most of the rent flows directly into a landlord’s pockets as net income. However, that is far from correct. In fact, only a relatively small portion of most rents ends up as return on investment. See Figure 2.

Figure 2: Where a dollar of rent goes among small landlords property taxes Property taxes

$0.08

Electricity, electricity, heat & & water water

$0.11

$0.09

Insurance, insurance, day-to-day repairs & other repairs & other operating operating costs

$0.18

costs

Financing payments financing payments

$0.38

major repairs repairs & Major & modernization modernization

$0.16

Return on owner's owner's return on investment investment

Any municipal fees for landlord licensing or regulation will inevitably increase landlord costs.

Whether or not licensing or registration fees are imposed, the work involved to comply with landlord licensing or regulation will inevitably increase landlord costs and/or the negatives of rental operation. So will any requirement to provide inspection reports or certificates of compliance.

The landlord licensing programs in force in North Bay, Oshawa, and London result in costs of hundreds of dollars per year for each rental unit.

KRPOA has estimated that a similar program could easily cost 2 cents out of every dollar of rent. That would initially reduce the return on investment of a small Kingston rental property by 25 per cent! (Two cents doesn’t sound like much, but a decrease in the return from 8 cents to 6 cents per dollar of rent is 25 per cent.)

However, the impact would not stop there. Such a reduction in the return on rental properties would inevitably reduce rental supply from what it would otherwise be, and that would raise rents.

Conclusion KRPOA argues that landlord licensing or registration would inevitably worsen rental housing affordability, which is a much more widespread problem than the need for repairs.

EOLO agrees.

Landlord licensing can also easily lead to unnecessary enforcement, often including a need to end tenancies to perform major repairs. This would negatively affect specific tenants in the lowest quality rental homes, who are often the worst off of all tenants. EOLO agrees.

KRPOA submits that landlord licensing or registration is a net negative for the overall wellbeing of tenants. Besides that, there are more effective and less costly ways to achieve the City’s goals, with fewer negative consequences to tenants, landlords, and ratepayers. KRPOA urges Kingston City Council to reject rental licensing and registration.

When this went to print, it appeared that the next key decision by Kingston City Council would take place on January 24.

BECOME AN EOLO MEMBER NOW! EOLO invites Ottawa area landlords to join the organization.

Have your interests and concerns heard, and benefit from EOLO’s support. As an EOLO member, you will be able to: • Receive prompt emails of relevant City rule changes •

Attend two networking receptions a year

•

Attend two free education events a year

•

Receive all 6 annual issues of RHB Magazine with current developments, City and provincial funding programs, and landlord-tenant laws.

To apply for membership, go to www.eolo.ca, download the membership application form and send it to us at the contact info on that website.

rentalhousingbusiness.ca | 51

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PRESIDENT’S MESSAGE The HDAA sends our best wishes to everyone for the new year and hopes everyone has a restful holiday season. This past year has gone by quickly but has brought about a lot of change in the City of Hamilton. We were very happy to be able to have our regular schedule of events, including our first Trade Show and Golf Tournament since the pandemic, which were a great success. That excitement has been overshadowed by the many bylaws the City of Hamilton has been introducing that are directly aimed at the rental industry. We may see a new renovictions bylaw, short-term rental bylaw, adequate temperature bylaw, and safe apartment bylaw to name just a few. The association will have our work cut out for us in the new year, which will also see the end of the licensing pilot project that we suspect the City will try to bring in citywide.

-

Arun Pathak, President, HDAA

Short-term rental bylaw After a short pause due to “a council shift in priorities,” which included developing another bylaw to stop renovictions, Hamilton’s short-term bylaw will come into effect on January 1, 2024 with licence applications starting in December.

The bylaw will require all short-term rentals to be in the principal residence of the homeowner, although it will allow a homeowner to rent out a laneway residence or secondary dwelling unit and there will be no limitation on how many days a year someone can rent out space. Stays will be limited to short stays of no more than 28 consecutive nights. For those wishing to apply for a licence, the cost for an entire dwelling will be $875.81. A licence for a partial dwelling will cost $213.81 and renewals for each will cost less.

Commercial operators or corporations won’t be permitted to run short-term rentals. If they violate the bylaw, fines will be about $500 but may be increased to a maximum of $100,000.

According to data from the City, there were 1,250 active short-term listings in Hamilton last November with about 80 per cent being entire homes or apartments. Of the short-term listings identified, about half were owned by those trying to supplement their income or mortgage while the other half were corporations who are argued to commodify the market. The intention of the bylaw is to get more rental supply on the market and discourage people from buying properties for short-term rentals and commodifying the marketplace. As we have argued in the past with any new legislation, the more a municipality legislates the rental market, the less attractive it will be for investors to invest in that municipality.

On top of this, all these efforts are funded

directly by taxpayers who may not see any positive change and instead will see a waste of resources. The priority should be to encourage more investment in the rental market while also providing City housing for those of lower income. Resources should be spent on providing brick and mortar housing for those who need it or alternatively providing rent supplements to tenants to assist with affording accommodation and not on legislation that only hinders rental supply.

Update on renovictions bylaw and safe apartment buildings bylaw Hamilton’s renoviction bylaw, called the Renovation Licence and Relocation Listing bylaw, which would be the first of its kind in Ontario, will be going to council in January for its final verdict. It has now been deferred twice, providing more time for evaluation and enhanced tenant protections as well as allowing the City to seek legal advice and look at a list of budget items to create an inspection program. One challenge facing the City is making sure to create legally defensible rules for landlords while protecting tenants from eviction through renovation. The City acknowledges the bylaw is problematic since the legality could be challenged in accordance with provincial laws, particularly if the City denies issuance of such a licence to a landlord. As was the case with the New Westminster bylaw, the new bylaw would open the City to a legal challenge as the jurisdiction for these concerns lies with the provincial government.

If the bylaw comes into effect, landlords looking to evict tenants to complete renovations would

rentalhousingbusiness.ca | 53

have to first get a licence from the Cty. To get the licence, a landlord would need to provide proof from a professional engineer that the renovations are so extensive, tenants must leave their units for the work to be done. It may also include provisions requiring landlords to provide accommodations to their tenants while renovations are taking place. The HDAA will be fighting against the issuance of such a bylaw. Not only do we believe this should be in the hands of the provincial government, but the provincial government has already put in place ample protections against bad faith evictions that are very positive for tenants.

The City should not be meddling in provincial matters and should be using its resources to build brick and mortar housing for those in need.

The other bylaw expected to be back in front of council in January is the Safe Apartment Buildings bylaw, which will be similar to the initiatives in Toronto and Mississauga that call on inspectors to inspect and license landlords to ensure property standards are being met. This bylaw is not expected to be adopted until after the 2024 budget and would likely not start until 2025, as the City will need time to inspect all buildings, approximating about 50,000 households, which could take several years.

The City has already given final approval for a safe apartment buildings bylaw and now it is pending the budget review in January. The general intention of the bylaw is to encourage landlords to maintain their properties so renovictions aren’t necessary in the long term.

The bylaw will be mirrored after Toronto’s RentSafe program, which began in 2017, and would require landlords to register their building with the City and have plans in place for pest and waste management, cleaning, repairs, electrical maintenance, and vital service disruption, including power outages and water shutoffs.

Properties would be subject to regular City inspections and be scored on how well the building is maintained.

Past events

November 8, 2023 – Dinner Meeting

The HDAA held our last dinner meeting of the year on November 8 and it was an eventful evening. We wished Arun a happy retirement as he officially stepped down as president of the association. We truly thank Arun for his many years (close to two decades) with the association and the impact he has made within the association and the rental industry as a whole. We are happy that he will be staying on as past president to guide our new president as he transitions into the role.

At the dinner meeting, we were excited to officially announce our new president, Daniel Chin. Daniel is the owner of Chin Capital, Chin Properties, and Chin Property Advisors Brokerage, and a successful and active housing provider in Hamilton. We are very happy to have Daniel join us as the new president of the association and are looking forward to this new era for the association and are excited for what the future holds.

For the presentation portion of the evening, Daniel provided our membership with an update on the many new bylaws the City of Hamilton has been introducing, which includes the new renovictions bylaw, short-term rental bylaw, adequate temperature bylaw, and safe apartment bylaw. He also provided a quick update on the licensing pilot project. We are expecting that there will be a new update from the City soon; however, the last update proved to be less than favourable with extremely low application numbers.

The HDAA was then joined by Norm Schleehahn, Director of Economic Development with Invest Hamilton, to discuss economic updates in Hamilton and provide information on the latest developments in the City. A positive for the City is that it sits in the middle of Canada’s most densely populated and economically advanced region and has all the amenities that makes it ideal for businesses and workforces to locate and grow. With a growing population, reaching just under 600,000 residents, it is also at the centre of a catchment area of more than 4.8 million people extending from Toronto to Niagara and up to Kitchener and

54 | December/January 2024

Waterloo. This means Hamilton is not only well connected but also has access to a vast talent pool, which makes it a great place for businesses to invest.

This interest to invest was clearly seen in a new record this year in annual construction value.

Surpassing its 2021 record, Hamilton set a new record for highest annual construction value of over $2 billion. Industrial and commercial investment has also broken new records with a 53 per cent increase over the previous threeyear average to $645 million. Over the past few years, Hamilton has seen large investments by corporations including UPS, Continental, IKEA, Stryker, L3Harris, and Amazon. In 2023 alone, an additional 2.1 million square feet of business space was built. It is no wonder why Hamilton has been named one of Canada’s best investment locations

by Site Selection Magazine.

Including more than 2.8 million square feet of business space under development, Hamilton will also see a few transformational projects, which include expansions to GO Transit rail access, the Hamilton Light Rail Transit (LRT), a significant renovation to FirstOntario Centre to create an entertainment precinct, a film studio district at West Harbour, and the ever anticipated Pier 8 Development, which should see an addition of 1,300 residential units in Hamilton. There will also be a large redevelopment of industrial lands with

800 acres recently acquired by Slate from Stelco, with the intention of redeveloping the site into a world-class industrial park with the capacity to support 23,000 jobs in the GTHA. Lastly, in an effort to reduce its carbon input by approximately 3 million tonnes per year, Dofasco will be undergoing a decarbonization process that will be the equivalent of taking more than one million cars off the road.

On the housing front, the Hamilton downtown core will also see a transformation within the next decade with nearly 10,000 residential units under construction or in planning. It is safe to say that although the rental market sphere has been taking some hits, Hamilton has been making strides in its industrial and commercial investment. This is great news for Hamilton residents, not only in terms of economic prosperity but also in hopefully keeping our property taxes from increasing even more.

Upcoming events

January 10, 2024 – Dinner Meeting The HDAA will be holding our first dinner meeting of the new year on January 10. We are excited to be joined by Tony Irwin from FRPO, who will be discussing the latest updates in provincial legislation. We will also be joined by a fellow member to discuss his experience with property standards and winning a precedent-setting case.

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The future looks bright

PRESIDENT’S MESSAGE Celebrating community values As we approach the holiday season, let’s reflect on the values that bind us together and celebrate unity, kindness, and the spirit of giving. Remember those who are less fortunate and extend a hand to impact our communities positively.

We have achieved many constructive outcomes as an organization and I want to thank the board and committee members for their hard work. Looking ahead, we have some great events planned for 2024. On January 9, our first members meeting of the new year will focus on fire safety, security, and tackling Richie Anand homelessness. On February 13, Jay Stanford of the City of London will discuss the new green bin program at the Lunch and Learn event. On behalf of LPMA, I wish you a happy holiday season and a prosperous New Year. I’m looking forward to continuing our journey together in the spirit of shared goals and shared successes.

Warmest wishes,

- Richie Anand, President, LPMA

RENT-TO-OWN AGREEMENTS REQUIRE A HIGHER LEVEL OF TRUST FROM LANDLORDS, TENANTS With housing prices rising faster than wages, the dream of home ownership is slipping away from many young Canadians.

That’s where Rent. Save. Own. comes in, a program launched by Drewlo Holdings and its building arm, The Ironstone Building Company.

Jerry Drennan, chief operating officer for Drewlo Holdings, said tenants in good standing who rent from Drewlo can earn a $350 credit for every month they rent. A maximum of $10,000 is then put toward the purchase of a new home or townhome from Ironstone anywhere in London. Tenants start building credit and equity immediately.

“The $10,000 discount on the purchase of a new home is significant for them,” Drennan said. “If they were renting anywhere else, they’re not getting that credit. That much of their rent every month is going toward that purchase.”

Drennan acknowledges that Drewlo and Ironstone are in an ideal position to guide tenants to home ownership through renting.

A report by Nanos Research, released in October, showed that most residents of London and

St. Thomas have positive impressions of rent-toown housing as a solution to the housing crisis and would consider a rent-toown agreement.

Adam Miller, chair of the London and St. Thomas Association of Adam Miller Realtors (LSTAR), which commissioned the report, said it shows that area residents are concerned about housing affordability. Since 2021, home prices have increased substantially and rents have also risen due to the demand and competition among tenants.

Miller said he wasn’t surprised that residents feel positively about rent-to-own agreements since they offer a path to home ownership. Previously, rent-to-own was a “whisper campaign”.

“Not a lot of people were doing it and I don’t know if the impressions of rent-to-own were very positive at any point, as well, before now.”

rentalhousingbusiness.ca | 57

Before entering into a rent-to-own-agreement, landlords and tenants should obtain the right type of advice from a lawyer, realtor, and mortgage broker, said Tyler Hortie, a real estate lawyer based in Kitchener-Waterloo.

It’s also best for landlords to move ahead only with an established tenant who already has a track record of paying their bills and looking after the property.

“I think there is definitely a place for rent-to-own in the market and if it helps people buy the home that they’re in, then it’s a great opportunity, but it has to be done carefully,” Hortie said.

Tyler Hortie

He compares Drewlo’s rent-to-own arrangement to a customer loyalty program that nurtures the relationship between landlords and tenants.

“I think it’s an admirable program and it does help renters to own, but it’s different from what I would consider a more traditional rent-to-own model,” Hortie said.

In a traditional model, the tenant (buyer) and the landlord (seller) enter into a standard lease, which is subject to the Residential Tenancies Act, and an Option to Purchase Agreement or an Agreement of Purchase and Sale, or both. The tenant then moves into the home and makes payments for a fixed period of time, according to the terms and conditions the vendor specifies. For example, tenants might pay $1,600 for rent and $400 as the monthly contribution toward the down payment on closing for a total of $2,000 a month. The title to the property is only transferred to the tenant-purchaser if they meet all of their obligations under all of the agreements they have signed.

The agreement might specify that the tenant could purchase the home for a fixed price at a date in the future, which could be months or years from the start of the tenant’s occupancy. There is an expectation that, by the end of the lease, the tenant will have saved enough for the down payment, qualify for a mortgage, or be able to borrow because their credit has improved.

The owner then transfers the title if the tenant fulfils their part of the agreement, typically by taking out a mortgage in their name, Hortie said. The tenant could also pay the full purchase price before the end of the two-year leasing period.

While there should be some capacity for understanding, there should also be an ability to end the relationship if it’s not working out.

“It’s not a lease and it’s not a purchase, it’s both,” Hortie said.

Rent-to-own arrangements can be risky for tenants. If the value of the property decreased, the tenant could forfeit their down payment to get out of the deal or buy a house that is no longer worth the price they’ve agreed to pay. Landlords also assume some risk by locking in the price and foregoing the opportunity for a larger return. However, landlords often benefit if the tenant misses payments or can’t close the deal as the money paid toward the down payment is often forfeited to the landlord.

“In this case, it’s a relationship that culminates in a transaction if everybody gets along. There has to be a higher level of trust and engagement, and that’s where it can be tricky,” Hortie said.

PREVENTATIVE PROPERTY MAINTENANCE KEEPS TENANTS SAFE, REDUCES LANDLORDS’ LIABILITY Most landlords understand the importance of having a system in place for checking the equipment and machinery in their buildings. Not only does a system keep buildings running smoothly and

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residents safe, but it also lowers a landlord’s liability.

check, especially as it can take up to an hour for equipment and materials to cool off.

Property manager Tracy Norman and fire investigator James Hind will focus on preventative property maintenance, as well as safety and compliance issues, at the January 9 LPMA members meeting. The talk will be followed by a question-and-answer session to address landlords’ specific circumstances.

“If there’s nobody watching that, that’s when you can lose a whole house as opposed to potentially having smoke damage or no damage at all,” Norman said. “A trust but verify program is really, really critical for all key contractors."

Creating a routine

Norman recommends that landlords create a compliance program with a series of checklists and a regular schedule. With proper training, staff can identify potential hazards and take steps to mitigate them.

If landlords are performing checks only when they think of them, they’re not testing their systems at regular intervals. For example, staff should look over mechanical rooms in a larger complex daily. That prevents problems such as boilers not generating enough heat or keeping the water temperature within a normal range.

“Compliance, to me, means ensuring we have systems in place to be checking all of our life safety programs and systems,” said Norman, who is director of property management at Old Oak Properties.

Norman suggests that landlords record their results in a calendar. Even small landlords who check their equipment once a month should ensure that testing is done within the same few days every month.

On a building walk-through, staff should enter electrical rooms and boiler rooms, and know what to be aware of. Visual cues include fraying of wires and black marks on equipment, which indicate that a sparking situation has been or could be occurring — the prelude to a fire.

Smoke and carbon monoxide detectors should be inspected semi-annually as a best practice, Norman noted. Landlords also need to give proper notice to tenants that they will be entering their units.

Prioritizing compliance

Trust but verify Landlords need a list of trusted contractors, such as a plumber, electrician, HVAC specialist, and fire safety expert. That way, they can demonstrate to their insurance company that their systems are independently checked by professionals, which helps to reduce their liability, Norman said.

Landlords should periodically accompany a contractor and validate their work. For example, if a contractor is patching a leak and then welding, the landlord should ensure that the contractor is using arc protection and is doing a fire safety

Norman said the information she will be covering is often lost when landlords bring in a new team, lose staff or have customer service issues that take priority. However, compliance and building maintenance need to be prioritized to avoid customer service issues stemming from an injury to a tenant, property damage or liability problems.

“It really needs to be a harmonization of the two (building maintenance and compliance) and that’s where this can serve as a refresher for all landlords,” Norman added.

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 Tina Potter.

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

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CFAA RENTAL HOUSING CONFERENCE 2024

TORONTO The Canadian Federation of Apartment Associations invites you to join us next year in Toronto at CFAA-RHC 2024

May 14, 15 & 16, 2024 For more information visit cfaa-rhc.ca

2023 CFAA COMPENSATION & BENEFITS SURVEY As we have done every second year for more than a decade, CFAA is producing the one and only Compensation & Benefits Survey focused exclusively on the rental housing industry in Canada. For employers in rental housing, the CFAA Report will provide: Pay averages and ranges for 9 Property positions Pay averages and ranges for 20 Head Office positions Health benefits and employment trends National, regional and City specific information The property positions include building superintendent (resident manager), cleaner, doorman (concierge), leasing agent, maintenance technician, property administrator, property assistant manager, property manager and security guard.

If you are interested in buying the compensation survey for the areas in which you operate, e-mail awai@3rdquartile.com for pricing and an order form. (3rd Quartile is the compensation firm producing the compensation survey.)

CEO’S MESSAGE The fourth quarter of 2023 has been a busy time for the Association and for Saskatchewan’s rental housing industry. We’ve been hard at work planning for several upcoming events and advocating for our members on a variety of issues.

We finished off 2023 by advocating for members across the province.

In Saskatoon, the Association has been involved in housing summits strategizing with stakeholders and the City of Saskatoon about the housing accelerator fund. We have also been advocating for changes to zoning bylaws and exploring open option parking. In North Battleford, we were able to advocate for members concerned with emergency service costs to property owners. When members call, we answer.

Cameron Choquette, CEO

After a successful annual conference and events in 2023, we are looking forward to expanding our offering in 2024 while celebrating the Association’s 30th anniversary.

In conversations with several members, I’ve heard that there continues to be strong rental housing demand, even in these cold winter months, which is traditionally a slower time. With sustained immigration and increasing costs of home ownership, I’m sure we will continue to see strong demand as we approach spring and summer. It’s a great time to be a rental housing provider and a great time to be a tenant because Saskatchewan remains the most affordable province to rent a home!

Thank you to our members for their continued support of the Association and the work we do. It’s a pleasure to serve such an important and dynamic industry in our province.

- Cameron Choquette, CEO

Events at a glance Association celebrates 30 years This is an extra special year for the Saskatchewan Landlord Association as we celebrate our 30th anniversary. In 1994, we were incorporated as SKLA to provide a voice for landlords and property managers on the issue of damage deposits. In 1998, we changed our name to the Saskatchewan Rental Housing Industry Association to reflect our membership more accurately at the time. Seventeen years later in 2015, our Board of Directors decided to return to our roots as the Saskatchewan Landlord Association. In 2019, the Board hired its first ever full-time Executive Officer, Cameron Choquette, and moved the office to downtown Saskatoon.

Today, the SKLA is implementing the last of our first strategic plan launched in 2020 from our Saskatoon office. It will be an exciting and actionpacked year as we reflect and look back on 30 years of supporting and growing the industry in Saskatchewan and look forward to implementing a new strategic plan for growth into the future.

The Saskatchewan Landlord Association celebrates 30 years of supporting and growing the rental housing industry in the province.

Association receives $70,000 grant The Association is pleased to announce that it has been awarded $70,000 from the Law Foundation of Saskatchewan to develop and deliver a legal education program for rental housing providers in Saskatchewan.

“This program will improve Saskatchewan’s rental housing industry by educating rental housing providers on their legal rights, responsibilities, and industry best practices,” said Association CEO, Cameron Choquette.

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Saskatchewan’s rental housing providers own and manage more than 85,000 rental housing units, providing housing for more than 30 per cent of people in the province. The online program will be available for everyone – mom and pop operators, real estate investors, and large property managers. It will include multiple modules that cover topics like tenancy agreements, security deposits, rent increases, and much more.

The program’s development will be guided by an advisory group composed of subject matter experts, Association members, and tenants. It is expected to be launched in early 2025 and will use existing information from the Public Legal Education Association of Saskatchewan. It will also integrate legal precedents and important operational information on the legal rights and responsibilities of rental housing providers.

“On behalf of our members, I want to thank the Law Foundation of Saskatchewan for their support of this important work that will undoubtedly make a difference for both providers and renters,” concluded Sheena Keslick, Association Board Chair.

The Saskatchewan Landlord Association has received a grant from the Law Foundation of Saskatchewan to design and implement a legal training course for members.

Lunch n’ Learns in Regina and Saskatoon We hosted two Lunch n’ Learns in December in both Regina and Saskatoon. The events focused on “All Things ORT Applications and Hearings.” Participants received a live demonstration of the Office of Residential Tenancies online portal, had the ability to network with peers, and ate a great lunch.

Advocacy Since our inception, advocating for landlord rights has been one of our top priorities.

This remains true today and is a key impact area within our strategic plan. As an Association, we are the voice of our members and work hard on their behalf for balanced and fair legislation and policies that impact our industry. Some of our key advocacy activities are described below.

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North Battleford City Council In November, our members in North Battleford shared concerns that the City planned to bring in a bylaw that would charge property owners for emergency services. Our CEO appeared before North Battleford City Council with the message to enforce the bylaws on the books, amend the proposed bylaw to increase transparency and accountability, and clearly communicate expectations of property owners and enforce the bylaw only after communication and teamwork.

When our members call, we answer.

A few weeks later in December, the Association’s recommendations for additional clarity on the cost recovery bylaw were adopted by the City of North Battleford. A full procedure will be presented in January 2024, and includes a minimum of six calls before use of the bylaw, 30-day warning letters, and a monitoring mechanism.

Advocacy works.

SKLA CEO Cameron Choquette appears before Saskatoon City Council to support open option parking.

Successful annual conference

SKLA CEO Cameron Choquette appears in North Battleford to advocate on behalf of our members.

Saskatoon City Council In December, Saskatoon City Council moved forward with the exploration of open option parking. This has the potential to reduce construction costs, increase land usage, and build more housing. Our CEO Cameron Choquette appeared before council to speak in favour of the decision.

In October, SKLA hosted our second annual inperson conference since the pandemic, and we are thrilled with how it turned out. Members were able hear from best-selling author Janna Dutton, engage with guest speakers and interesting sessions, and network with industry vendors from across the country. We are already in the preliminary stages of planning for yet another fantastic event happening October 2024 in Saskatoon.

Looking ahead to 2024 The Association has a lot on the go! Our team is developing a limited legal service, increasing the offering of products for members, planning events in Regina and Saskatoon, and will be relocating offices to better support our members in-house.

We encourage readers to follow and engage with us on Facebook, LinkedIn, and Instagram to stay connected and up-to-date with the Association.

As the voice of landlords in Saskatchewan, we deliver knowledge, promote best practices, and advocate for a healthy and resilient rental housing industry. We are the leading community of industry professionals who are proud to provide safe, high-quality rental homes for the people of Saskatchewan.

We work to ensure Saskatchewan’s rental housing industry meets the needs of renters, owners, and managers. Our team is dedicating to serving our members in any way that we can.

Cameron Choquette, Chief Executive Officer #17-102 Cope Cr, Saskatoon, SK S7T 0X2 eo@skla.ca

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Final Take Away

Brought to you by Yardi Canada Ltd

Driving innovation and connecting communities

By Peter Altobelli, Vice President, Yardi Canada Ltd.

The recent decision to remove GST on Canadian rental housing developments has sparked excitement within the real estate industry as it is expected to encourage more rental construction. This initiative not only aims to alleviate housing affordability challenges but also highlights the increasing need for technology that connects investors with property owners and residents with staff and their communities.

Promoting purpose-built rentals The GST rental rebate is anticipated to spur increased investment in purpose-built rentals.

These long-term rentals can cater to different household sizes, income levels, and lifestyles, providing more options for individuals and families seeking rental accommodations. They can also be designed with modern amenities, creating a better living experience for tenants.

This often includes integrating features such as energy efficiency, smart home technology, communal spaces, and on-site services like fitness centres or coworking areas. By prioritizing tenant satisfaction, purpose-built rentals can set higher standards for quality and comfort in the rental market.

Generating positive economic & employment impacts The construction and operation of purposebuilt rental projects can have positive economic effects. These initiatives generate employment opportunities, both during the construction phase and for the ongoing management and maintenance of the rental properties. Additionally, the development of purpose-built rentals can attract investors to the local housing market, revitalizing neighbourhoods and contributing to economic growth. It’s important to note that the extent of the impact will depend on various factors such as the scale of purpose-built rental projects, local regulations, and the specific demand and supply dynamics in each city.

Meeting investor expectations Investors looking to capitalize on the growing demand for rental housing have high expectations for return on investment. By adopting online investor portals, multi-family businesses of all sizes can provide stakeholders with secure access to operational and financial performance whenever they require it – with full drilldown capability – without having to wait for a return call or email. This includes complete visibility into portfolio performance measurement, budgeting and forecasting, revenue management, capital status, statements, reports, metrics, and tax documents.

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Investment managers can also use online investor portals to call capital, make distributions through waterfall promote structures, and automate capital activity tracking. This lets staff members direct their efforts to more productive activities such as researching investment opportunities and strengthening client relationships.

Addressing resident expectations Technology also contributes to resident satisfaction by saving staff time with automated online services that reduce manual data entry.

For example, property owners can automatically list vacant units, pricing, floor plans, and more via dynamic marketing websites. These platforms can also integrate with CRM tools and digital call centres that automatically respond to online inquiries. Prospective residents gain convenience and flexibility with 24/7 access to property and unit details during or after leasing office hours.

Other services provided by modern property management software platforms such as online leasing, maintenance services, and payments are becoming increasingly popular. According to the 2023 Simply DBS Canadian Rental Market Survey, 63% of residents who don’t have mobile resident apps want them, and 83% of residents who have mobile resident apps use them. Such technology benefits staff as well as residents by eliminating errors associated with manual data entry.

Preparing for the next era of multi-family housing Embracing investment and property management technology is crucial to meet the expectations of investors and residents. With the use of robust technology solutions, property managers can effectively manage their portfolios, while residents enjoy a well-connected living experience within their rented communities. As the rental market evolves, leveraging technology will be vital for the continued success and growth of the rental housing sector in Canada.

To learn more about your technology options, visit Yardibreeze.ca.

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