RHB Magazine July 2020 by Marc Cote

Canadaâ&#x20AC;&#x2122;s #1 most widely read publication for Apartment Owners, Managers and Association Executives

Vol. 13 No. 2 July 2020

The official publication of:

RENTT:

The rental housing market in a post-COVID-19 world

The impact of COVID-19 on the rental housing market

Average rents are decreasing while vacancy rates are on the rise.

The challenge of maintaining elevators during the pandemic COVID-19 has forced elevator maintenance firms to change how they do business.

Pandemic-resistant tech for multifamily firms

Limiting face-to-face interactions can help prevent spread and exposure of disease.

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EDITOR’S NOTES Editor’s Note – We’re half way there I had a number of different plans for what I wanted to write for this month’s introduction to the Editor’s Note. However, to paraphrase the great philosopher Mike Tyson, “Everyone has a plan until they get punched in the face.” So, with the year half over and so many different things happening in our world, I’d like to suggest the following. After you finish reading the magazine, go outside, close your eyes, take a deep breath, and let it out. Now open your eyes, pause, and pay close attention to what you see and hear. Observe your environment, and the little details that you take for granted every day. Treat it like a newly discovered gift, and enjoy what you’ve found. The July issue of RHB Magazine focuses on the impact of COVID-19 on the rental housing industry. The RENTT feature examines the post-coronavirus world of the rental housing market. We interviewed several building owners, property managers, and rental housing suppliers on what they are doing differently, how they are dealing with employees, tenants, and clients, how they are communicating in the new world, what investments they are making in health and safety, and other topics. There’s a lot of data on how COVID-19 has affected different industries. We took a deeper look at the statistics and examined how the coronavirus is affecting average rents, rental demand, tenant movement and preferences, fallout from the condo rental market, the impact of the decline of short-term rentals, and the reduction in affordable housing. We also published an article on the challenges of maintaining elevators during the pandemic, how building owners and elevator maintenance firms are coping, and the innovations that are being developed to address the current challenges. Make sure to read CFAA’s newsletter, National Outlook, as well as the Regional Association Voice. Don’t forget to check out CBRE Suite Count and Final Take Away, from Yardi for more in-depth industry information. We enjoy hearing from our readers, and we support two-way communication, so if you have comments or questions, send them to david@rentalhousingbusiness.ca. I look forward to hearing from you. And, of course, stay safe and healthy!

Co-founder, Publisher

Marc Côté marc@rentalhousingbusiness.ca

Co-founder, Director

Juan Malvestitti juan@rentalhousingbuisness.ca

Editorial

David Gargaro david@rentalhousingbusiness.ca

Contributing Editor

John Dickie, President CFAA jdickie@rentalhousingbusiness.ca

Creative Director / Designer Scott Clark

Associate Publisher Nishant Rai

Office Manager Geeta Lokhram

Subscriptions

One year $49.99 Cdn Two years $79.99 Cdn Single copy sales $9.99 Cdn Opinions expressed in articles are those of the authors and do not necessarily reflect the views and opinions of the CFAA Board or management. CFAA and RHB Inc. accept no liability for information contained herein. All rights reserved. Contents may not be reproduced without the written permission from the publisher. P.O. Box 696, Maple, ON L6A 1S7 416-236-7473

Enjoy the issue! David Gargaro Senior Editor

4 | July 2020

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CONTENTS

VOL.13 NO.2 2020

The challenge of maintaining elevators during the pandemic

RHBâ&#x20AC;&#x2122;s forum for rental housing associations to share news, events and industry information

RENTT: The rental housing market in a post-COVID-19 world Rental housing owners, managers, and suppliers are doing things differently than before COVID-19 and helping to keep employees and tenants safe.

Hot Topics: HDAA reports on the $140 million redevelopment project that should transform the Hamilton West Harbour into a vibrant, mixed-use, transit-supportive and pedestrianfriendly community, as well as the views of the HDAA Board on the importance of technology and accommodating tenants. pg. 45 LPMA addresses rent collection techniques, discount rules, student rental and payment issues, and working with tenants who cannot pay due to COVID-19. pg. 49 WRAMA reports on the distress being experienced by landlords who were primarily renting to students at Waterloo Regionâ&#x20AC;&#x2122;s three large post-secondary schools, and lays out a reform program for the Ontario Landlord and Tenant Board. pg. 53 EOLO discusses practical requirements for re-opening, the new increased City of Ottawa solid waste collection fees and increased services, as well as updates to COVID-19 relief for landlords in the form of an expansion of CEBA, and COVID-19 relief for tenants in the form of an extension of CERB. pg. 57

The Member Associations

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

The impact of COVID-19 on the rental housing market Average asking rents are decreasing across the country, while vacancy rates are on the rise.

6 | July 2020

Final Take Away Technology can help to make multifamily properties safer during and after the pandemic.

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PRESIDENTâ&#x20AC;&#x2122;S CORNER CFAA held its annual Rental Housing Awards Presentation on June 25, announcing the winners through Zoom. For the winning rental housing providers, rental employees, renovations and new developments, see page 39. To see the awards finalists for New Product and Service of the Year, created by the suppliers to make operating your business safer and easier, go to page 41. CFAA congratulates our members and partners, who are providing quality tenant experiences and tremendous products and services, while addressing the challenges brought by COVID-19. Across Canada, governments are gradually re-opening the economy, while seeking to keep COVID-19 in check. Rental housing providers play an important role in that, as we balance maintaining resident and staff safety with providing the amenities and services residents want. Some rental providers are also struggling with rent collection due to the virtual closure of the Ontario Landlord and Tenant Board, and other provincesâ&#x20AC;&#x2122; rental tribunals. Landlords who rent primarily to students face a very uncertain time, as many post-secondary students plan to stay at home at least until January. In this issue, the associations contributing to Regional Association Voice all address one or more of those important provincial issues. See page 43 and following. The rental housing industry took another blow on May 28, when CMHC announced a restriction on equity take-out using insured upward mortgage re-financing. That may sound like an obscure issue, but people invest money in rental housing expecting to earn income and capital gains, and then to be able to take their income and some of their equity out of their investments. CMHC believes that its mortgage loan

8 | July 2020

guarantee should not be used for loan advances other than those which directly support rental housing. However, CMHC also wants to support the provision of new rental housing. CFAA is communicating the concerns of rental housing providers to CMHC on an on-going basis, to seek to avoid unintended consequences. CFAA wants to encourage a continuation of the strong investment climate which has recently been instrumental in drawing out more, much-needed, purposebuilt rental supply. We are sure that CMHC also wants that strong investment climate to continue. See page 35 for more details. CFAA is also preparing to deal with the other federal issues that will arise in the aftermath of the COVID-19 shutdowns and expenditures. For example, the capital gains tax issue, and the interest deductibility issue, will likely re-surface as the federal government seeks to rein in the large deficit created by COVID-19.

John Dickie, CFAA President John Dickie, CFAA President

rentalhousingbusiness.ca | 9

In this issue of... NATIONAL OUTLOOK 35. CMHC has issued new rules restricting equity take-out using increases in insured re-financing on rental buildings. Find out about the new rules, and what you may be able to do about them.

CFAA Member Associations 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

38. W ho won the CFAA Rental Housing Awards for 2020? Which rental providers, rental employees, new development, renovations and rental suppliers won bragging rights this year?

COVID-19 Prevention Package

40. W hat new products or services are available to help rental housing providers run their buildings and their businesses better? What do the CFAA Awards Finalists’ products do? Which product or service was rated the best new product or service for 2020?

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

The Canadian Federation of Apartment Associations represents the owners and managers of close to one million residential rental suites in Canada, through 11 apartment associations and direct landlord memberships across Canada. CFAA is the sole national organization representing the interests of Canada’s $480 billion rental housing industry. For more information about CFAA itself, see www.cfaa-fcapi.org or telephone 613-235-0101.

10 | July 2020

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 London Property Management Association (LPMA) www.lpma.ca P: 519-672-6999 Manufactured Home Park Owners Alliance of British Columbia (MHPOA) www.mhpo.com P: 1-877-222-4560 Professional Property Managers’ Association (of Manitoba) (PPMA) www.ppmamanitoba.com P: 204-957-1224 Saskatchewan Landlord Association Inc. (SKLA) www.skla.ca P: 306-653-7149 Waterloo Regional Apartment Management Association (WRAMA) www.wrama.com P: 519-748-0703

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RENTT: The rental housing market in a post-COVID-19 world By David Gargaro

Kris Boyce, CEO, Greenwin Corp.

In this month’s issue, we asked our esteemed RENTT (Rental Executives National Think Tank) panellists to talk about how their world has changed following the arrival of COVID-19. They discussed how they are doing things differently than before COVID-19, the new work environment, communicating with tenants and clients, and investments in health and safety, among other topics. We broke the panels into two sections: building owners and managers; and suppliers.

14 | July 2020

RHB: Welcome to RHB Magazine’s RENTT panel. We appreciate the time and effort involved in participating in today’s discussion. Our readers will benefit from your input and experience. Today we’d like to talk about how COVID-19 has affected how you do business. What are the most significant one or two things you are doing differently today in running your business as compared to before COVID-19? Kris Boyce: We transitioned 98 per cent of our corporate staff to working remotely. Initially, we were worried about how our teams would adapt, but it has been truly amazing to see how much we’re able to stay connected and on-task through technology such as Zoom and Microsoft Teams. To protect the safety of our site staff, we closed all of our site offices, restricting access to essential personnel, and are communicating with tenants though phone and email.

Ruth Buckle: The significant changes have been having our office teams working from home, and conducting our sales experience virtually rather than through in-person showings. We have been pleased with how seamless these transitions have been; our employees are working productively and effectively. The creativity shown by our leasing

Building Owners and Managers

Ruth Buckle, Senior Vice President, Property Management, Killam Apartment REIT team has been impressive. They have done a great job in connecting with prospective residents in various ways, including live virtual tours and prerecorded video tours.

Colin Letcher: Hollyburn has always been committed to providing our employees and residents with safe places to work and live. COVID-19 was an unprecedented challenge that emphasized the essential role we play as a rental housing provider, and brought the focus back to our four core principles: professionalism, quality, service, and commitment. As stress levels peaked, above-and-beyond customer service was paramount; we adopted a retention strategy, working with each resident on a case-by-case basis to ensure their housing remained secure during this difficult time. Our Business Continuity Plan was immediately implemented, allowing us to make swift adjustments to limit person-toperson contact, maintain operational excellence, and develop enhanced cleaning protocols to ensure safety remained at the forefront. We also introduced Touchless Renting, which now allows prospective tenants to tour, apply, and rent an apartment online with virtual tours, 360-degree floorplans and digital lease signing.

Colin Letcher, Health and Safety Specialist, Hollyburn Properties Ltd. RHB: Will you be bringing employees back together in total or in cycles, converting some positions to work from home, or making other workforce changes? Kris Boyce: Right now, we anticipate that the

majority of our corporate staff will be working remotely in some capacity extending into 2021. When we begin transitioning back to the office, we will continue to follow guidance from the government and public health authorities. As far as our workforce goes, we donâ&#x20AC;&#x2122;t foresee making any major staffing changes. However, the functions of some of these staff will change. At this point, we have designated COVID crisis teams, and we plan to keep these in place as long as they are required.

Ruth Buckle: Our entire team has been working

full time, for the most part, either from home for corporate and regional offices, or as frontline staff at our sites, using safe working practices. With respect to our Halifax-based corporate office return, we are now able to return to work with distancing and disinfection protocols in place. We have chosen a cautious return, implementing a gradual phased approach: 35 per cent for June, 50 per cent in July, 70 per cent in August. We expect to return fully in September, provided conditions continue to be favourable.

rentalhousingbusiness.ca | 15

Colin Letcher: Our return to work protocol allows employees of our head and regional offices to safely return on rotation, with a maximum 50 per cent capacity. We have strategically installed barriers, signage, and floor decals to ensure physical distancing, as well as providing personal masks and hand sanitizer. As essential workers, our resident managers and building staff have continued working throughout COVID-19 using extra personal protective equipment, online resident communication methods, and closed onsite offices. In our rental communities with larger teams, staggered schedules have been put in place to promote social and physical distancing. RHB: How have you been communicating any new health and safety or operating regulations, measures, and procedures to tenants? Kris Boyce: In addition to posting essential notices in common areas, much of our communication with tenants is taking place through our online resident portal, myGreenwin. The majority of our tenants use this portal, but for those who do not, we are always available by phone or email. We also created a designated email for all COVID-19-related inquiries. This has been a huge asset in being able to quickly assist those who need it most at this time.

Ruth Buckle: Our communication has been via a special COVID-19 banner on our websiteâ&#x20AC;&#x2122;s landing page, as well as posters in key tenant communication points in our buildings, including entrances, mail rooms, elevator lobbies, and site office entrances. At the start of COVID-19, we reviewed the guidelines for the seven provinces where we operate, and based our protocols on the highest standard. This included closing of all amenity spaces, limiting building visitors to essential workers and caregivers, requiring 14-day isolation within units for anyone returning from out of country or province, and locking all site offices with posted instructions for non-contact communication and rent payment options. For the easing of restrictions, we have customized the protocols to comply with the differing provincial and regional regulations.

16 | July 2020

Colin Letcher: Hollyburn significantly increased internal and external communication to ensure both our employees and residents clearly understood the health and safety measures we were taking to safeguard our communities. We continued to collaborate with industry leading associations, such as CFAA, FRPO, and LandlordBC, to craft consistent and empathetic messaging, following and setting industry standards. Our National Response Committee provided quick assistance through a dedicated COVID-19 email, and a COVID-19 website explained our preventive measures, new protocols, and leasing procedures. Weekly email updates kept everyone informed on Hollyburn and government policies, and building signage promoted social distancing and ways to stay healthy. RHB: What type of investment have you made in your business due to COVID-19? What ongoing costs do you expect to incur going forward? Kris Boyce: We have spent over $1 million on PPE, sanitizer, cleaning products, additional cleaning staff, and plexiglass shields. Going forward, weâ&#x20AC;&#x2122;re expecting this to become the new normal to an extent, and are anticipating building this into our 2021 budget and beyond. Ruth Buckle: We required very little investment as a result of COVID-19 because we adopted technology before COVID-19, which allowed for a seamless transition. More than 80 per cent of rental payments were already online via PAP and we had implemented Yardiâ&#x20AC;&#x2122;s CRM online leasing platform in 2018. We did purchase a few Adobe licenses to do online lease signing, as we had not yet implemented that CRM module, and our IT team purchased additional laptops and monitors, allowing our team to duplicate their offices at home.

Colin Letcher: During COVID-19, Hollyburn continued to invest in our people. Our staff are the heart and soul of our business. As a result, we hired a National Training and Development Manager to complete

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the Hollyburn Training School, prioritizing ongoing education for our employees, and ensuring our evolving protocols and procedures are understood and executed. Additionally, we increased our health and safety budget to install glass barriers, expand PPE inventory, and purchase disinfecting supplies that were previously approved for SARS and MERS. We will continue investing in our staff and the safety of our communities.

RHB: Have you changed how you collect rent? If so, how? Kris Boyce: We have always been committed to working with our tenants, especially in hard times. From a landlord’s standpoint, the COVID-19 pandemic has made communication, compassion, and flexibility more important than ever. With this in mind, we approach every situation on a caseby-case basis to try to achieve a positive outcome. Before the crisis, we were in the fortunate position that many of our tenants were already using our myGreenwin online resident portal, which provides a variety of convenient payment options. Although we restricted access to the management offices, we increased our email and phone communication with tenants to make sure anyone who had questions or concerns about rent payment could be assisted.

Rental Housing Suppliers RHB: Welcome to RHB Magazine’s RENTT panel. We appreciate the time and effort involved in participating in today’s discussion. Our readers will benefit from your input and experience. Today we’d like to talk about how COVID-19 has affected how you do business.

Ed Porasz, President, M & E Engineering Ltd.

Maxwell Payne, Senior Vice President, Parity Inc.

Ruth Buckle: Because more than 80 per cent of residents paid rent electronically before COVID-19, it was easy to transition the remaining 20 per cent to online payments. Online payment instructions, either through our tenant portal or through the tenant’s financial institution, were communicated on our website and posted at all properties.

Susan Reynolds, Director, Marketing, Coinamatic Canada Inc.

Colin Letcher: Hollyburn uses pre-authorized payment, which allows for automatic, no-contact rent payments. Throughout COVID-19, we continued to promote this to residents, while also extending credit card payment options on a case-by-case basis. For those impacted by the pandemic, we developed a Resident Payment Capacity Questionnaire and worked with each individual to keep their housing secure.

18 | July 2020

What are the most significant one or two things you are doing differently today in running your business as compared to before COVID-19? Ed Porasz: All staff are working from home. All of the safety protocols are in place to keep everyone safe, from what to do when we do go back to the office to how we handle on-site inspections and video and picture site inspections. Maxwell Payne: We’ve continued to carry out the majority of our processes by strictly following the health guidelines the government has set up. For property manager and board meetings, we’ve switched to virtual meetings in every case.

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The impact of COVID-19 on Canadaâ&#x20AC;&#x2122;s apartment associations In operating now, as compared with operating before COVID-19, the main changes for apartment associations have been much more working from home, participating in many more Zoom meetings, both for internal operations and for external events; and sending many more updates to members on fast-moving COVID-19 developments, government subsidy announcements, and restrictive regulations. Apartment associations have also been forced to cancel live events, including conferences, seminars, workshops, trade shows, and golf tournaments. Some associations have reworked some of their events into webinars or Zoom meetings. Many associations have expanded their digital or virtual presence with webinars, blogs, e-newsletters, multiple social media channels, or other substitutes for face-to-face contact. Many associations have also sought to influence government actions or communications, such as by working with public health agencies or city property standards departments. Most associations have been communicating new health and safety or operating regulations and recommended procedures to members. One association executive director told CFAA: â&#x20AC;&#x153;In the space of about 10 days in late March or early April, I sent out five different e-Blasts. They included operational recommendations, such as closing amenity facilities before this was suggested or mandated by the government, information on government regulations banning notices

to end tenancy by landlords, banning rent increases and changed methods of document service, and advice about issuing notices of rent increase with a note about when they would be implemented.â&#x20AC;? Other associations advised members on how to communicate with their tenants about the need to pay rent, rent deferral agreements for those in financial distress, and health and safety information for tenants and landlord staff. At least two associations helped members and non-members with minimizing bad publicity for rental housing providers. On the financial side, the impact of COVID-19 has varied greatly. Some associations have taken a serious hit because of losing key revenue-generating activities, such as trade shows, dinners, and seminars. A number of those associations have applied for government relief, such as CEWS or CEBA, or are planning to ramp up quickly as soon as they can resume in-person meetings. Other associations operated conferences, trade shows, dinners, and seminars at close to break-even points (or even at small losses), so they have not been as hard hit. By John Dickie, President, CFAA

20 | July 2020

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Susan Reynolds: Most office staff from head office and branch offices across Canada are working from home. We have implemented a new service request portal on our website to help our clients and their residents report issues. As laundry is deemed an essential service, we continue to have service technicians on the road to service laundry equipment. However, service technicians and collection personnel have all been equipped with masks, gloves, and sanitizing products, and have been trained on proper distancing protocol. In addition, before a Coinamatic employee enters the common area laundry room, it is temporarily closed to others while they perform their work.

RHB: Will you be bringing employees back together in total or in cycles, converting some positions to work from home, or making other workforce changes? Ed Porasz: We will be bringing back people in stages once the government and health officials deem it safe to do so. We will not be rushing to fill our offices; we will move critical people only first to the office and then slowly move everyone else. Everything will be evaluated to keep people safe and to service our clients.

Maxwell Payne: As a company, we’ve recently modified our WFH policies to reflect the new reality, as more of us continue to work from home. Essentially, we’re following the recommendations of health officials on staff return dates and protocols.

Susan Reynolds: We have a return to the workplace procedure in place, which will be followed in order to protect our employees and visitors. Employees will be returning in cycles. Some positions will be allowed to remain working from home.

RHB: How have you been communicating any new health and safety or operating regulations / measures / procedures to clients (and tenants where applicable)? Ed Porasz: We have updated our policies on COVID-19 three times in the last eight weeks. At the moment, we recommend to clients that no work should be started or take place inside tenant suites, but work in boiler rooms, roofs, electrical rooms, and some work in corridors can be completed and done safely with the proper procedures. We have been working with some 22 | July 2020

clients and contractors to coordinate the work in these areas, while keeping everyone as safe as possible.

Maxwell Payne: As the pandemic unfolded, Parity was very quick to notify our existing clients of the ways in which our teams would be modifying their approach to servicing existing buildings and carrying out new assessments. We generally use person-to-person calls and email notifications as our primary forms of communication.

Susan Reynolds: We have posted some valuable information on our website for both our clients and their tenants. We have included Safe Laundry Practices posters that can be downloaded from the website and posted in laundry rooms. We have also included information on preventing the spread of COVID-19 in shared laundry areas and also shared information about how service technicians’ visits will be modified to protect both our employees and the residents and staff in the building.

RHB: What type of investment have you made in your business due to COVID-19? What ongoing costs do you expect to incur going forward? How has COVID-19 changed how you are charging for services or invoicing? Ed Porasz: We are hoping that not much will change. We have invested in software and hardware to move our staff to their home offices and we have invested in PPE. The goal is to give the best service possible to our clients and manage the construction work in a safe manner to ensure the client gets the product that they need.

Maxwell Payne: There have been increased costs on outfitting our operations teams with the equipment needed to keep our clients and our teams safe. However, these investments are well worth the cost to ensure a safe working environment for everyone. Susan Reynolds: We have been implemented website changes to make communicating with Coinamatic easier during this time. We are escalating our investment in mobile payment technology to make payment for laundry easier and safer.

RHB: Thank you for your input and participation

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The impact of COVID-19 on the rental housing market By David Gargaro We know COVID-19 has had a significant impact on all parts of the Canadian economy. Many companies, manufacturers, restaurants, stores, and other businesses have gone out of business, temporarily shut their doors or reduced operations. Thousands of people have either lost income or had their income dramatically reduced, and have had to apply for government financial support. The rental housing industry has faced its own challenges. Some renters are unable or unwilling to pay their rent given these difficult financial times. Most provinces imposed a ban on evictions (or on evictions for non-payment of rent), which has complicated rent collections. Many building owners and managers have worked out arrangements with tenants who are unable to pay their rent. Building owners, property managers, and companies that service the rental housing industry have also had to deal with the health and safety implications of COVID-19, as well as the financial fallout. We have only been in the current situation for a few months, and no one really knows how long it will last, or the long-term implications of the shutdowns. However, over the short term, average rents for new rentals have stalled or are decreasing across the country, while vacancy rates are increasing. The causes of these trends are both direct and indirect.

A quick look at the data According to Rentals.ca, the average asking rent for Canadian properties was $1,814 per month in May, down 1.4 per cent from April and down 5.4 per cent from what it was one year ago at $1,842. Year over year, average rents for new rentals of condo apartments fell by 9.4 per cent, while average rents for purpose-built apartments fell by 3.5 per cent. Provincially, Ontario saw decreases in average asking rents of 4.6 and 0.6 per cent in April and May. Alberta declined 5.7 per cent in April but increased 1.2 per cent in May. BC decreased 0.7 per cent in April but rebounded 2.1 per cent in May. Quebec increased 1.2 per cent in April but

24 | July 2020

decreased 1.9 per cent in May. Big cities also saw some large variations. Edmonton and London declined 11.3 per cent in April, but increased 1.0 and 2.9 per cent, respectively, in May. Toronto declined by 6.0 and 0.5 per cent in April and May, while Victoria declined by 8.7 and 4.0 per cent in April and May.

Tenants are staying putâ&#x20AC;Ś for now Few vacancies have opened up from renters who want to move to new apartments or buy homes. People have been required to shelter in place for a couple of months, so tenants and homeowners have primarily stayed where they are currently living. Due to the perceived risk of infection from continued on page 26

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“Rental demand has plummeted in Toronto as tenants stay in ... “ COVID-19, most people don’t want to look for an apartment during the pandemic nor do they want to open up their apartment for viewings. This has limited the availability of rental units to some degree, but there are also fewer people searching for rental units.

condo owners wanted to live close to downtown amenities and public transit. However, being forced to live in the same space for a long period of time, as well as having to share elevators and building amenities with strangers, has potentially changed their preferences.

With many people losing their jobs or facing reduced wages, a significant number of tenants do not have the income or funds to move up or out. Average rents for new rentals have not declined enough compared to tenants’ current rents to warrant a move. As a result, there have not been significant changes in turnover and vacancies.

Some experts think condo owners and renters are going to start moving out of densely populated areas and city centres. Being close to amenities will be less important than having space and separation from neighbours. There has already been a spike in short-term rentals in suburban and rural areas, according to data from AirDNA, which provides data and analytics from short-term rental sites. People with the means to do so have sought refuge in cottages and rural areas, and some people will make the move on a more permanent basis when possible. With companies enabling employees to work from home, this might become a more permanent trend, so living close to public transit will not be as important as it once was.

“Rental demand has plummeted in Toronto as tenants stay in their current accommodations for fear of exposing themselves to COVID-19,” said Matt Danison, CEO, Rentals.ca. “And, unemployment has soared with the pandemic lockdown, reducing move-up, move-down movement.” However, this could change quite rapidly, as the lockdowns ease and people are freer and more comfortable about moving. According to Guy Tsror, a data scientist at Local Logic, the rental market lost 27 per cent of user search traffic at its lowest point in March. However, near the end of April, search traffic rebounded to levels exceeding those seen in January. “Rentals.ca has experienced its all-time high in traffic numbers in the first week of May, surging 59 per cent compared to the first week of April,” said Danison. “Renters who put off moving when the pandemic hit are now starting to resume their apartment search in the hopes that Canada’s lockdown will end in the coming weeks.”

Changing preferences COVID-19 has done more than affect the economy – it has also affected how people have had to live and want to live. Of course, people either could not or did not want to move during the pandemic. Some people had to stay home because they were either infected with the virus or had potentially come into contact with someone who was infected, forcing them to self-isolate for 14 days. The pandemic has influenced people’s preferences and priorities. Prior to COVID-19, renters and

26 | July 2020

Fallout from the condo rental market While there are condo rentals available in many Canadian cities, the impact of COVID-19 on this market is most apparent in the Greater Toronto Area. There is a clear divide in the numbers before and after the pandemic shutdown. According to Urbanation, total lease transactions in the GTA condo market grew 16 per cent year over year during the first quarter to a record high. However, in the first two weeks following the shutdown in mid-March, lease volume was down 25 per cent compared to the same time last year, and was down 39 per cent compared to the first half of March. Looking at just the first two weeks of May, condo lease activity was down 43 per cent year over year. The number of leases during this two-week period is also more than double the number of resales. On the other side, there has been a 7 per cent increase in the number of new listings year over year during the first half of May. More condo projects have reached readiness for occupancy and former short-term units arrived for lease in the long-term market. There was also a 29 per cent increase year-over-year in furnished long-term continued on page 28

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continued from page 26

“This pandemic could have a real impact on the supply of new housing ... “ condo rental listings in the first quarter. This means that there is more rental stock available in relatively new properties with good amenities. “The downward pressure so far has been seen in the secondary market, as a lot of condos pre-sold to investors are reaching completion and more short-term rentals previously operated as AirBnBs have been listed in the long-term market,” said Shaun Hildebrand, President, Urbanation. “The divergent trends for rental demand and supply resulted in a 3.4 per cent year-over-year decline in average rents and a 4.3 per cent decline in median rents, equal to a reduction of $100 per month.”

Disappearance of short-term rentals No one is taking a vacation or travelling to Canada, as the borders are essentially shut down. Therefore, there is less immigration, and with universities closed, there are fewer international students looking for temporary accommodations. All types of events, such as conferences, weddings, seminars, festivals, and concerts, have been cancelled for the immediate term and the foreseeable future. As a result, there has been a significant decline in the need for short-term rentals, as well as in their availability. A large number of short-term rental properties in large cities are vacant, and their owners are not earning rental income. Many owners will either have to put these units back into long-term rental market or sell the units outright if they cannot cover the mortgage. Either way, this will give renters more options, particularly in cities with traditionally low vacancy rates, such as Toronto, Vancouver, and Victoria. According to Fairbnb Canada, a coalition of homeowners, tenants, hotels and labour organizations, Toronto could see 7,500 homes put back into the long-term rental market due to COVID-19. Some provinces and municipalities have also put in restrictions on short-term rentals. For example, Ontario has issued an order that limits short-term rentals to those “who are in need of housing during the emergency period.” Along with some states and municipalities, Quebec has banned or restricted short-term rentals due to the pandemic. Some buildings have also banned short-term rentals due to the danger to permanent residents of being exposed to COVID-19. That is on top of the short-term rental restrictions put in place on a permanent basis in numerous locations.

Reduction in affordable housing Rents are expected to fall, although this will mostly affect higher end units. While vacancy rates should rise overall, the stock of affordable housing is expected to fall. It’s difficult to find subsidized housing in big cities due to long waiting lists. Add people being laid off and companies closing, affordable units not opening up because people cannot afford to move, and a freeze on evictions, and there is less affordable housing on the market. Construction of purpose-built affordable rental housing has also slowed or stopped in some circumstances. “This pandemic could have a real impact on the supply of new housing in the GTA in the long term, as missed payments by tenants and lower rents could have many investors rethinking future preconstruction condo purchases,” said Ben Myers, President, Bullpen Research & Consulting. “These buyers help developers reach pre-construction sales targets, and a decline in investors will result in significantly less new housing supply in four to five years if these purchasers change their condo-buying habits.”

Conclusion It’s still relatively early in the COVID-19 pandemic, but it has already impacted the rental housing market. Average rents are expected to decline at the high end of the rental market, and vacancy rates will continue to rise, but how much and for how long remains to be seen, and there will be regional differences. Cities that have recently recorded consistently low vacancy rates and climbing rents will have to deal with the new normal, however long that may last.

28 | July 2020

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SUITE COUNT RHB SIDEBAR Capital markets & national investment snapshot

National Apartment Group

Montreal multi-residential update Marc Hetu, Executive Vice President

The outlook for the Montreal multi-family market in 2020 is strong, even in the aftermath of the COVID-19 crisis. As the provincial economy re-opens, the underlying fundamentals propelling the market in recent years, such as growth in the tech sector and major infrastructure projects, are expected to quickly realign the market. Based on a recent increase in local market activity as well as discussions with our national team, pricing is proving resilient in the first half of 2020. Active listings, ongoing due diligence periods, and scheduled closings show that cap rates in Montreal continue to range between 3.85% and 4.25% for newly constructed buildings. On a per suite basis, prices vary between $325,000 and $400,000, while on a per square foot basis, prices range from $275 to $475. Capitalization rates for the most desirable 1960s vintage apartment buildings were recorded between 3.60% and 4.00% in 2019, with sale prices ranging between $230,000 and $530,000 per suite. Private investors remain dominant in the purchase of smaller buildings (less than 60 units) and captured 100% of sales for this market segment last year. However, REITs and domestic institutions continue to lead broader market activity, similar to 2019, accounting for 53% and 26% of total 2019 transactions, respectively. A significant development cycle is currently under way. Last year, 18,250 multi-residential units were completed, a 9.3% increase over the 16,558 units added in 2018. Two-thirds of all units completed in 2019 were purpose-built rentals. Forward looking indicators of supply show no change to this trend, continuing the development cycle with over 27,000 multi-residential units under construction during this summer, of which more than 55% are rentals. Although these construction levels haven’t been seen since the 1960s, the delivery of units for rent and for sale is in line with demand. Demand in Montreal’s downtown core and surrounding urban areas supports decreasing vacancy and turnover rates to 1.5% and 15.7% on average; a strong local economy and relative housing affordability are expected to sustain demand for rentals in Montreal through the latter half of 2020 and into the future.

2018

2019

Delta

Vacancy

1.9%

1.5%

-40 bps

Avg. Rent

$796

$841

5.65%

Turnover

17.4%

15.7%

-170 bps

For more information on Canada’s multi-residential sector, you can reach out directly to any member of CBRE’s National Apartment Group.

30 | July 2020

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The challenge of maintaining elevators during the pandemic By David Gargaro Ensuring that your buildings’ elevators are safe and operational is challenging during the best of times. There have been many high-profile situations with elevators being out of service for days or weeks at a time, and building owners being called out for it. Elevator problems can leave tenants stranded or forced to take the stairs for longer than their patience will hold. Now throw in a pandemic, and building owners, as well as elevator maintenance firms, have some serious obstacles to overcome. “Elevators have received a lot of press and it has definitely been a challenge,” said Steve ReichRohrwig, President, MAD Elevator Inc. “Even with some examples of outbreaks in office towers, which were limited to a given floor, elevators did not play a notable role as a source of spread, as a small confined public space. However, the perception and potential of it is very concerning for tenants and property managers.”

Maintaining elevators can be an issue Much like most companies across every other industry, elevator maintenance firms have had to change how they do business. The government mandated that elevators are an essential service, since people depend on their safe and continued operation. Therefore, companies that service elevator equipment have continued to operate throughout the shutdown. With people forced to shelter in place and work from home, elevators in multi-unit residential buildings have seen a lot more use throughout the day, which has led to greater wear and tear and more service calls from building owners due to malfunctions and breakdowns. “Unfortunately, components wear out and must be replaced to keep the elevators running properly,” said Phil Staite, Senior Vice President, Quality Allied Elevator. “With social distancing, fewer people are travelling in the elevator at the same time. This results in elevators making many more trips, increasing the chances of components wearing out.”

32 | July 2020

Some building owners have put off planned upgrades and modernization of elevators and other equipment. Since most people are home, projects are being delayed or cancelled so that elevators are not pulled out of service. At the same time, maintenance and modernization work is being moved up for commercial buildings since occupancy is low, giving the elevator companies time to get the work done with no one around before everyone comes back to work. “Any work required for safety purposes must be completed, including all Technical Standard Safety Authority Directives,” said Staite. “Work to keep the elevators operating reliably should also be scheduled and completed.”

Keeping people safe Elevators are tight, enclosed spaces, so physical distancing is nearly impossible when they hold three or more people. Elevator maintenance firms have ensured they follow federal and provincial health and safety guidelines for keeping employees and the public safe, and to prevent outbreaks of COVID-19. When working on elevators, staff have been required to wear face masks, and work shifts are staggered so that no more than three employees are within a work area at a given time. They have also regularly disinfected work and common areas when on site to keep tenants and employees safe. “Our technicians must be more aware when entering or exiting a building or working on hall stations or car stations,” said Staite. “Many customers have asked for our policies and have asked us to follow their policies and procedures, which we distribute to our technicians.”

Difficult times create interesting solutions Challenges often lead to innovations, and the pandemic has spurred the development of solutions that keep people healthier and safer in elevators. As with any new technologies, some will be better than others, and some innovations will take hold while others will fall by the wayside.

Foot-activated push buttons and pedals have already been implemented in some buildings, and are both effective and easy for tenants to understand. Other innovations include antimicrobial and copper pushbuttons (which kill germs and viruses on contact), smartphone apps for calling the elevator with a person’s device, and futuristic holographic pushbuttons that look “cool” but are probably not ready for prime time. “I think the future is in touchless buttons,” said Reich-Rohrwig. “We adapted one of our pushbuttons to have a sensor embedded in it while retaining the mechanical activation. So, if you put your finger near it, it activates the same as a push. It’s simple and cost effective. The challenge is in working on sensitivity so you don’t accidently activate other buttons; however, it looks very promising.” Another solution for using elevators differently in the new normal is Destination Dispatch. While it’s not new technology, building owners can use it in a new way to help keep people safe when moving between floors. When a passenger selects their destination floor, an elevator is assigned to them using algorithms to group passengers and drive the most efficient flow of people within the

building to minimize total travel times. Destination Dispatch technology can also be used to limit the number of people on an elevator. “No other technology actually addresses the social distancing challenge of the elevator,” said Reich-Rohrwig. “Yes, there are signs to limit numbers of passengers, and stickers on the floor to tell you where to stand, but this is how you can actually limit them. Scanning a security card at the kiosk could be used for contact tracing. We can dedicate elevators to different floors. There are endless possibilities here.”

Conclusion Whether we are forced to stay and work from home, or we proceed to a new normal, building owners and tenants will still need to rely on elevators that are safe and effective. The pandemic has forced elevator maintenance firms to pay closer attention to maintaining the health and safety of their employees and the people who use elevators. It is also giving them the opportunity to innovate and find ways to use technology to make elevators safer and healthier to use on a daily basis, no matter what’s going on in the world.

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rentalhousingbusiness.ca | 33

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JULY 2020

CMHC’s Mortgage Insurance - New Use Of Funds Rules For Re-Financings By John Dickie, CFAA President

On Thursday, May 28, CMHC issued a notice to rental owners who have pending applications for CMHC insurance for re-financings in relation to CMHC’s MultiUnit Mortgage Loan Insurance (5+ units). Prompted by an acceleration in applications for refinancing, CMHC has imposed a new restriction on use of funds as a condition of insurance for market refinance loans. This is a significant issue because the new rule will Evan Siddall, President & make it more expensive for rental investors to remove CEO, CMHC investment capital from rental housing investments. In turn, CFAA and others think that is likely to reduce returns in rental housing, which will reduce investments and raise market rents. This article reports on details of the new rules, the likely unintended consequences of the new rules, what CFAA is doing about the new rules, and what you can do about them.

Permitted purposes CMHC believes that its mortgage loan guarantee should not be used for loan advances other than those which directly support rental housing. However, CMHC also wants to support the provision of new rental housing. (As we will see below, considerable practical difficulties arise when upward re-financings are used for multiple purposes, as is often the case.) Under the new rules, insured upward re-financing proceeds must be used for a permitted purpose in relation to residential housing. This could include one or more of the following: • a rental housing purchase, • construction, • capital repairs/improvements (including for increased energy efficiency and accessibility), • securing permanent financing, and • certain other uses permitted on a case-by-case basis (such as funding to deal with COVID-19 rent shortfalls). Repaying already insured debt due to an Approved Lender on the building which is being re-financed is also clearly acceptable. However, the May 28 notice referred to guaranteeing refinancing for equity take-out (ETO) as an improper use of government resources, and urged CMHC clients to seek private sector solutions for these uses.

CMHC’s positive clarifying communication with CFAA CFAA has conferred several times with senior CMHC officials, as well as the working group responsible for implementing the new rule. For rental housing providers, the key take-aways from those meetings are the following. As of July 3, subject to the usual underwriting tests, CMHC is saying the following:

rentalhousingbusiness.ca | 35

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NATIONAL OUTLOOK Positive points for all insured borrowers 1. Insured upward refinancing proceeds can be used for capital repairs or improvements anywhere in a borrower’s portfolio, i.e. the use of funds is not limited to the specific property used as security. 2. Upward refinancing proceeds can be used to fund the acquisition of a new residential rental property anywhere in Canada. 3. CMHC is not imposing any restrictions on the use of a conventional second mortgage to take out equity. That is up to the Approved Lender who has provided the insured (first) mortgage loan. 4. All the relevant tests will be applied by the Approved Lenders, rather than by CMHC directly, although CMHC will provide guidance generally and can provide it on a transactional basis. 5. The relevant test will be applied at the level of a group of associated companies. There is no intention to get into the details of corporate structures. 6. Exceptions to the new rules may be permitted on a case-by-case basis (such as funding to deal with COVID-19 rent shortfalls). Positive points for rental housing providers who develop properties 7. Upward refinancing proceeds on any property can be used to fund the construction costs of a new residential rental anywhere in Canada. 8. The initial insured financing of a newly developed residential rental property can be used for an equity distribution. 9. If a property is intensified, a new CMHC-insured mortgage can be arranged to refinance the whole property (existing plus newly developed units). However, an equity distribution can only be made with respect to the new units created.

CFAA’s remaining concerns CFAA asked CMHC about a number of areas which remain matters of concern to rental housing providers. The key concerns are: 10. B uildings often require major repairs or energy upgrades (i.e. capital expenditures or “capex”) at various points in time, which often do not correspond to a re-financing date. CMHC is currently reluctant to see upward re-financing applied to take out equity, even if it is to repay equity injected or income which was left in a property to pay for capex. There may be some scope for that on a limited and transitional basis, but not on a continuing basis going forward. 11. A n upward refinancing on one property in a portfolio cannot be used to pay regular principal amortization on a borrower’s other CMHC-insured loans. 12. P oint 5 above may not be sufficient to allow equity take out by group of co-investors for some of them to re-invest in other properties or in a new development. 13. A t this time, CMHC does not intend to provide an exemption for buildings which currently have a low leverage level. 14. C MHC does not seem to be willing to provide an exemption for upward re-financing to take out equity to pay taxes on capital dispositions deemed to have occurred by reason of the death of an owner or a co-owner. In the view of many rental housing providers, the various concerns mean that the new rules will discourage investment in rental housing, thus reducing rental supply and raising rents, which is contrary to CMHC’s stated policy of advancing the availability and affordability of rental housing.

rentalhousingbusiness.ca | 37

JULY 2020 Unintended consequences Stating the policy concerns in a different way, CFAA believes that the new ban on the use of CMHC’s mortgage insurance for many forms of equity take-out will likely cause the following unintended consequences: • a reduction in the capital inflow into rental housing, • a reduction in new rental housing supply, • inefficiencies in capital maintenance programs, resulting in higher capital maintenance costs, • an increase in rents over time, • disadvantages to:  smaller rental operators,  rental operator/developers who are new to the rental housing business, and  rental operator/developers in small communities or communities with a less diversified economic base, and • more instability and more sales in the rental housing asset market. CFAA hopes that specific rules will address the numbered concerns 10 to 14, listed above, thus mitigating the unintended consequences for rental housing providers, investors, renters and the community.

Steps from here CFAA has always had a strong, positive relationship with CMHC. CFAA is communicating the concerns of rental housing providers to CMHC on an on-going basis, to seek to avoid unintended consequences. CFAA wants to encourage a continuation of the strong investment climate, which has recently been instrumental in drawing out more, much-needed, purpose-built rental supply. We are sure that CMHC also wants that strong investment climate to continue.

Providing input on these and other issues CMHC is holding consultations about the new rules, and about other possible revisions to their insurance products. If the new rules about use of funds concern you, you can participate in those consultations by communicating with your CMHC representative. You can also communicate your concerns to your usual lender, and ask them who to contact at CMHC. Or through a google search of the CMHC website you can reach out to a “CMHC Housing Solution Specialist – Multi-Unit”, who will ensure that your input is shared with the appropriate teams within CMHC. Sending CFAA a copy of any submissions you make would also be helpful. Please e-mail us at admin@cfaa-fcapi.org. The sooner you provide your input to CMHC, the better. CMHC is taking input until early August, and then expecting to make decisions on the details of the new rules by late August.

For more information CFAA will advise further as more information becomes available and can be disclosed. To get the latest information as quickly as possible, make sure you receive CFAA’s e-Newsletter. See the banner below for how to sign up.

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!

38 | July 2020 rentalhousingbusiness.ca | 38

rentalhousingbusiness.ca | 38

NATIONAL OUTLOOK CFAA Rental Housing Awards 2020 - Winners and Finalists

Congratulations to all the finalists and winners of the CFAA Rental Housing Awards 2020! CFAA thanks the judges, everyone who entered the Awards Program this year, and the Awards Presentation sponsors. This program could not take place without your interest and support.

Rental Housing Provider Awards Rental Housing Provider of the Year – Under 7,500 Units Winner Shiplake Properties

The CFAA Awards Presentation was sponsored by:

Shiplake Properties’ COVID-19 response program went above and beyond to help residents with rent, engage with virtual cooking shows and home fitness, and provide food gift cards and surprise food deliveries. During these challenging times, Shiplake demonstrates the good which rental housing providers can do for residents & the community.

Finalists: Greenrock Real Estate Advisors Sifton Properties

Rental Housing Provider of the Year – Over 7,500 Units Winner Skyline Living

Skyline Living’s Tenant Assistance Program provides inhouse tenant advocacy services that assess tenants’ specific needs, and provide direction, resources, and support. The Program also provides financial assistance to residents, if required. Skyline demonstrates the positive effects which rental housing providers can have on individuals, by helping those who need it most.

Why did the other winners win? To see what CFAA’s judges said about the other winners, go to www.cfaa-fcapi.org/events-awards/ and click on “Awards Program”.

Finalists: CAPREIT Drewlo Holdings

Off-Site Employee of the Year Winner Seana Hall of CAPREIT Finalists: Jonathan Bursey of Hollyburn Properties Jordan Ali of Skyline Living

On-Site Employee of the Year Winner Khalil Parker of CAPREIT Finalists: Pam Vaughan of Skyline Living Ethel Parsons of Starlight Investments

Property Manager of the Year Co-Winners: Andrew Arrica of Hollyburn Properties, and Ellen Gerow of Sifton Properties Finalists: Ljuba Milosevic of Skyline Living Wendy Adams of Timbercreek Properties

rentalhousingbusiness.ca | 39

JULY 2020 Rental Development Awards Rental Development of the Year – Low-Rise Winner Suites at Summerside by Skyline Living Finalists: Station Road Apartments by Colpitts Developments Waterdale Walk II by Drewlo Holdings

Rental Development of the Year – High-Rise Winner CURVE at South Park by Southwest Properties Finalists: King’s Club by CAPREIT The Westminster by Wesgroup Properties

Renovation Awards Renovation of the Year – Building or Exterior Winner Promontory Ridge Estates by MCC Legacy Trust Finalists: 2 Regal Road by Starlight Investments 50 Burnhill Road by Starlight Investments

Renovation of the Year – Common Area Winner 1475 Bloor Street by Starlight Investments Finalists: 7 Parker Street by Killam Apartment REIT 2737 & 2757 Kipling Avenue by Starlight Investments

Renovation of the Year – Suite Winner 40 Weldon Street by Killam Apartment REIT Finalists: Forest Hill Residences by Hollyburn Properties Limited Twin Lakes – 3781 Princess Avenue by Starlight Investments

Marketing Awards Marketing Program Excellence of the Year – Lease-Up or Pre-Lease Up Winner The Westminster by Wesgroup Properties Finalists: King’s Club by CAPREIT Helio by Sifton Properties

Marketing Program Excellence of the Year – Company or General PR Winner #MyHollyburn by Hollyburn Properties Limited Finalists: Deveraux Rebrand by Deveraux Apartment Communities Westminster Social Media Campaign by Wesgroup Properties

Rental Housing Supplier Awards Suppliers Council Member of the Year Winner Wyse Meter Solutions

WYSE is offering their program to all of their partners to help property owners to reach net carbon zero by 2025, while reducing operating costs. WYSE has developed a solution which reduces environmental impacts and also raises the standard of practice in the industry through a dedicated, long-term initiative.

Finalist: Storm Insurance Group Storm Insurance is the new overarching name for APReid, Zipsure, MyGroup and more. For years, this group of companies has moved the markers for insurance for rental housing providers and tenants, as shown by their previous win in the CFAA Awards Program. Storm took what was to be a $40,000 donation to the Halifax Food Bank and leveraged it to potentially $120,000 or more.

40 | July 2020

NATIONAL OUTLOOK New Product or Service of the Year Winner Suite Turnover & Property Operations Software. COVID-19 Prevention Package by SuiteSpot Technology SuiteSpot’s Suite Turnover & Property Operations Software is designed for property managers who are constantly on the move, allowing them to access all the needed information at any time from any device. SuiteSpot’s recently released COVID-19 Prevention package builds on and enhances on existing features by aiding users in observing social distancing and other COVID-19 safety precautions.

Finalists: ChatManaging by National Efficiency Systems ChatManaging is a Chatbot which uses artificial intelligence to engage in conversations with prospective tenants online, allowing for a 24/7 experience. The Chatbot gives prospective tenants instant answers at no cost in staff time, and then sends pre-qualified leads directly to a property’s inbox, simplifying the leasing process. Contactless Parcel Lockers by Snaile Snaile’s Contactless Parcel Lockers automate the process of receiving packages in mulitresidential buildings, without requiring any face-to-face contact with another person. The parcel lockers accept deliveries via a QR code scan, which generates a pickup notification that is sent to the resident either through text message or email. No human concierge is needed. To see what our judges said about the other winners, check out www.cfaa-fcapi.org. To find out more about CFAA’s Awards Program, how to enter for 2021, or to volunteer as a judge, please email awards@cfaa-fcapi.org. We hope you will enter and attend the CFAA Awards Program in 2021!

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Visit www.cfaa-fcapi.org for more information.

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RHBâ&#x20AC;&#x2122;s forum for rental housing associations to share news, events and industry information

The Member Associations

PRESIDENTâ&#x20AC;&#x2122;S MESSAGE

Our world has changed Things were quite uncertain with COVID-19 when we provided our last update. Although there is still quite a lot of uncertainty about how things will look in the months and perhaps years to come, I think most people and businesses have a better grasp of what our new normal will look like. As of the date of writing, Hamilton and many other regions in Ontario will be moving on to Stage 2 and the excitement is definitely being felt in the air. Although there are many challenges still to be faced and many government recommendations that businesses and individuals will need to follow, there is hope and optimism that things will normalize soon. - Arun Pathak, President

Hamilton Updates We thought we would again focus on Hamilton updates that do not concentrate on COVID-19 but on issues that were at the forefront before the pandemic. With regards to licensing, the planning committee is slowly beginning to resume meetings; however, there has been no word on when the licensing issue will be addressed. The HDAA will continue to monitor any news and provide updates as we receive them. There has also been no significant update on the LRT discussed in the last issue but we look forward optimistically to more news on that front. For this issue, we will focus on another development that is of interest to Hamiltonians: the development of the waterfront or the West Harbour development. This is a large and exciting project that will greatly alter the look and feel of the Hamilton waterfront and has been in discussion for several years now. We will start with a general idea of the proposal and where we are in the process. The West Harbour development is a $140 million redevelopment project that will transform the West Harbour into a vibrant, mixed-use, transit-supportive and pedestrian-friendly community. It will consist of cultural, residential, commercial, and recreational uses and year-round attractions. The plan calls for more than 1,600 housing units comprised of condominium units, townhomes, and other affordable accommodations, that will be spread throughout the development. The development will also see commercial space, themed retail zones for fitness and health, a fresh food market, and an artisan village. There are also plans to create boardwalks, fish habitats, trails, and public spaces and parks. Part of the proposal will also see the redevelopment and revitalization

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of CHH’s Jamesville neighbourhood with a new 46-unit residential building. There are currently no set dates as to when the redevelopment will start or finish, but seeing as it is quite a large redevelopment plan, we suspect it will be several years before we see some real traction. At this time, the City is updating its Urban Design Study and participating in consultations. In most recent news, architect Bruce Kuwabara pitched a 45-storey signature building for the proposed Pier 8 redevelopment. The “signature” cylindrical tower would be paired with a shorter, 30-storey building. The tower would allow for more family-sized units, with a total of approximately 400 units, and on-pier parking in the planned harbourfront neighbourhood. Unfortunately, the area currently has an eight-storey height limit. The City has not yet decided whether there can be such a tall building on the site. That would require an Official Plan Amendment and a new zoning by-law amendment to be approved by Council. An urban design study will be recommending appropriate maximum building heights on harbourfront land, although City officials have long vowed it would not be used for “skyscrapers.” Any tower proposal would also need to survive public consultation. If built, the building will be the largest in Hamilton measured from base to top, but the 43-storey Landmark Place at 100 Main Street East will remain Hamilton’s tallest building in the lower City by geodetic height (height from sea level). We are looking forward to how the proposal for the waterfront develops, and how and if “skyscrapers” will fit into the plan. If so, the waterfront will see a very drastic change in the skyline and will perhaps start a trend within other areas of Hamilton.

Recent events May 13 – COVID-19 webinar: The HDAA was excited to host our first webinar in May. Mark Melchers from Cohen Highley joined us to discuss the legal issues surrounding COVID-19 as it relates to the rental housing industry. Mark spoke on a variety of legal considerations surrounding COVID-19, such as best practices, recommended protocols for visitors and deliveries, what to do in situations of rent default amid the pandemic, and the current status of the Landlord and Tenant Board. He emphasized that communication with tenants is of upmost importance during these times, as well as educating oneself on current government recommendations on best practices. Although the Landlord and Tenant Board is still not granting evictions at this time, Mark did speak to the urgent hearings that are being allowed and what the threshold is to be granted one. Mark also spoke on recommendations of what should be done if

46 | July 2020

a tenant discloses they have a positive COVID19 diagnosis to ensure the safety of both staff and other residents. Lastly, Mark spoke to the duty of care that is owed to tenants by landlords, and what to do if a tenant is not complying with health and safety protocols. June 18 – Ask the Board webinar: At our June webinar, members had the opportunity to ask questions and get answers from our HDAA Board of Directors. COVID-19, as we all know, comes with many uncertainties and problems; in these times, it always helps to know what others may be doing. There was a lively discussion on a variety of topics surrounding our new normal during the pandemic. Board members discussed their current practices in cases of non-payment and the importance of proactively communicating with tenants as well as being open and receptive to payment plans at this time. There was also discussion surrounding best practices that are being implemented, such as limiting direct contact between staff and tenants, making sure to screen service providers before they enter the building, and

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PRESIDENT’S MESSAGE

Adapting to a new reality The past few months have been challenging for everyone, including LPMA residents, owners, and associates. Staff in apartment buildings have stepped up their cleaning practices in ways that were unimaginable a few short months ago. Many are cleaning touch points hourly in lobbies, elevators, and laundry and mail rooms. Employees wear masks and gloves while working in buildings, and it’s common to see automatic hand sanitizers installed in lobbies. Showing occupied units has also become a thing of the past. Now, staff sanitize vacant units before showing them and ask prospective tenants to wear masks. While we practise physical distancing, let’s continue to find ways to stay in touch with others, thank frontline workers and acknowledge important milestones in our lives. We need to remain positive as we see the economy and local businesses slowly opening up. Please continue to stay healthy and safe.

- Shirley Criger, LPMA President GOVERNMENT FUNDS, R E PAY M E N T A G R E E M E N T S H E L P R E D U C E R E N T D E F A U LT S At the beginning of the COVID-19 shutdown, landlords were concerned that tenants would take advantage of Ontario’s suspension of eviction proceedings by withholding their rent. While organized rent strikes haven’t taken place in London, enough tenants are refusing to work with their landlords that many are at risk of losing their properties. London lawyer Joe Hoffer said one landlord has a tenant who stopped paying rent before the shutdown and hasn’t paid rent since, knowing there will be no evictions in the foreseeable future. The tenant owes more than $13,000 in rent. “A large landlord can absorb that but small landlords are the ones who can’t afford to absorb that kind of a hit,” Hoffer said. According to a survey conducted by the Federation of Rental-housing Providers of Ontario (FRPO), the general range of rent defaults in Ontario is between five and 15 per cent. In smaller buildings of 10 or fewer units, defaults increase to 18 to 20 per cent. “It’s a pretty high default rate for smaller buildings and smaller landlords, but large landlords were closer to the five to 10 per cent range,” Hoffer said. “On the other hand, landlords with luxury apartment portfolios have experienced no

noticeable decline in timely rent payments due to COVID.”

Evictions: Hoffer had advised landlords to contact residents prior to April 1 to indicate they were willing to work with them. When tenants defaulted on their rent in April and May without responding to their landlords’ requests to contact them for repayment, many landlords filed an N4 notice to terminate a tenancy early for nonpayment of rent. Filing an N4 notice places the eviction in the queue for processing by the Landlord and Tenant Board. If landlords can show that the tenants rejected their efforts to assist them, the Board will be less inclined to exercise discretion in the tenant’s favour, Hoffer said. If a tenant is employed but is exploiting the financial crisis, or has a guarantor, landlords are deciding on a case-bycase basis whether to file an L9 application to collect rent arrears only. Tenants can’t successfully dispute the landlord’s Joe Hoffer claim if they haven’t paid the rent, Hoffer said. The Board is processing L9 applications by holding telephone hearings because those hearings don’t result in an eviction order. “The Board will order a judgment for the amount of rent owing plus the filing fee of $190,” Hoffer said.

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Landlords can then try to enforce the judgment by garnishing the tenant’s bank account or garnishing wages if the individual is employed. If there is a solvent guarantor, the chances of rent recovery greatly improve, Hoffer said.

Repayment plans: Landlords began organizing repayment agreements when tenants contacted them and paid partial rent, and also applied for the Canada Emergency Response Benefit (CERB). Hoffer said some landlords have drafted the agreement so that if a tenant vacates prior to repayment of the arrears, then all arrears become due immediately. For example, if there is a six-month time frame for repayment, and tenants tell their landlords two months later that they’re leaving with little notice, landlords could file the L9 application the same day and claim all the arrears, including first and last month’s rent, and arrears that were part of the repayment program. Hoffer said that approach is far less expensive than suing a tenant who breaks the lease for lost rent in Small Claims Court.

Discounts: Some landlords are offering tenants a discount on a case-by-case basis, but Hoffer cautions them not to give a discount for more than eight consecutive months; otherwise they could breach the discount provisions of the Residential Tenancies Act (RTA). The total amount of the discount must not exceed two months’ rent. “Those are all rules under the regulations to the Residential Tenancies Act,” Hoffer said.

Students: The student sector has been hard hit as tenants vacated their units and moved in with their parents. The worst affected include landlords whose tenants are foreign students who won’t be returning to Canada. “Those landlords have had huge losses because of the shutdown,” Hoffer observed. Many students from other parts of Ontario rented a unit and decided not to move in when their classes were shifted online. However, landlords can require that tenants pay rent since the RTA states that a lease takes effect from the commencement date in the lease, regardless of whether tenants take possession. Hoffer said if students have guarantors, there’s some relief for landlords in collecting first and last month’s rent. In these cases, the lease is valid and the tenant or guarantor can usually afford to pay the rent, but an L9 can’t be used to obtain judgment because the tenant is not in “possession” of the unit, Hoffer said. In such cases, Small Claims Court is the only option. “Usually, Small Claims will not allow for recovery of the total loss and the landlord is expected to use robust efforts to rent the abandoned unit to a new tenant,” Hoffer said. “The question is, will they be able to rent to someone else? It’s not a very robust leasing season right now.”

Financial flexibility: Jason Stern, co-owner of Exclusive Rentals, said as of May 20, 3.7 per cent of the company’s May rents and 2.6 per cent of June rents, as of June 15, were outstanding. Although that percentage is a little higher than normal, it’s not as substantial as he expected. “We think the government’s programs assisted a lot of these tenants in at least covering their rents. It’s been a pleasant surprise,” he said.

50 | July 2020

Jason Stern

When tenants missed a rent payment, Exclusive Rentals discussed their financial situations with them and then asked their clients, the owners of the properties, if they could be flexible. Some owners deferred the rent, allowing tenants to pay it back over several months, while others offered a discount for a few months without requiring that tenants reimburse them.

Accommodating tenants: Laura Groshok, a licensed paralegal with Drewlo Holdings, said company representatives contacted tenants in early spring and informed them of how to apply for emergency government funding. During discussions, many tenants indicated they

“In all the cases that we’ve dealt with, we’ve been able to provide some flexibility to a tenant,” said Jaime McCauley, general manager. “We were able to solve a lot of issues by being a mediator between the tenant and the client to find a solution that would work for everybody.” Exclusive Rentals also offered to waive the three per cent fee it normally charges tenants who use a credit card.

would pay their rent when their funding or employment insurance became available. Drewlo Holdings, in turn, offered those

Laura Groshok

residents additional time to receive their benefits and pay their rent.

“Quite a few tenants chose that option,” McCauley said.

“We made accommodations to work with the

Students who had been interested in renting rooms have been waiting to see how many classes would be held on campus in the fall. If more classes are held online, Stern expects a greater loss from students refusing to move in.

actually been very smooth.”

“On a larger scale, that could become a pretty big problem. We have a few people who say they can’t move in and want their money back, but I can probably count those on one hand,” he said.

tenants on a case-by-case basis,” Groshok said. “It’s In general, she said landlords have been concerned that tenants who owed rent prior to the pandemic, and were given a reprieve from government funding, will now have a difficult time catching up. Many tenants will also be surprised when they are faced with paying their rent arrears several years down the road. For example, when a landlord

The company has been filing some N4 notices, but is also evaluating the stress on the property owners and the costs involved in going to court. In some cases, if tenants were unable to honour their lease in the long term, the company offered to list their units and find other tenants for them.

receives an order for rent arrears from the Board,

“We have to look at some situations and say, ‘What is worth fighting for and what is worth just trying to re-rent the unit?’” McCauley said.

arrears, along with their current rent, even when

its monetary value is enforceable in Small Claims Court even after a tenant has been evicted. “Tenants are going to get orders for arrears of rent and they will find it difficult to pay past rent they return to work,” Groshok predicted.

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.

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PRESIDENT’S MESSAGE In the 30 minutes it would take a person to walk or roll the 2.5-kilometre distance that University Avenue runs from Weber Street North to Westmount Road in Waterloo, they would have passed three world-class post-secondary schools. Along with many small businesses that neighbour Conestoga College (Waterloo Campus), Wilfred Laurier University, and University of Waterloo, there are swaths of student housing that will be impacted by COVID-19. With a combined student population of about 80,000 in the Region of Waterloo and an international student base of about 30,000 at U of W, student rental property owners are bracing for a September start-up unlike any they have experienced before. On Friday, May 15, 2020, the Waterloo Region Record reported that “...both universities announced that most fall courses will be held online in light of the coronavirus pandemic. What this means in terms of students staying in residence, accessing school facilities or taking part in clubs or sports is anyone’s guess. Plans are still coming together.” The article goes on to say that “(Conestoga College) President John Tibbits... expects the fall 2020 semester will continue to be delivered primarily online.” Since the onset of the provincial lockdown in March, WRAMA members have reported a few cases of communication gone wrong, with some student renters halting rental payments with months left until the end of their lease commitments. Without discussing payment plans or intentions with the management company or owner, these students and their guarantors may find themselves subject to litigation, the only option left to property owners. With many undergraduate courses moving online, rental housing providers are left wondering if vacant units will be leased through the fall. On June 2, 2020, the Waterloo Region Record reported the “...vice president of university affairs with Wilfrid Laurier’s student union, said the Student Rights Advisory Committee — which helps inform students of their rights when it comes to landlordtenant issues — has received dozens of requests from students in recent weeks for information on ways to get out of their lease agreements.” WRAMA suggests anyone considering breaking their lease agreement should ensure they understand the impact of making decisions that contradict their lease terms. The long-term impact on student rentals is yet to be seen. Although on-campus living is still being offered at UW and WLU student residences, the institutions are providing flexibility on deposit payment, single room occupancy, and enhanced cleaning protocols. Travel plans for international students continue to be impacted by COVID-19. WRAMA encourages local student rental housing providers to communicate with students and guarantors who have signed leases for September. Seek legal advice where necessary and note the Landlord and Tenant Board will be much slower in processing applications given it has been closed for months. - Andrew Macallum, President

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Data breakdown: Residential Tenancies Act & the Landlord and Tenant Board By Darlene Rehman Everyone has an opinion on the housing crisis and how it should be solved. Personally, the best way I know to solve any problem is to start with the facts. The Social Justice Tribunals of Ontario (SJTO) released a report from 2018-2019 that included real data. The number of applications received at the Landlord and Tenant Board was 73,738 from landlords and 8,357 from tenants. A quick look at these numbers shows there seems to be a disconnect. If you’re doing the math, 90 per cent of applications are from landlords and 10 per cent are from tenants. The population of Ontario is about 13.6 million. It varies between reports; however, conservatively, 30 per cent of Ontarians (or 4 million people) rent their homes. As stated, 8,375 complaints at the LTB came from 4 million renters, or 0.2 per cent (it’s not a typo). Another fact: about 6 per cent of the population owns residential rental real estate, or 835,175 people (source: Statistics Canada). Further, 50 per cent of rentals are owned by large corporations but 50 per cent are owned by Mom & Pop landlords (about 400,000). Housing Statistics Canada reported that 70 per cent (about 280,000) of landlords own two singlefamily homes (one is their primary residence). To recap, there are 4 million renters representing 30 per cent of the Ontario population filing 8,357 applications at the Landlord and Tenant Board, while landlords represent 6 per cent, or 816,000 Ontarians, and they have filed 73,738 applications. Why is this significant? The days of being able to frame landlords as the big, bad, wolf have hit a dead end on the fact track. To further my point, year after year the number one complaint from tenants is not maintenance. In 2018-2019, SJTO reported that 1,970 applications were filed for maintenance issues out of 4 million renters. Over the same time, 58,640 (76 per cent) of applications were filed by landlords related to non-payment of rent. Now most would blame non-payment of rent on low income or other socioeconomic factors but this is a naïve conclusion. Tenants passed an application process before they became renters. Their credit history was checked, tenants provided proof of income, and paid first and last month’s rent before obtaining their rental home; they were chosen based on these factors. Further, many agencies have a mandate to provide interest-free loans, rent forgiveness or other types of monetary support to keep tenants from the eviction process, but they cannot house a tenant who is determined not to be housed, and doesn’t prioritize paying rent. In the same report, Co-operative Housing groups sought to evict 563 tenants for non-payment of rent. If you recall, 70 per cent of small landlords own two single-family homes. These landlords are the backbone of the rental housing industry. In the beginning, these entrepreneurs looked forward to providing safe, quality housing, but they have become disenchanted by the reality of nonpaying tenants – 58,640 in fact. At the same time, even before COVID-19, the Landlord and Tenant Board is not meeting its standards in the length wait for a hearing after an application of non-payment of rent is filed (which cannot be filed until 14 days after the rent was due). In Cambridge, Kitchener-Waterloo, Guelph, and surrounding areas, 73 days is how long it took to receive a hearing – actually three months with the 14-day wait period. A hearing date of three months in the future is provided, while the mortgage meter runs. Once the date arrives, the adjudicator has 30 days to render a verdict, and the mortgage meter runs. Once the order arrives, the eviction cannot take place for 11 days, as the mortgage meter runs. On day 12, the Sheriff can be booked which, due to a backlog of evictions, can drag on for as long as six weeks, all while the mortgage meter runs. Eviction day is wait day – another 72 hours as the mortgage meter runs. There is no such thing as a fast track eviction in Ontario. The scenario I presented could take four to six to run, before COVID-19, and

54 | July 2020

may now take ten to 12 months or longer now due to the shutdown of the Landlord and Tenant Board due to COVID-19. There are only a few outcomes for the landlord with a non-paying tenant. Option 1 is to absorb the loss and live to rent another day by using personal savings to pay the mortgage, and hire a property manager who selects a better tenant. Option 2 is to sell. Option 3 is to lose the rental and maybe your home in the process. None of these options are appealing, and none of them results in the financial return wanted and needed by small landlords. Each sale by a landlord who has thrown in the towel means one less rental for the 4 million people who need it. And the housing crunch gets a little tighter. Now that the problem is before us, let’s describe three steps that will help landlords, tenants, and taxpayers. • Step 1: Under the Residential Tenancies Act, the rent is due on the first day of the month, so there should be no mandatory delay, and minimal delay to process a case. A landlord should be able to file the day rent becomes late, and the Board should contact the tenant within seven days to see if they dispute the claim. After that, the tenant and landlord should be contacted for a telephone mediation session where both parties work together to salvage the tenancy. If

the tenant fails to meet the agreed conditions, an eviction order should be awarded. • Step 2: The rent for OW and ODSP recipients goes directly to the landlord, and the payment direction cannot be altered. • Step 3: Orders are given to both the landlord and tenant immediately after the decision is made at the hearing. The current system of allowing 30 days for an adjudicator to render a decision allows more time for both parties to leave unsatisfied, with no resolution for an unnecessary period of time. These are just three small steps; however, since the LTB received an astonishing 58,640 applications from landlords related to nonpayment of rent, this is a serious matter. All by itself, the problem of delay is removing muchneeded housing. Just this change will alleviate the risk of landlords not being able to pay their mortgages. Providing an order upon the decision at the hearing expedites the eviction process, and would give confidence to those sitting on the sidelines. My hope is that peeking at the underbelly of the housing crisis will show how things have progressed, as well as the result and solution. The facts speak volumes. Only when we acknowledge the issues can solutions be found.

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

The official publication of:

RENTT:

The rental housing market in a post-COVID-19 world

PRESIDENT’S MESSAGE Landlords across Canada are dealing with the consequences of COVID-19. On the two pages that follow, we address some practical issues in re-opening, and two positive changes to the federal relief programs that apply across Canada. This page covers issues particular to the City of Ottawa. Besides making the waste handling changes described below, the City plans to bring in its new rental regulations effective at a date after May 1, 2021. Those regulations will require enhanced information for new tenants. On a one-time basis, landlords will need to give all tenants a new information package. For buildings of 10 units or more, landlords will need to record a capital maintenance plan for the building. EOLO will provide more information about what is required in due course.

- John Dickie, EOLO Chair

Recent changes in City of Ottawa solid waste charges and handling For more than five years, the annual waste handling charge from the City of Ottawa for bin collection was $43 per unit. As of 2020, that charge has increased to $56.50 (an increase of $13.50). For curb-side collection, the charge has increased from $88 to $96, an increase of $8. For 2021, the bin collection charge will increase to $68 and the curb-side charge will increase to $102. These charges reflect the costs in the new solid waste collection contracts that were recently awarded because the waste collection charges are set on a cost recovery basis. The City engaged with the multi-residential community in May and November of 2019. Feedback from the property owners who participated in the working group meetings was incorporated into the new contract requirements. Property managers reported that handling recyclables was problematic for several reasons, related to both tenant behaviour and the work needed at buildings. To address the concerns about work at the buildings, the City added several new items to the contract. Those additions, along with inflation over the last five or six years, resulted in the cost increase reflected in the solid waste charges. The new services include: • Collection of organic material from multiresidential properties Instead of building staff needing to take green bins to the curb (and retrieve them later), the solid waste contractor will collect the bins from a centralized location in or adjacent to the building (and return them).

• Collection of bulky/large items from multiresidential properties Similarly, instead of building staff needing to take bulky/large items to the curb for collection, the contractor will be required to collect the bulky items in a centralized location in (or adjacent to) the building, where on-site storage space permits. • 360 litre plastic wheeled garbage bins at pad collection sites The inclusion of smaller 360 litre plastic garbage bins should make waste collection activities easier for building staff. These bins will be collected from a centralized location in (or adjacent to) the building. In conjunction with the recent enhancements to the green bin program that reduce odours and mess by allowing organics to be placed in plastic bags, City staff believe that these service adjustments are a step in the right direction to helping multi-residential properties more effectively manage their organic waste.

New Solid Waste Master Plan The City is creating a new Solid Waste Master Plan in consultation with all stakeholders, including rental providers and EOLO. To extend the life of the landfills and save the expense and difficulty of siting a new landfill in Ottawa, everyone needs to up their game on waste reduction and recycling. That includes rental housing providers and tenants, especially since the multi-res sector lags behind home owners in recycling. (Residents of multi-residential units tend to produce less total waste than single family homeowners, but a much lower proportion of the total is recycled and diverted from the landfill facilities.)

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Re-opening issues for rental housing providers Canadian provinces are in various stages of re-opening, loosening their COVID-19 restrictions. Moving forward, landlords should make changes to the way work is done, following the guidance issued by public health authorities and provincial governments. Within Ontario, different cities are at different stages. Entering rental units If repairs are needed in a unit, neither the repairperson nor the tenant should have any symptoms of COVID-19. A self-assessment test for COVID-19 symptoms can be found at covid-19.ontario.ca. Landlords should check that each employee and each contractor has not travelled recently and has no COVID-19 symptoms before allowing them to enter a tenantâ&#x20AC;&#x2122;s unit. Just as for showing occupied apartments, when doing repairs, everyone is required to maintain physical distancing (staying at least 2 metres away from other people) whenever possible. Given that restriction, it is reasonable for landlords to ask tenants to leave their apartments for repairs to be done. If the tenant cannot leave the apartment, the landlord should ask that the tenant stay out of the room where the repair is being done. If physical distancing cannot be maintained for some reason, then both tenant and repairperson should wear non-medical masks because COVID-19 can be spread by people who have no symptoms and do not know they are infected. After the repairperson leaves, the tenant should clean and disinfect all surfaces in any room the repairperson entered. The same applies for rental showings. Amenities In Ottawa, and most locations in Ontario, building amenities are being allowed to re-open. For example, indoor and outdoor pools are allowed to open, although with significant sanitation and physical distancing requirements. Locker rooms, change rooms, showers, washrooms, and any equipment provided to pool patrons are to be cleaned and disinfected frequently. Landlords should identify all high-touch surfaces and clean and disinfect them at least twice a day. If a landlord is not able to clean and disinfect showers and change rooms that often, then the rooms should be closed. Any equipment and toys that are not smooth and easy to clean should be removed from use. Landlords should expect similar requirements for other amenity areas when they are allowed to open. Common areas Increased cleaning and disinfection should continue, especially of high-touch surfaces, like common area door handles, light switches, counters, handrails, and elevator buttons. Landlords should also put up guidance signage in common areas and amenity spaces about COVID-19 hygiene requirements, physical distancing, and mask wearing. Provincial governments and public health authorities have posted signs on their websites, which landlords should post in their buildings. Tenants and employees should maintain a 2-metre distance from other people, and wear non-medical masks in shared spaces such as lobbies, elevators, hallways, essential facilities like laundry rooms, and any area where it is difficult to maintain physical distancing.

58 | July 2020

COVID-19 financial relief CERB update The CERB has been expanded so that eligible recipients can now receive the benefit for up to 24 weeks, an extension of 8 weeks over the original 16-week eligible payment limit. Landlords with outstanding rent arrears may want to inquire politely if tenants have applied for and received their CERB money, and encourage the payment of the rent from that money. Landlords may also want to make sure tenants know they need to reapply for CERB every four weeks. Originally, a person had to have lost all their income to qualify for the CERB, but that was changed so that a person can earn up to $1000 over a four-week period and still qualify for the $2000 CERB payment. For more information, visit https://www.canada. ca/en/services/benefits/ei/cerb-application.html.

Mortgage deferral Property owners facing financial hardship may be eligible for a mortgage payment deferral of up to six months. The deferral agreement is between the property owner and the lender.

CEBA update Under the Canada Emergency Business Account program, small businesses can obtain an interestfree loan of $40,000, which they can clear by repaying $30,000 by December 31, 2022. If the repayment is not made, the full loan will need to be repaid over several years with interest at 5%. Until recently, the CEBA loans were only available to businesses with payroll of $20,000 to $1.5M, and the business must have had a business bank account as of March 1, 2020, and a federal tax

registration. The requirement for that payroll and a business bank account left most small landlords ineligible for the CEBA loan. By the time you read this, businesses with a payroll of less than $20,000 (or no payroll at all) should be able to apply, under what is to be known as the Eligible Non-deferrable Expenses Stream. A few enterprises are excluded, but landlords appear to qualify. Applicants are required to have: • Filed a 2018 or 2019 tax return; and • Eligible non-deferrable expenses of between $40,000 and $1.5 million. (That should include scheduled mortgage payments, property taxes and utilities.) CEBA applications under the Eligible NonDeferrable Expenses Stream will follow a two-step process: Step 1: The business applies at the financial institution where they have their primary business chequing/operating accounts. Step 2: Applicants will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application. The deadline to apply is August 31, 2020, but landlords who wish to apply, should apply as soon as possible. For more information, visit https:// ceba-cuec.ca/. Information about COVID-19 is evolving very quickly. Landlords and residents should check for the most recent health information available, at Ontario.ca/covid or at the Ottawa Public Health website. People should also check for the latest information about COVID-19 financial relief at the websites given in the text above.

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 | 59

Final Take Away

Brought to you by Yardi Canada Ltd

Pandemic-resistant tech for multifamily firms Historically, Canadian multifamily real estate firms have been hesitant to implement new technologies such as automated systems and integration with the Internet of things (IoT). Recent events, however, have changed the status quo. To remain viable now and in the future, multifamily housing providers must make the shift to tech that removes touchpoints and limits face-to-face interaction. Here are some insights on how tech can help, taken from a recent interview with Peter Altobelli, Vice President, Yardi Canada Ltd. Lasting technology for flexible work environments Altobelli advises managers and owners to invest in tools that help them reach financial commitments, especially rent deferral and collections. “Several Canadian businesses need proper reporting structures to allow for easy and accurate reporting to financial institutions. You also need to be able to manage rent deferrals and collections over longer periods,” he says. Secondly, office automation and vendor management technology minimize in-person, site-specific interactions. Mobile-ready back office support for accounting teams includes full extension of portals that allow vendors to connect with businesses online for issuing payouts and work orders, uploading their invoices, issuing requests for proposals and RFP responses, and vendor compliance.

Automated technology can assist businesses through the application process. Businesses can set rules within resident screening software to identify quality tenants for their properties, including fraud and credit reports, as well as adverse social media reports. The system can then send out a lease to the approved resident for an electronic signature. Automation continues once that resident moves in. The program transforms prospect files into resident files that integrate with a client-facing portal. Residents can stay connected with leasing agents and property managers, submit maintenance requests, and make payments, via CASL compliant tools. Altobelli says, “Everything that we’ve discussed can be seamlessly integrated and will allow you to create a contactless lead-to-lease experience.” Returning to (a new) normal “COVID changes many of our processes,” reflects Altobelli. “Currently, technology such as online portals honours social distancing between residents, applicants, and staff. The Canadian real estate industry needs to leverage technology to help not only accelerate these transitions but maintain physical distancing once we begin to return to office settings.” Technology will continue to help managers reallocate workloads amongst staff members. “If a staff member is absent for any duration of time, you can transition responsibilities between employees regardless of their location. Simply reset certain priorities and security permissions within the technology.”

Businesses will also need to consider changing their marketing strategies that will enhance their online presence, search engine results, and customer care. By optimizing online marketing, businesses can remain competitive while minimizing marketing spend and adhering to social distancing practices.

Businesses are evaluating how telecommuting impacts productivity and whether remote work is sustainable. Potentially, businesses can reduce overhead costs on office space and supplies while employees reduce commute times, costs, and potentially improve their work-life balance.

Virtual tours and self-guided tours have proven to be the most responsible way to get familiar with a property. These technologies reduce interpersonal engagement while delivering a customizable experience.

“At this point, businesses may have a few months of data that they can analyze and make the best decision moving forward. What we know for certain is that the way we used to work for the last 20 to 30 years is no longer adequate,” says Altobelli.

60 | July 2020

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