Property Management Skyline’s Tenant Assistance Program

Helping Residents R.I.S.E Above Skyline’s unique tenant assistance program

by Erin Ruddy With more than 200 properties across eight provinces, Skyline Living has welcomed tenants from all walks of life and been privy to the countless circumstances that can lead to financial distress. From sudden illness, to divorce, to the current global pandemic, times of misfortune are inevitable.

For this reason, the company launched a unique tenant assistance program in 2018, now called R.I.S.E. (Reach, Impact, Support, Elevate), which uses mediation and financial aid to assist those affected by income loss through no fault of their own. In its first year of operation, the program helped more than 150 struggling tenants skirt eviction and remain in their homes.

“We have a responsibility to help our tenants, especially when they fall on hard times,” says R. Jason Ashdown, Co-Founder and Chief Sustainability Officer, Skyline Group of Companies. “Without our tenants—our customers—we wouldn’t be in business.”

On June 25, 2020, the firm was named Rental Housing Provider of the Year by the Canadian Federation of Apartment Associations (CFAA) for the ongoing assistance it provides to hundreds of tenants. In 2019, Skyline effectively reduced its total evictions by 25 per cent and saved $400,000 in lost rent, vacancy, legal fees, and eviction costs. “The math doesn’t lie. We are saving homes, and the investment is paid back tenfold,” Ashdown says.

Among the tenants who’ve benefitted from the R.I.S.E program are a man who suffered a heart attack; a woman recovering from a car accident; a cancer patient; a mother fleeing an abusive relationship; and many more. And now, as COVID-19 continues to disrupt the lives of all Canadians, Ashdown says the program has seen a significant rise in applicants.

“We launched our program in late 2018 from the simple standpoint that it is the right thing to do,” he remarks. “We were offering tenant assistance and saving homes long before COVID-19, and we’re thankful the program was already in place when the pandemic happened, and we were able to hit the ground running.”

Ashdown urges other landlords to consider implementing their own similar programs— particularly as Bill 184 continues to stir up controversy in Ontario, with many tenant groups fearing a surge in evictions is headed our way.

“Skyline Living has always believed in finding solutions that promote conversation, mediation, and relationship building between tenants and their rental housing providers,” says Ashdown. “In part, Bill 184 will improve the landlord-tenant mediation and resolution process. Our internal Tenant Support Team [which facilitates the R.I.S.E. program] was built several years ago for that exact purpose; the team is empowered to assist our tenants in finding any number of resources they may need should they fall upon difficult times. In our years of experience as a rental housing provider, we understand that we and our tenants want the exact same things – well run, well maintained, safe and enjoyable buildings to live in.”

How the program works:

R.I.S.E. is open to any of Skyline’s 50,000+ tenants across Canada who have fallen on hard times and are in need of support— whether it’s financial relief, patience or direction. Steps include: • Working with the tenant to assess their specific needs; • Putting together a Community Resources

Package to direct the tenant to any external resources that may provide financial relief or support; • If outside resources do not provide sufficient support, Skyline helps the tenant complete a Relief Fund application; • If the R.I.S.E Committee approves the application, that tenant is provided a predetermined relief funding package.

What’s impacting insurance rates? It’s not all about COVID-19

by Andy Schwartze

With all of the attention paid to COVID-related issues, we tend to get distracted from the fact that “other things” are happening. Nasty weather events, for instance, are beginning to wreak havoc across the continent. On June 13, there was a serious hail, rain and wind storm that impacted central Alberta. It didn’t make much of a headline in the east, but expert predictions now estimate that insurer bank accounts will be lightened by some $1,300,000,000 in claims payments. It doesn’t take much to give the property/casualty insurance club a 10 figure headache.

Meanwhile in the U.S., we already saw a high altitude sand storm emanate from the Sahara Desert and head all the way to the Gulf Coast. Who would have known? And just as hurricane arrived, elevated levels of political unrest have resulted in unexpectedly high inner city insurance claims from the destruction caused by violent protesters. With some copycat Canadians entering also that arena, all of this has had an impact on insurance rates.

As for COVID developments, the action here in Canada is just beginning. According to the Insurance Institute, law firms Koskie Minsky and Merchant Law are starting their class actions against insurers. Details are still somewhat vague but we all knew it was coming—and now we can only wait and see what form the onslaught will take. In the U.S., by mid-July, some 500 class action lawsuits had already begun—many initiated, no doubt, with the backing of eager investors, rubbing their hands with glee in anticipation of either big wins or insurers rolling over with volunteer settlements just to “make the problem go away.” Insurance companies are not often welcomed in court

“If your building is over 25 years old, there is a good chance that the age of the roof, plumbing, electrical, heating and window systems may be questioned.”

and do what they can to stay out. That’s how things roll in a legal system whose even keel has become somewhat wobbly.

Insurance renewals

Many apartment owners have already experienced the unpleasantness of an insurance renewal negotiation. It is worth explaining how the insurance world circles the wagons in order to protect its balance sheets. Let’s take an example of a typical high-rise apartment building and the historical evolution of its insurance costs. We often have to remind our clients that, back in the 1980s, a typical high-rise apartment building insurance rate was about 5 cents per $100 of coverage. So, using replacement cost as a guide, a building insured for $2,000,000 would pay a building insurance premium of $1,000. Every year, as the cost of labour and materials quietly rose a bit, the insurance amount would be adjusted, perhaps in this case by 2.5%. The premium would also rise by that 2.5% so that the “insurance pool” could keep up with slowly rising repair costs.

But two important things have happened since the 5 cent rate became so entrenched. Interest rates have plummeted, thereby robbing insurers of the interest income that big pools of premium once used to generate. Typically, a premium dollar sits in an interest bearing account for about three years. Having $100 earn $7 a year ($21 over 3) makes a huge difference to an insurer’s bottom line. In the current interest rate environment that $21 “bonus” is probably not much more than about $4.50. The impact is significant.

The second important thing that has happened is the quietly expanding coverages provided by the more modern policy wordings. We can certainly blame insurance brokers for having played a significant role in the expansion of coverages as they continue to jockey for the approval of their clients. To some extent insurance consultants who have worked for commercial lenders have been involved, but it has been primarily the insurance brokers. This broadening of coverages has resulted in a significant widening of the safety net provided by an insurance contract. Readers need only to look at their own residential polices to quickly realize how these have changed over the years.

So, while the increasing of coverage amounts every year has kept premiums growing along with the rising cost of labour and materials, the widening of the coverage net, once handily subsidized by juicy interest rates, now has to be funded by the policy holder. The 5 cent rate has become a dinosaur, after decades of survival, and rates are now being raised to deal with this reality. Add in the impact of weather, fraud, COVID and any number of other factors, including global events that impact us all, and it becomes obvious that premiums will certainly not be going down. In fact, they are rising sharply as reinsurers grapple with these many changes. Insurers who realize that rates need to change will tacitly avoid quoting one another’s business. Suddenly competition vanishes as each carrier reviews and reprices its portfolio, free from the fear of having its portfolio raided.

One possible area in which we might expect some relief is tort reform. Regrettably, that initiative comes with a large dose of politics. We have not yet seen the political courage to reform auto insurance in horribly expensive jurisdictions like Ontario— one can scarcely imagine the legal community’s outrage should any attempt be made to put reasonably designed parameters in place to keep litigation from, at least, exploding even more. One should not be too hopeful.

In this very defensive underwriting world, the advice to owners of apartment buildings is very straight forward. If your building is over 25 years old, there is a good chance that the age of the roof, plumbing, electrical, heating and window systems may be questioned. Wisdom dictates that you focus on upgrades, as buildings that went up in the 60s are now over a half century old. If your building is a low rise of frame construction, you are in the “least attractive” category. Physical damage losses to frame structures cost more to repair/ replace for numerous reasons. Consult with your insurance broker/ risk manager and understand that the insurance world, at least for now, is in a sour mood.

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