CAM Sept/Oct 2023

LEGACY OF SEN ÁḴW

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REMEMBERING THE PAST

The month of September marks the back-to-school rush for many, but it also holds a greater significance across Canada: honouring the children who never returned home from residential schools, and the survivors, families and communities still impacted by the tragic and painful history.

Both the National Day for Truth and Reconciliation and Orange Shirt Day take place on September 30th. While Truth and Reconciliation Day is a federal statutory holiday introduced by Parliament in 2021, Orange Shirt Day is an Indigenous-led grassroots commemorative day intended to raise awareness of the individual, family, and community inter-generational impacts of residential schools, and to promote the concept of “Every Child Matters”. The orange shirt is a symbol of the stripping away of culture, freedom and self-esteem experienced by Indigenous children over generations.

In celebration of Indigenous culture and economic resilience, our September cover story showcases an amazing mega-project currently underway in Vancouver. Called Sen áḵw, it is one of the largest low-carbon residential and Indigenous-led real estate developments in Canadian history. But more than just an impressive real estate venture, Sen áḵw, is anticipated to generate upwards of $10 billion in revenue for the Squamish Nation over its 100-year lifespan from rental income alone. Read all about it in our cover story on page 18.

In this issue we also look at ways to improve your insurance rates, new market trends and dynamics, and tips for future-proofing your rental property to appeal to life-long renters.

As the fall chill settles in the air, we wish you continued health and happiness through the autumn season and invite you to reach out with story ideas for consideration in our last issue of 2023.

Sincerely,

Erin Ruddy

rent trends

SEPTEMBER DATA FROM RENTALS.CA:

Average asking rents in Canada increased 1.8% monthly and 9.6% annually to reach a record high of $2,117

Vancouver is still the most expensive city to rent a home in Canada, followed by Toronto

Editor Erin Ruddy

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Studios recorded the fastest month-overmonth rent increase of 2.4%

Alberta was the provincial leader for annual rent growth with average asking rents up 15.6% since August 2022

Quebec had the second highest annual rent growth in Canada at 14.2%

16 THE FUTURE OF RENTAL PROPERTIES IN CANADA

What’s driving change in the market by John Tweedie

24 CANADA’S ENHANCED GST RENTAL REBATE PROGRAM

A “game-changing” step toward ending the housing crisis by Erin Ruddy

The Rental Market: Q3 2023

Demand continued to outdistance supply in Q3-2023, resulting in downward vacancy pressure. According to Keith Reading, Director of Research at Morguard, rents rose to record-high levels across most of the country.

“Many renting households were forced to stay put in their current premises, with the cost of ownership remaining prohibitively high,” he said. “The combination of elevated levels of inflation and high interest rates effectively priced many out of the ownership market.” Meanwhile, high levels of international immigration continued to drive demand for rental accommodation, with many international students

struggling to find homes for the fall semester. Market conditions continued to tighten into September, with vacancy holding in the low single digit range in most regions across the country.

INVESTMENT MARKET:

Multi-suite residential rental properties remain a prime target of

New & Notable Transactions

Source: Morguard

various investment groups. That said, activity levels remained muted, given the high cost of debt and economic and financial market uncertainty. At the same time, relatively few large portfolios were made available for acquisition, which was also a factor in the transaction volume decline.

“Investors continue to exhibit interest in acquiring stabilized properties, given the sector’s healthy long-term outlook,” said Reading. “Investment activity levels will remain muted over the near term, given the relatively high cost of debt capital and an uncertain economic backdrop.”

The Student Housing Pipeline

The student housing market in Canada is always a hot topic as September rolls around, but this year the situation seemed more dire than ever. With skyrocketing rents and demand outstripping supply, the inability for many Canadian and international students to find suitable off-campus housing dominated back-to-school headlines.

“The student housing market has experienced varying degrees of housing supply challenges across different regions,” said Atiya Khan, Director, Marketing & Communications at Hazelview Properties. “While it’s important to note that housing supply challenges can be dynamic and subject to change, certain major cities with prominent universities, such as Toronto, Ottawa, Vancouver, and Montreal, have historically faced significant housing supply challenges.”

Significant indeed—so much so that the federal government floated the idea of implementing a cap on international students to ease mounting pressure on the rental market. This, however, is not something universities and colleges supported given the significant loss of income it represents to their institutions. Last year, Canada reportedly welcomed 800,000 international students, paying substantially higher tuitions and contributing billions toward Canada’s economy.

“Canada’s universities provide world-class education and attract top talent from across the globe to study at our institutions,” said Lisa Wallace, Assistant Director of Communications at Universities Canada, in a rebuttal statement. “Recent comments conflating international students and the housing crisis are deeply concerning to Universities Canada and our members. International students bring important knowledge, diversity and skills to our campuses, communities, and workforce. We must continue to welcome them to study at Canadian universities.”

But hope is on the horizon given the opportunities the supply

deficit represents for those looking to fill it, and developers and investors are rightly taking note. According to Cushman & Wakefield’s 2023 Student Housing report, “strong demand, investor interest and growth in the sector through private and public partnerships” are contributing to a positive long-term outlook.

Published in April, the report revealed that Canada has 155,000 student housing beds in both university-owned (on-campus) and privately-owned (off-campus) properties spread throughout the 24 largest markets, representing 16 per cent of full-time students. For context, the top 175 American universities can house roughly 22 per cent of undergraduate students in on-campus housing, with purpose-built student accommodations (PBSAs) accounting for another 30 per cent. While Canada is lagging compared to the US and many European markets, data shows that the PBSA development pipeline is growing with significant demand and investor interest expected to feed it well into the future.

Student housing facts & figures:

• Of Canada’s 155,000 current student housing beds, roughly 52,600 beds are located in privately-owned, off-campus student residences (PBSAs).

• In 2022, Cushman & Wakefield tracked approximately 5,800 new beds in British Columbia, Ontario, Quebec, and Nova Scotia

• Of the 25,700 beds currently in development for both university-owned and privately-owned student properties, roughly 7,100 beds are scheduled for completion in 20232024, another 10,300 in 2024-2026, and the remaining 8,300 beds are in the planning stages.

• A common trend in recent developments is a shift towards a mix of young adult and student tenants, which allows developers to market to a larger demographic. These developments typically include a larger proportion of 1- and 2-bedroom units.

Housing Supply Shortages in Canada

Inside CMHC’s latest report

In CMHC’s latest housing report entitled, “Canada’s Housing Supply Shortages”, analysts took a closer look at the gap between supply and demand to determine how much additional housing supply is needed to achieve housing affordability by 2030.

Building off data released in 2022, the new report digs into the shifting economic and demographic conditions that have impacted housing demand projections since last year; this includes ongoing slowdowns in the economy following the pandemic and demographic changes due to population movement. While there is a decrease in projected housing

demand in some areas, such as Ontario, CMHC is sticking to its previous estimate of 3.5 million as the optimal number of additional homes needed.

“This report again highlights the crucial role of increasing housing supply if the goal is to make housing affordable for everyone in Canada,” said Aled ab Iorwerth, Deputy Chief Economist. “It also demonstrates the importance

of examining both economic and demographic variables given the recent changes that have been experienced in both.”

Supply gaps between provinces

Evolving economic and demographic trends have led to a shift in the supply gaps between the provinces; they represent the difference between

antic ipated housing supply and the demand for housing if prices were affordable. While Ontario and British Columbia continue to have the largest portion of the 3.5 million housing supply gap—around 60 per cent according to CMHC’s latest projection—they also have the least affordable housing markets because housing supply hasn’t kept up with demand over the past 20 years in some of the major urban centres.

Meanwhile, higher projected economic growth in Alberta and Quebec has caused the supply gaps in these provinces to increase. According to the latest data, Quebec (once considered affordable), has become less affordable, indicating the need for more housing in the coming years. And while other provinces still have housing that’s affordable for households with an average disposable income, lowincome households still face significant challenges in accessing affordable housing throughout Canada.

RCFi helps bring much-needed housing to Vancouver

on Evolve was completed in August 2022 and the project is fully leased.

Mundell House, located at 6038 Birney Avenue near UBC, offers 136 rental units for faculty and staff, and is now fully leased. This project received a $46.4 million RCFi low-interest loan from the federal government through CMHC, while UBC contributed $23.6 million in land equity.

In early September, the Government of Canada announced it provided $150 million in fully repayable low-interest loans through the Rental Construction Financing Initiative (RCFi) to bring 364 purpose-built rental units to market in Vancouver. The announcement took place at “Evolve”, located near the University of British Columbia at 3518 Wesbrook Mall.

“We are working with all levels of government, non-profit organizations and with the private sector to increase housing supply,” said Sean Fraser, Minister of Housing, Infrastructure and Communities. “Through strategic investments, like the one announced today which will help build 364 purposebuilt units in Vancouver, we are helping to increase housing supply across Canada so that all Canadians have a safe place that they are proud to call home.”

The three new projects announced include Evolve, Mundell House, and 19 on the Greenway.

Evolve is a Passive House project comprised of 110 rental units for UBC faculty and staff. It received a $44.2 million RCFi low-interest loan from the federal government through the Canada Mortgage and Housing Corporation (CMHC) and $3.5 million from Natural Resources Canada. UBC contributed $15.1 million in land equity. Construction

Located at 3619 and 3681 Arbutus Street, ‘19 on the Greenway’ will be developed into two separate rental buildings and will offer 118 units for Vancouver residents. The project received a $59 million RCFi low-interest loan from the federal government through CMHC, while PCI Developments contributed $30.7 million in cash equity. Construction is expected to complete in March 2025.

“From young students moving out for the first time, to families moving into a new community, to seniors downsizing, Canadian renters of all ages are impacted by shortages and rising costs of housing,” said Joyce Murray, Member of Parliament for Vancouver Quadra. “Through investments in projects like [these], our government is increasing the supply of new rental developments that are accessible to public transit and offer the option to live closer to where they work or go to school.”

The RCFi provides fully repayable low-interest loans to encourage the construction of more purpose-built rental housing for middle income Canadians. It is one of several programs and initiatives under the National Housing Strategy designed to help address housing needs across the housing continuum.

For more information, visit: www.placetocallhome.ca

Growing labour and material costs

Housing projec ts in Canada’s pipeline have declined slightly from last year’s estimate (18.6 million) coming in at 18.2 million units. The main reason for this decline is the shortfall in housing construction. This has led to a significant gap between the projected supply and the estimated demand. Ultimately, to achieve housing affordability for everyone in Canada, CMHC says approximately 22 million housing units would be needed by 2030. This includes the 18.6 million that will be available anyway, plus the additional 3.5 million units.

Factors contributing to this year’s lower supply estimate

From rising labour and material costs to challenges in securing credit due to rising interest rates and tightened borrowing conditions, the reality is that fewer projects are getting underway. Like last year’s report, CMHC calculates affordability based on how much of a household’s income is needed to buy a house. The goal is to make housing costs more affordable by 2030, similar to the market conditions in 2004, before prices surged and housing costs were lower relative to income.

“We continue to work on improving our understanding of the drivers of housing demand and supply,” the report stated in its conclusion. “We’re working on incorporating into our analysis the impact of population mobility across regions and provinces. We’ll also seek to provide greater detail on the number of rental units needed to reach affordability and on the distribution of impacts across income quintiles. We expect these results to be available early next year.”

For more info, download the Housing Supply Report at: cmhc-schl.gc.ca

ARE YOU CONTEMPLATING THE SALE OF YOUR APARTMENT PORTFOLIO/PROPERTY?

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• Who will represent your best interests?

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If you have an interest in purchasing Multi Residential Properties, we currently have a number of available opportunities.

For more info, please contact:

David Montressor

Vice Chairman Sales Representative (416) 815-2332

david.montressor@cbre.com

Tom Schuster

Associate Director Sales Representative (416) 847-3257

tom.schuster@cbre.com

“The goal is to make housing costs more affordable by 2030, similar to the market conditions in 2004, before prices surged and housing costs were lower relative to income.”

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How technology and consumer preferences are shaping the market

by John Tweedie

Throughout the past century, the rental market in Canada has undergone significant changes. According to an Urban History Review report on Toronto rental properties in the early 20th century, apartment buildings were viewed unfavourably for their distinct lack of privacy and for being “aesthetically and economically suspect.” But that’s no longer the case today.

For mo st Canadians in 2023, rental properties are seen as a viable alternative to homeownership and have lost many of their negative connotations. Modern-day rental properties are bigger and brighter, and for the most part, better maintained. They give residents the privacy of a home without the costs and stresses of traditional homeownership. In fact, data shows that both the Millennial and Gen Z generations are trending towards renting permanently rather than choosing to invest in a home.

The Future of Rental Properties in Canada 1.

managers keep their rentals at the forefront in the coming decades? And what changes can be expected in consumer preferences as we move into 2024 and beyond? Ultimately, it all comes down to understanding market dynamics and ensuring your building keeps up with changing technology.

Smart tech must-haves

their homes—a number that’s expected to increase in the coming years. So, how can you adapt your rental property to fit this growing expectation? Here are a few technology trends to track and integrate in the near-term:

Considering the evolving perspec tive on rental properties, how can property

Just like every industry today, the apartment sector is heavily influenced by technology. According to a recent survey from Rent Research, 82 per cent of renters said they want at least one smart device or system in

Keyless entry systems: Keys and key fobs are quickly becoming a technology of the past. People don’t like having a lot of items to carry around, especially with technology making it possible for things to be more seamless. Expect mobile phone, passcode-based, and facial recognition entry systems to become more widespread over the coming years.

tenants will soon be a must. Getting ahead of the curve and becoming known for EV charging early is an excellent way to stand out before the mandate comes into effect.

Must-have amenities

Renter preferences in terms of amenities differ from tenant to tenant, but one thing that can be predicted is that rental properties with amenities stand out from the crowd. Here are some of the mainstay amenities known to draw prospective residents:

1. 2.

Fitness centres: Physical fitness is a priority for most individuals today, but finding the time to get to the gym isn’t always easy. Rental properties with fitness centres on the premises are known to attract potential tenants. They are consistently rated one of the top 5 amenities renters are looking for, and that likely won’t change in the future.

Smart locks: Many homeowners are buying smart locks and retrofitting them to their homes, so it stands to reason that apartment buildings will soon be offering this technology as a security staple too.

AI integration: AI isn’t just a fad; it has many ramifications for the future of business. It is making countless processes quicker and more accessible throughout or ganizations. Potential uses include tenant reliability studies, improved leasing and man agement processes, and predictive building maintenance and cleaning algorithms. As AI technology evolves, so will its uses for prop erty management.

Package management: As Ecommerce and online shopping grow in popularity exponentially each year, renters 2. 3. 4.

EV chargers: The government of Canada’s EV Mandate requires all new passenger vehicles sold in Canada after 2035 to be electric zero-emission vehicles. This means offering EV charging stations to

are having more packages delivered to their homes. Having an effective package solution to limit theft and damage, and safely store packages, is an amenity some can’t do without. Solutions such as an Amazon package locker can significantly assist with this and stand out to renters as a security perk.

Outdoor space: In 2023, many workers remain fully remote, while others prefer a hybrid approach. Either way, with more time spent at home it’s vital to offer plenty of space

for residents to escape their desks. Outdoor amenities such as shared picnic spaces, barbecues, community gardens, walking paths, and bike trails have become more valuable than ever.

Sustainability features: This is an extensive category, and it’s becoming increasingly important with each new year. A 2022 study of more than 2,000 renters found that two-thirds said they want green and energy-efficient homes. This can

NEW SHOWROOM

include features like smart thermostats, solar technology, EV connectivity, or even electric bike-sharing programs.

Community connections

By and large, renters today want to feel part of a community and connect with others in their rental property. A recent study found that renters offered a minimum of five community connections in their building were more likely to renew their leases. That doesn’t mean everyone wants to be social with their neighbours, but having the option for those that do is a definite selling point. Here are some ways to bring your residents together and build a sense of community:

Offer co-working spaces: For those working from home, communal coworking spaces provide a great way for remote workers to break the monotony of being alone and mingle with others without leaving the property.

Neighbourhood connectivity: As much as your building is a community of its own, it is also part of a larger neighbourhood filled with shops, restaurants, hair salons and other services. By promoting and working with your retail neighbours, you’ll be building that sense of community for your residents.

Social events: Though not every resident will partake in social events, many like the opportunity. Hosting regular on-site events such as barbeques, holiday parties, or group garage sales, can be an effective way to build community and ensure your residents feel well-connected.

Predicting the future of rental properties is a tall task, with technology and consumer preferences changing every day. But one thing that will never change is a renter’s desire for quality. Providing them with the best possible service in terms of technology, amenities, and community will help you stay ahead of the competition for years to come.

John Tweedie is a Regional Property Manager for CLV Group, a Canadian property management group dedicated to helping renters and homeowners find the perfect place to call home.

RECONCILIATION IN ACTION

By Erin Ruddy

Senáḵw is one of the largest low-carbon residential and Indigenous-led real estate developments in Canadian history. Currently underway at the south end of the Burrard Bridge in Vancouver’s Kitsilano neighbourhood, when complete, 11 towers will soar from the 10.5-acre reservation, filling a diverse range of housing needs in an area desperate for supply. But the project is ground-breaking for more reasons than that: setting new standards for collaboration, green building design, and long-term income for the Squamish Nation, Sen áḵw is a powerful testament to Indigenous land ownership and an economic legacy that’s expected to generate upwards of $10 billion in revenue over its 100-year lifespan from rental income alone.

Senáḵw sets new standard for collaboration, green building design and long-term income for the Squamish Nation

RECONCILIATION

Senáḵw is not just about real estate: it’s rooted in a story of the shared journey of our people coming home,” says Mindy Wight, CEO of Nch’ḵaỷ Development Corporation, the economic development arm of the Squamish Nation. “It is reconciliation in action.”

Envisioned with future high-density development in mind, the plans for Senáḵw which can be interpreted as “The place inside the head of False Creek”— were heavily influenced by what the surrounding area could look like a century from now, with towers soaring over 50 storeys, accessible green spaces, and energy efficiencies exceeding today’s standards. The striking renderings evoke a re-imagined ‘Towers in the Park’ feel,

with bright, open courtyards, a multi-tiered landscape for social and commercial uses, and plenty of space to roam on foot or bike.

“The project is also part of the solution to Vancouver’s housing crisis,” Wight says. “With the goal of 6,000 rental homes — including 1,200 affordable homes—it will ease Vancouver’s rental housing shortage.”

History of the land

For thousands of years, the fertile lands beneath the new Senáḵw development were home to members of the Squamish Nation.

Once an important hub for trade, commerce, social relationships, and cultural practices, the arrival of the European settlers in 1791 ignited industrial expansion in the area and

put pressure on the residents to vacate. In 1913, the Government of British Columbia forced the illegal surrender of the lands, and the families at Senáḵw were displaced across the inlet to other Squamish reserves. Since the 1970s, efforts by the Squamish Nation to reclaim Senáḵw have been underway, with multiple court battles and little success until 2003 when the Federal Court of Canada finally returned a small portion of the original reserve to its rightful inhabitants.

Senáḵw’s proximity to downtown Vancouver, along with its rich, complicated history, contributed to the ensuing plans for a mega-mixed-use housing development that will bring the best value for the Squamish Nation.

“SeNáḵw demonstrates Squamish leadership to the world on climate, on urban development, and on economic development.”

Renderings courtesy of the Squamish Nation Design Architect: Revery Architecture; Architect of Record: Kasian Architecture, Interior Design and Planning

“A project of this magnitude comes with unique challenges,” Wight points out, adding that the arrival of COVID-19 less than a year into the process didn’t help matters. “One of the largest challenges, however, was securing the right partnerships, multi-stakeholder interests, and navigating approval processes. At this scale and complexity, a diverse, highly experienced team is required to realize the project’s full potential successfully.”

This reality prompted the Squamish Nation to seek out a partnership with Westbank, an international development practice based in Vancouver. The Nation, Nch’ḵay and Westbank have since been working together to lead the development of Senáḵw with support from a consulting team of globally renowned development and construction professionals.

“The partnership has allowed us to accelerate the project and deliver more housing and amenities in a shorter amount of time,” Wight says. “Moving forward, we continue to face the same challenges that other developments face, such as rising inflation and interest rates, and labour shortages.”

Challenges aside, the project is well on its way to a completion date of 2030, with many notable milestones still to come. Sen áḵw will be Canada’s first large-scale net zero operational carbon residential development—one of only a few in the world—with aspirations to be 100 per cent GHG-free. All Senáḵw’s heating and cooling will be produced by a new 10MW district energy system fed by waste heat from Metro Vancouver’s adjacent sewer infrastructure, and 45,000 square feet of mass timber construction will help reduce embodied carbon by 50 per cent compared to typical concrete construction.

Meanwhile, Nch’ḵay has been making significant strides in contributing to the growth and well-being of the community since its establishment in 2018. Although Sen áḵw is a major project for the growing team based in Vancouver, it’s not the only development in the pipeline.

“Unfortunately, we cannot share any details at this time about our other projects due to ongoing negotiations and due diligence,” Wight says. “All we can say is… stay tuned!”

Additional project details:

Senáḵw promotes a deep connection to urban living and nature by bringing together the four essential pillars of city-building: built environment, culture, transportation, and energy, creating a unique development for the City of Vancouver.

Senáḵw is…

• Currently the largest residential partnership with any First Nation in Canadian history

• The largest net zero residential project in Canada

• A historic economic development opportunity that will set the Squamish Nation on a path to complete economic independence.

• A lasting example of Coast Salish architecture and design, and a cultural legacy for the Squamish Nation and for Canada

• A project that will lead to hundreds of jobs and entrepreneurial opportunities for the Squamish Nation membership in design, construction, and operations

• Projected to be complete in 2030

About the Squamish Nation

Consisting of 23 villages, the Squamish Nation is comprised of descendants of the Coast Salish Aboriginal people who live in the present-day Greater Vancouver area, Gibson’s Landing and Squamish River watershed. The Squamish Nation has occupied and governed the territory since beyond recorded history. The culture is rich and resilient, with customs and traditions that are strongly interconnected with the traditional territory.

HOW TO SECURE THE BEST RATES

Tips and Insights from Mark Fujita of APOLLO Insurance

Canada’s insurance landscape has changed dramatically in recent years, and for multi-residential landlords, the road forward has been particularly fraught with added costs and complications. According to Mark Fujita, the newly appointed VP of Partnerships at APOLLO Insurance, increases in overall property insurance costs have been steeper than ever, driven by significant losses for water damage, fire, and natural disasters, combined with inflationary pressure increasing the costs of claims through labour and materials.

This pricing ‘hard market’ is leading to higher deductibles and reduced coverage options,” he said. “Higher interest rates and natural disasters are driving capital to look to other investments instead of insurance, meaning reinsurance companies and primary insurance companies have been raising their prices or exiting some categories or geographies.”

In light of this stark reality, we asked Fujita to share some tips and suggestions for multi-

res landlords seeking coverage in 2023 and beyond:

Q. What’s changed the most for landlords and tenants on the insurance front recently?

A. A big change we’re seeing is that building insurance providers are craving more data about the physical structure, as well as ongoing data from smart building systems to inform sophisticated risk management practices and

insurance pricing. We’re also seeing an increasing number of landlords requiring proof of insurance as a condition of their leases, which means they have the added administrative challenge of validating and tracking renters insurance for each resident. For the tenants, the experience of getting insurance has improved greatly thanks to the ability to get quotes and buy coverage online, or even by having an insurance offering embedded directly into the lease execution process.

Q. Will rates continue to climb in the foreseeable future?

A. Frequency of water damage claims continues to be a challenge in multifamily buildings, particularly in newer buildings equipped with inexpensive connection parts for washing machines and dishwashers. Also, the severity and frequency of natural disasters is putting pressure on property insurance globally, and this isn’t likely to change anytime soon. On the positive side, as Canada’s inflation rate slows and interest rates stabilize, we should see some easing of industry rate increases.

Q. What can multi-residential property owners do to secure the best rates?

A. Insurers today prefer property owners that focus on risk management, so having risk reduction and mitigation measures in place will help landlords get better rates. Some examples of risk mitigation include making properties non-smoking, limiting BBQs on patios, reviewing hose connections for water-based appliances, having leak detection alarms, water shutoff valves and caging fire sprinklers in

place. Another great way to reduce risk and therefore reduce costs is to have a well-defined and tracked renters insurance program to recover costs for claims that were caused by tenant negligence.

Q. Any other advice for landlords and renters?

A. For landlords, the best thing to do is ensure a comprehensive renters insurance program is in effect. The landlord can mitigate reputational, business, and personal risk by ensuring their tenants have proper insurance. Also, landlords and tenants alike should consider the inevitability of natural disasters and have a plan in place in case evacuation is needed due to a catastrophic event, such as a fire

or flood. For renters, having adequate coverage for contents, additional living expenses and liability, will reduce their personal risk of loss. Most tenants underestimate the total cost to replace their belongings, plus the cost of living in a hotel in the event their unit is rendered uninhabitable. They also underestimate the number of claims that are caused by their neighbours, such as a leak in the unit above them or a fire. Modern renters’ insurance policies insure much more than what’s inside the tenant’s apartment; they can provide coverage for property in their storage unit, work supplies and tools related to their business, and even items they’ve brought with them on a trip.

APOLLO Insurance is a Canadian digital insurance provider and leading innovator in the emerging embedded insurance sector. Last year, APOLLO partnered with Yardi Systems to offer an insurance interface embedded into Yardi’s software that allows Canadian tenants and landlords an effortless digital insurance experience. Find out more at: www.apollocover.com

 Save staff up to 4 hours per day

 Eliminate constant disruption from deliveries

 Reduce package theft and remove package clutter from front desk, lobby areas and hallways

 Offer a valuable amenity for residents

 Fast & easy deliveries for carriers – officially approved by Canadian Carriers

lockers.

Canada’s Enhanced GST Rental Rebate program

A “game-changing” step toward ending the housing crisis

by Erin Ruddy

The Canadian government is removing the Goods and Services Tax (GST) on future purpose-built rental projects to incentivize the construction of much-needed rental housing. It’s the latest in a flurry of new measures announced by the Trudeau government to address the ongoing housing crisis—and for residential housing developers, it comes as welcome news.

This really is a game-changer and it’s something that we applaud the government for undertaking,” said Dave Wilkes, president and CEO of the Building Industry and Land Development Association (BILD). “This is something that the industry has identified as a barrier for purpose-built rental, and we believe that it is a really significant step.”

The measure was first proposed, then promptly dropped, by the Liberal government in 2015. Reintroduced as the “Enhanced GST Rental Rebate” program on September 14th, 2023, it increases the existing rebate from 36 per cent to 100 per cent for any purpose-built rental housing project about to embark on construction. Whether it’s a student housing building, a senior residence, a quadplex, or a multi-tower rental complex, qualifying developments can expect a five per cent reduction in their overall costs as a result of this enhancement. Projects that convert existing non-residential real estate, such as an office building into a

residential com plex, are also eligible for the rebate.

“The stark and deeply troubling fact is that we are in a housing crisis and face an acute shortage of supply, so it is critical that government leaders come up with steps to spur construction of more housing and purpose-built rentals,” commented Richard Lyall, President of Residential Construction Council of Ontario

(RESCON). “We need millions more units and must pull out all the stops to make that happen. The moves proposed today are a good start.”

A good start indeed—but how much of an impact will it have considering the scope of the crisis?

In late 2022, BILD, along with the Federation of Rental-housing Providers of Ontario (FRPO), Urbanation, and Finnegan

Marshall, collaborated on a report looking at purpose-built rental supply in the GTA. Findings were dire, indicating that the supply deficit will double in the next 10 years to 177,000 units across the GTA if urgent action is not taken.

“We haven’t built enough purposebuilt rentals to accommodate our growing population, yet projects were still being saddled with whopping sales taxes on the fair market value of a building upon completion,” said Lyall. “When encumbered with such formidable financial hurdles, developers often find it difficult to proceed with apartment

building projects. These adjustments are clearly a step in the right direction as it will shave costs from constructing apartments and lead to more building.”

Fro m the tenant perspective, advocates of the GST Rental Rebate program say that any step that encourages the construction of purpose-built rental housing over condominiums is a positive move for improving affordability. According to Jacob Gorenkoff who leads the affordable housing policy and advocacy work of the Canadian Housing and Renewal Association, “Eliminating GST on purpose-built rental projects is an important first step

towards creating more of the housing that many Canadians need, at costs that are affordable to them. But like the Prime Minister said during the September 14 announcement, there is no silver bullet to solve the housing crisis.”

Gorenkoff added, “If we want Canadians to have access to affordable homes, the federal government needs to lead a Team Canada approach to housing, working with all levels of government, and private and non-profit housing providers, to set clear targets that can be achieved through ambitious, yet functional policies and programs. A key consideration must be supporting Canadians that can’t afford housing offered at sky-high market rates. The best way to help these neighbours is by doubling Canada’s proportion of community housing stock to be on par with the OECD and G7 averages.”

About the program

According to the government website, qualifying new residential units would be those that are in buildings with at least:

• Four private apartment units (i.e., a unit with a private kitchen, bathroom, and living areas), or at least 10 private rooms or suites (e.g., a 10-unit residence for students, seniors, or people with disabilities); and,

• Ninety per cent of residential units designated for long-term rental.

Projects that convert existing nonresidential real estate into a residential complex are also eligible provided they meet the conditions above.

The enhanced GST Rental Rebate will not apply to individually-owned condominium units, single-unit housing, duplexes, triplexes, housing co-ops, and owned houses situated on leased land and sites in residential trailer parks.

“These adjustments are clearly a step in the right direction as it will shave costs from constructing apartments and lead to more building.”

Industry Hot Topics

Indigenous design guides Winnipeg’s largest infill development

Winnipeg’s largest and most sustainable infill development, Southwood Circle, has begun taking shape, with Indigenous design principles guiding the 80-acre project that’s set to become one of the most densely populated neighbourhoods in the city. Home to more than 20,000 people, the walkable, bike-friendly community will feature roughly 10 kilometres of new active transportation pathways. The neighbourhood will be steps from the rapid transit station at the University of Manitoba. As the province’s first “complete campus community”, the project is expected to transform the campus into a world leading “UniverCity” where 60,000 people will live, work, study or play.

“Southwood Circle is part of a transformation of the 110-year-old Fort Garry campus from a daytime commuter destination to a complete community,” said Michael Benarroch, President of the University of Manitoba. “This community answers the call for sustainable housing options. It will be a unique urban experience, distinct within Winnipeg. It will be rich in amenities. It will integrate the university with the surrounding community.”

Southwood Circle will also create a Living Lab Research Consortium allowing developers to participate in data gathering, sharing and researching in various aspects of community development, from environmental and sociological impact to engineering and architectural design. This will give faculty and student researchers the opportunity to collaborate with developers (and each other) on interdisciplinary research projects.

“We have this unique opportunity to continuously improve energy, water and waste efficiency, and generate higher levels of overall wellness through applied science,” said Greg Rogers, CEO of UM Properties. “We cannot solve the problems of the world on these 80 acres but we can find new and better ways that can be shared and applied elsewhere to make an ever greater contribution to housing and environmental challenges.”

CON ERRA CON ERRA

The future National Centre for Truth and Reconciliation will be located on the lands granted to the NCTR by the University of Manitoba. As well, the design team, including Anishinaabe architect Ryan Gorie, was tasked with envisioning a community that embraced nature and preserved the 5,000 trees presently located on the property, some as old as 300 years. The team created a 21-plus acre park network of existing forest for trails and wildlife corridors, twice the municipal requirement.

“One of our most important goals for Southwood Circle is for it to be a symbol of reconciliation in action,” said Bob Silver, Chair of UM Properties. “We’re immensely honoured that the National Centre for Truth and Reconciliation will be part the Southwood Circle community. And our planners have done an amazing job of giving it a place of prominence for residents and visitors.”

B.C. sets annual rent increase at 3.5%

Landlords in British Columbia will soon be able to raise rents up to 3.5 per cent, according to the Province’s 2024 rent increase guideline. The rent cap is set below the 12-month average inflation rate of 5.6 per cent and applies to rent increases with an effective date on or after January 1, 2024. If landlords choose to increase rent, they must provide a full three months’ notice to tenants using the correct Notice of Rent Increase form. B.C. landlords can increase rent only once every 12 months.

“Across the country, costs have been increasing — especially for housing — at a rate that’s unsustainable for many people,” said Ravi Kahlon, Minister of Housing. “We know that’s the case for both landlords and renters, and that’s why we’ve found a balance to protect renters while helping to keep rental units on the market.”

Before 2018, the annual allowable increase was based on the inflation rate plus 2 per cent. A rent increase freeze was put in place in 2020 and 2021 to support renters during the COVID-19 pandemic. In 2023, the Province capped rent increases at 2 per cent, also well below the 5.4 per cent inflation rate that would have otherwise applied.

“With renters facing a possible rent increase of almost 6 per cent, the government listened to the voice of renters and acted, and I’m so glad they have,” said Spencer Chandra Herbert, Premier’s Special liaison for Renters, former chair of the Rental Housing Task Force and MLA for Vancouver-West End. “We also know people renting out homes are facing increased costs and want to make sure they continue to make places available for long-term renters.”

According to the government’s statement, as inflation returns to normal levels in future years, it will likely return to an increase that is tied more proportionately to B.C.’s Consumer Price Index.

Pinemount and Elysium partner on Emery Village development site

Pinemount Developments Ltd. and Elysium Investments have partnered on a 1.78-acre site located in Emery Village, Toronto, at 3406-3434 Weston Road. The development site currently hosts a singlestorey commercial plaza that is projected to give way to a mixed-use, multi-tower complex in the near future.

In a joint press release, Pinemount and Elysium said they are “looking forward to leveraging each other’s extensive experience in acquiring and developing multifamily assets across Ontario, to yield a development site that will serve the emergent housing and commercial space demand from the nearcomplete Finch West LRT line—a transit system that will unlock travel options for thousands of residents in northwest Toronto, cutting down commute times and increasing travel reliability.”

Emery Village at Finch and Weston Road is Canada’s largest Business Improvement Area (BIA), founded in 2003. Home to approximately 3,200 businesses and over 28,000 full and part-time employees, land-uses in Emery Village include retail strip malls and industrial/institutional uses to the north and south of the main intersection.

Dream Unlimited announces major development news

Less than a week after the federal government announced it would be removing GST on the construction of new apartment buildings, Dream Unlimited Corp shared plans to deliver 5,000 new purpose-built rental units in urban centres across Canada, including in Ottawa, Saskatoon, Calgary and Toronto.

“This legislation is a game changer for the development industry, and more importantly for Canadians,” said Michael J. Cooper, President and Chief Responsible Officer, Dream Unlimited. “The housing crisis has impacted every urban centre from coast to coast. What this legislation unlocks is our ability to get shovels into the ground quickly at a time when it’s never been more critical to build new homes.”

Over the next six months, Dream is poised to advance several “shovelready” projects, including 1,010 units in Ottawa—of which 43 per cent will be affordable. The substantial progress in Ottawa is largely due to a unique partnership between Dream and the Multifaith Housing Initiative (MHI), a Canadian non-profit charitable organization.

“Multifaith Housing Initiative strongly supports the legislation tabled by the federal government to eliminate the GST from new purpose-built rentals and encourages all provincial governments to proceed with the exemption of the PST,” said Suzanne Le, Executive Director, Multifaith Housing Initiative. “The elimination of GST/PST will allow projects and innovative partnerships between private and non-profit sector, like the one at LeBreton Flats between Dream and Multifaith Housing Initiative.”

According to Le, these partnerships are essential to scale the delivery of affordable housing and to strengthen capacity in the non-profit sector.

Ontario’s targeted incentives fund LEDs and VFDs

Commercial, multi-residential and institutional electricity customers in Ottawa and select areas of Toronto are now eligible for targeted incentives through Ontario’s BizEnergySaver program. The program provides upfront discounts on designated LED lighting, lighting controls, variable frequency drives (VFDs) and carbon monoxide sensors to control fans in parking garages. Meant to alleviate particular constraints in both cities’ local distribution systems, it will be offered in tandem with Toronto Hydro, Hydro Ottawa or Hydro One in the applicable jurisdiction.

The two-step process begins with a free assessment of eligible facilities to determine potential upgrade measures. From there, prospective participants must sign an agreement within 90 days in order to proceed. Available incentives for LED lighting products range from less than $20 to $118 for a four-foot, four-lamp linear fixture and up to $213 if it is paired with a sensor. As well, incentives for LED high-bay fixtures range from $211 to $410 per unit or $267 to $456 if paired with a sensor. Incentives for VFDs range from $1,400 to $39,800, while $880 is provided for carbon monoxide sensors.

These are available in 31 postal code zones largely located in the Etobicoke area of Toronto and in 40 postal code zones that encompass most of Ottawa. The program will accept participation agreements until December 31, 2024, and approved upgrade projects must be completed by December 31, 2025.

Our Changing Society

The impacts of rising crime on your insurance rates

by Andy Schwartze

One of the realities of being an insurance brokerage and risk management professional is having a wide range of clients from multiple sectors. While we may, over the course of a long career, trend towards a specific industry, it would be nearly impossible to fully comprehend the day-to-day details of each business we find ourselves working with.

For those of us focused on corporate insurance and risk management, once thing has become clear: we are seeing a disturbing societal trend that isn’t leaving us with a great deal of optimism. Some experts blame the surge in negative behaviours on the economic fallout of COVID-19, but crime in major cities has been rising unabated for years. Today we are seeing regular shootings occurring in schools and shopping malls, and road rage incidents (that didn’t exist 50 years ago) happening on the daily. The overall behaviour within our societies has deteriorated in the face of reduced states of law and order and worsening cultural friction. We are witnessing more inappropriate behaviours on the part of the political leadership that we ourselves elected. This sets an awful example for the younger generations—and as history has taught us often, we need to respect its lessons, otherwise things will go downhill.

In the years of the industrial revolution, the main concerns of insurance and risk management professionals were the dangers associated with growing production infrastructure. Factories back then were not designed for worker health and safety. Over the years, technologies have solved those problems, and today, we no longer spend much time on the issues related to workplace conditions and production facility disasters. Increasingly, we are focusing on the “soft crime” events that affect our abilities to run businesses properly. Technologies have created ways for illintentioned people to reach out, over long distances, and steal everything from money and industrial secrets to large amounts of sensitive personal data. This subtle, nonviolent, and destructive behaviour is one that is going to elevate calls for more insurer protection and even demands that insurers be proactive in combating the threat.

We need to be reminded that insurance availability and cost are a direct function of what is happening in both societies and the environment. Higher levels of successful litigation, increasing fraud and criminal activity, deteriorating behavioural standards and the ever-present threat of weather events are direct influencers of the insurance industry’s behaviour. Policy wordings will be adjusted, either in favour or to the detriment of insurance buyers. As long as insurance contracts are renewable annually, with either side fully able to stay or move on, the costs of protection will be adjusted to reflect the extent to which society relies on and leans on this industry. If societies deteriorate, coverage availabilities, or the cost of purchasable insurance, will be adjusted. If a situation develops to a significantly negative level, such as a far-reaching litigation event (or a nasty weather event that is likely repeat often) insurers will withdraw.

Some might remember that many years ago, an insurer withdrew from Canada because it wanted to know the colour of your car. It refused to insure red cars, deeming the owners of those vehicles to be more aggressive drivers. We can expect certain regions in Canada soon to be targeted in a similar manner—to be treated as difficult property insurance regions because of more anticipated wildfires. Eventually, cyber insurers will refuse to offer protection to businesses that do not follow specified system access procedures. These adjustments by insurers happen subtly, but they do happen, and we follow them as examples of how insurers reflect outside change in their operations. Insurance is a reflection of what goes on in the “real world”. It has always been so and will certainly continue.

For questions regarding multi-residential housing insurance, please visit: www.takecover.ca

POISED TO THRIVE

5 Indicators of a financially healthy neighbourhood

The health of your building’s surrounding neighbourhood says a lot about the health of the building itself. Are there grocery stores, shops, and restaurants nearby? Are there decent schools and parks for families? The more thriving, safe, and accessible the community, the better chances the apartment has of attracting and retaining long-term, quality tenants.

Here are five indicators of a thriving, healthy neighbourhood:

1. Steady job growth within multiple industries

A strong, growing employment market is a good indicator that future residents will be drawn to live in the area, which will boost demand for housing and have a positive impact on rental rate growth. If the market has more than one industry driving it, all the better as it will ensure diverse, sustainable employment options to attract more people.

2. Proximity to transportation

Access to highways, bus lines and other mass transit are important to the growth of a community—and high on residents’ must have lists. If an apartment building is well-situated along public transportation routes and also has a high walkability rating, chances are it will do well.

3. Low crime rate

Safety is an important selling point when it comes to where residents choose to settle down. Studies show that young families will relocate to other neighbourhoods even if it means a longer commute to raise their kids in a safer environment.

4. Good schools

Similarly, the quality of local childcare and schools are the important considerations for parents when seeking out a potential new building. The quality of the local schools can predict whether a building will have a higher turnover of tenants.

5. Culture opportunities, nature, and aesthetic appeal

If the neighbourhood offers public spaces for cultural events, natural spaces for roaming, and if obvious care is taken to maintain the streets and services, it can go a long way in terms of enhancing the perceived quality of an apartment building. Homeowners view their neighbourhoods as an extension of their homes, and renters are no different.

For more general tips and insights, follow us at www.REMInetwork.com