Canadian Apartment Magazine Jan/Feb 2008 Issue by Rick Evangelista

C A N A D A ’ S O N LY N A T I O N A L P U B L I C A T I O N F O R A P A R T M E N T O W N E R S A N D M A N A G E R S

VOLUME 4 / NUMBER 6 / Jan/Feb 2008

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22 Industry Profile

Investing in Your Building For building managers, capital improvements are one way to reduce operating costs. For Greenwin Property Management Inc., upgrades paid oﬀ in higher occupancy levels and increased tenant satisfaction.

contents... 8 Real Estate Intelligence and Market Trends It’s hard to keep track of all the trends in the ever-changing real estate market, but one thing is sure. If you’re not ahead of the game, you’re out of it.

12 Unhappy Legal Results for Landlords Legal decisions involving damages, evictions and repair and maintenance will have an impact on how landlords carry out their business.

16 Less Headaches, More Profit Hiring a third-party manger will reduce your management headaches. It can also improve your bottom line..

30 Everything Has a Cost Per Something! Evaluate the eﬀectiveness of your advertising with a cost per contact measurement.

32 Student Housing Offers Opportunities and Challenges Designing a multi-residential building for student housing requires modifications to both your building and your leasing strategies.

34 Give Your Laundry a Makeover A comfortable and well-maintained community laundry can help you attract and retain residents.

36 Fatal Fire Prompts Need to Assess all Risks Taking an approach to risk management that is above the legislated requirements may cost a little more money, but it will create a safer environment for everyone.

38 Hi-Tech Cameras Identify Plumbing Problems Cameras have become a valuable tool in the plumbing business. They can easily identify damaged pipe, obstructions or ﬁnd lost jewelry.

20 Multi-facts

4 Canadian Apartment Magazine

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VA N C O U V E R • C A L G A R Y • TO R O N TO • M O N T R E A L • H A L I F A X

editor’s note City-Owned Homes Sit Vacant

PUBLISHER

Marc L Côté

One of Canada’s largest landlords, the Toronto Community Housing Corporation, has been on the hot seat of late. In December, media reports surfaced stating that 50 of the corporation’s portfolio of 500 single-family homes in Toronto were vacant because they were so run down, they were uninhabitable. TCHC is the largest social housing provider in Canada with over 58,000 units housing more than 164,000 low and moderate income tenants. Across the entire portfolio, the maintenance shortfall is estimated at about $300 million beyond what the corporation already spends. Derek Ballantyne, TCHC’s Chief Executive Officer has said the housing authority lacks the resources to invest in the major repairs that many of its homes need. Some Toronto councilors have suggested selling the singlefamily homes to make up the maintenance shortfall. That is easier said than done as the Social Housing Reform Act states that the TCHC must maintain the same number of units with the same number of bedrooms in place. That means if the houses are sold, they would have to be replaced with new units. TCHC is awaiting the results of a comprehensive review of all its real-estate assets, expected in March, before deciding what to do with the properties. We shall see if the report brings forth any changes in the way TCHC is managed. Elsewhere in this issue we profile Greenwin Property Management. Over the past several years the company has made a significant investment in capital improvements, installing more efficient heating, lighting and plumbing systems. The changes offer a payback in reduced operating costs and increased resident satisfaction. Our marketing writer, Jason Leonard, says if you are not measuring your cost per contact, then you aren’t measuring the effectiveness of your advertising. He offers a simple calculation to measure and track your advertising costs. Robert Helyar reports on an emerging rental market, student housing. He tells us that designing a multi-residential building for student housing requires modifications to both your building and your leasing strategies. CA M

Randy Threndyle DESIGN

yidesign inc. CONTRIBUTING WRITERS

Stephen J. Bronetto Dick Casey Robert G. Doumani Tom Halinski Robert Helyar Jason Leonard Anne Meinschenk Larry Rothman David G. Truscott For sales information call 416.966.HUSH

Canadian Apartment Magazine is owned by MediaEdge Communications Inc. and published six times a year by hush Media

5255 Yonge Street, Suite 1000 Toronto, Ontario M2N 6P4 Email: info@mediaedge.ca

Tel: 416.512.8186 Fax: 416.512.8344 Copyright 2007 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1712-140x Circulation ext. 230 Subscription Rates: (GST included) Canada: 1 year, $44.94 / 2 years, $80.79 Single Copy Sales: Canada: $8.00 Reprints: Requests for permission to reprint any portion of this magazine should be sent to Marc L Côté.

Randy Threndyle Editor

Authors: Canadian Apartment Magazine accepts unsolicited query letters and article suggestions.

randy@hushmedia.ca

Manufacturers: Those wishing to have their products reviewed should contact the publisher or send information to the attention of the editor.

Quoteworthy “Our ongoing resident surveys over the years consistently listed elevator performance as the primary concern amongst residents.” – page 26

6 Canadian Apartment Magazine

EDITOR

Sworn Statement of Circulation: Available from the publisher upon written request. Although Canadian Apartment Magazine makes every effort to ensure the accuracy of the information published, we cannot be held liable for any errors or omissions, however caused. Printed in Canada

CHOOSE ROGERS AND GIVE YOUR TENANTS THE HOME THEY’RE LOOKING FOR. When you choose Rogers as your communications and entertainment provider, you’re choosing to partner with a leader. Through our continued partnership, Rogers will carry on delivering excellent value for your tenants.

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BENEFIT FROM CHOOSING MULTIPLE ROGERS PRODUCTS – HOME PHONE, WIRELESS, INTERNET AND DIGITAL CABLE. TM Trademarks of Rogers Communications Inc. or of Rogers Cable Communications Inc., used under license. ®YAHOO! is the trademark of Yahoo! Inc., used under license. All other trademarks are the property of their respective owners. © 2007 28-12

asset management

Real Estate Intelligence and Market Trends: If you’re not ahead of the game, you’re out of it by Stephen J. Bronetto, CPM

What are the hottest trends in residential real estate? How do you keep up with it all? With the changes that occur in the ever-changing real estate market, it is hard to keep current. This is partially because these trends can change with geographic locations. What was “in” before is not necessarily “in” now. With today’s market being busier than ever, this trend dictates that apartment space meet the needs of tenants. Every apartment building landlord/owner has the same goal, which is to minimize real estate costs while maximizing cash flow distributions (without losing sight of operational and image objectives). The first step in meeting this goal is to understand the quantitative and qualitative objectives as well as the relative importance of each in the decision-making process. Real estate values move up and down rapidly like stocks, but no one knows where the value is moving because it’s hard to get a physical appraisal of stocks. But real estate is different and being aware of the market trends involves market timing. Knowing the market and its trends is to understand business economics and the effect of changing demographics. To stay ahead of the ever-changing real estate curves a landlord/owner needs to know where they are in the marketplace today. It is essential for the landlord/owner to stay up-to-date with the latest trends in areas where they are looking to purchase or sell buildings. Gathering a team of competent advisors makes prudent, economically sound sense and in the long run will save money, not cost money. Of course, this process can be done

8 Canadian Apartment Magazine

without the help and support of an advisor, but if you think about it, is it wise? You decide. One of the largest costs an owner has is the rentable space within the building. Owners are, or ought to be, spending more time strategically planning how best to manage the apartment space and their tenants’ needs, so as to minimize their occupancy costs, maintain flexibility and the image their tenants’ desire. It has become a fact of today’s environment that people want greater convenience and more comfort in their lives. Aesthetically pleasing buildings and enjoyable surroundings are important because tenants spend quality time in their home. The trend towards “green” buildings having both comfortable efficient surroundings that also help the environment seems to be growing steadily year by year with no peak being foreseen in the near future. Green buildings are energy efficient, environmentally friendly and provide healthy surroundings for the occupants. Key points for apartment renters choosing a location to live in 2008 will continue to be:

• • • • •

Pleasing location close to amenities such as shopping, banking, transit, and highways. Prestigious feeling building with appealing décor and manicured landscaping. Ample parking for themselves and their guests. Up-to-date IT infrastructure within the building. Secure and safe living environment.

The knowledgeable lawyers you can count on. From acquisitions, dispositions and financing, re-development and intensification, to tax and regulatory matters - we have done it all. The Aird & Berlis LLP Multi-Residential Group has extensive expertise in the full spectrum of complex legal issues that affect you.

We are experienced lawyers commited to providing seamless, timely and cost-effective practical solutions to any issue faced by the multi-residential community.

For more information about the Aird & Berlis LLP Multi-Residential Group, please contact: Robert Doumani T 416.865.3060 E rdoumani@airdberlis.com

Partnership. Results. Success.

Brookfield Place, 181 Bay Street, Suite 1800, Toronto, ON M5J 2T9 T 416.863.1500 F 416.863.1515 W www.airdberlis.com

The fact is that the population of Toronto, like the rest of the western world, is getting older; people are having fewer babies than their parents did and older people are living longer than their parents did. That demographic combination is the basis for the phenomenon of population aging, which means simply that the average age, is increasing. The dwindling of the power of the boomers will probably be the most important demographic phenomenon Toronto will experience. Yet the beginning of the end of the big generation’s dominance is already evident in the job markets. As the echo generation’s residential needs have been accommodated in the millennium bust, the group now emerging from the maternity wards to enter the workforce is too small to drive a great deal of new home construction. Even though indications today read that more single housing is needed and being built, the long-term trend shows that apartment space will become more important to the overall density of a city. The reason is proximity. People don’t want to travel and commute far from their home to their work. The renewed interests in the older locations of the city are seen more for the land’s proximity and location, rather than a building’s structural values. We expect that we will see a strong movement from single homes toward the renewal of old apartment structures and factory sites with substantial aesthetic character in and around a city and including the suburbs. Why move farther out

increases because of the strength in the Canadian dollar is a short-term effect. However, this market can’t last forever and will go through more of a correction than a recession period if the interest rates were to increase in 2008. With this there is a large amount of our market activity that depends on when and how much the interest rates increase. We don’t expect that a slower market will substantially affect growth of profits for a residential investment. The current real estate market rental rate as indicated by the Toronto Real Estate Board (9/30/2007) for a two-bedroom apartment rose to $1,860 per month, which is an increase of 3% from 2006. Bachelor apartments did not exceed these figures and in fact declined in monthly rental rates. With this information we expect that as the housing markets continue to increase the requirement for apartment space will also increase because most people will not be financially able to afford the costs of buying a house. The market seems to be progressing steadily from 2007 through and into 2008. However, if external forces such as oil price increases or war issues take place then the market activity will decrease faster than we are forecasting into late 2009 or even early 2010 just when the baby boomer population starts to reach toward 50-60 years of age and considers their options to exit from the workforce.

Remember the golden rule of any business, “He who has the gold makes the rules”. of the city just to commute hours every day, when you can buy, or renovate, and live closer to home? The reason is that sound economic fundamentals continue to fuel healthy residential real estate activity in markets across Canada, despite the slowdown south of the border. Continuing job growth, low interest rates and a solid economy have been credited with the very positive results in the real estate market thus far, but we feel that it can’t continue. Even with strong consumer confidence levels and unemployment levels low, we are feeling the trend to a pending economic slow down. For the year 2007 as a whole, CanaData expected Ontario to grow by 2% (real or inflation-adjusted Gross Domestic Product), slowing to 1.8% in 2008. We tend to agree with this assumption. From our perspective the market is simply hot and not running out of steam just yet. An increased risk that over-zealous investors will have to cancel investment plans could point to higher interest rate expectations and make loans a greater risk. The increasing apartment rental rates coupled with higher taxes and operating costs as well as tighter operating expenses would diminish profit margins for owners. The effect of pending interest rates

10 Canadian Apartment Magazine

Remember the golden rule of any business, “He who has the gold makes the rules”. Higher residential rental rates, the shortage of quality well-located apartment space and limited market vacancies, places upward pressure on rental rates and building values. Under these restrictive circumstances owners will consider holding onto their current investment buildings and review less expensive older or other classes of buildings to acquire in order to renovate in the out lying areas of their market or even the suburbs. Review options, analyze carefully, and decide what makes the most economic sense – to invest now or wait for the next real estate cycle. Remember to keep an eye on changing trends as 2008 unfolds – you will need to in order to keep ahead of the game. If you don’t you might ﬁnd yourself out of it. CAM

Stephen J. Bronetto is President of BonaMax Realty Inc., and is a real estate advisor with 23-years experience in the residential, industrial, retail and real estate investment sectors. Stephen can be reached at 416-817-4377 (Mobile) or sbronetto@bonamax.ca

MG-07169 CanAptMag Ad.indd 1

8/15/07 10:47:10 AM

regulation

Unhappy Legal Results for Landlords in 2007 by Robert G. Doumani & Tom Halinski Aird & Berlis LLP

Ontario Landlords achieved limited success at the Ontario Rental Housing Tribunal (ORHT), the Landlord and Tenant Board and in the Courts in 2007. In the second of two articles the authors describe the major decisions and their implications. Several legal decisions made in the past year will have an impact on how landlords carry out their business. Some of those decisions were discussed in the last issue. In the following article the authors outline more important judgments.

Damage Awards The extent to which, if at all, the Ontario Rental Housing Tribunal (ORHT) [now the Landlord and Tenant Board (LTB)] could award damages under its authority on an application to make “any order it considers appropriate” Residential Tenancies Act, 2006 (RTA), clause 31(1)(f)] was considered twice in 2007. In Mejia v. Cargini the Divisional Court determined that the ORHT [now LTB] has the power to award general damages for a breach of right to quiet enjoyment, which is an obligation placed on the landlord under the lease.

12 Canadian Apartment Magazine

The ORHT in Tenant v. Thornton held that the terms “damages” and “compensation” are used interchangeably in the Tenant Protection Act, 1997 (TPA) and that “compensation” is intended as the plain language term for “damages” and that the Divisional Court has found that ORHT has the power to grant compensatory damages. Since aggravated damages are compensatory in nature – to compensate for tangible and intangible injuries (e.g. distress and humiliation caused by the actions of the oﬀending party), the Tribunal found that it had the power to grant aggravated damages.

Eviction for the Purpose of Demolition A piece of good news in an otherwise bleak year for landlords was delivered in Puterbough v. Canada (Public Works and Government Services). Public Works rented out 300 homes

“The owner has the right to make a rational choice from a range of available options, one being demolition.” that were 50 to 100 years old which eventually required repairs in excess of projected rental revenues. Public Works sought orders to terminate tenancies and evict some of the tenants for the purpose of demolition because it was too costly to repair the homes. The tenants opposed the eviction on the grounds that Public Works was in serious breach of the landlord’s responsibilities. The ORHT found that Public Works was in breach of obligations under the Act, and ordered abatement of rent in four cases and repairs in ﬁve (all) cases. It also found Public Works was in “serious breach” of its responsibilities in two cases and refused to grant eviction orders. The Tenants appealed eviction orders and Public Works appealed the decision not to terminate two other tenancies. The Divisional Court held that the term “serious breach” must be considered in its entire context, within the scheme of the statute, the object of the Act and the intention of the Legislature. It said:

Repair and Maintenance Obligations The reasoning of the Court of Appeal did not spare the landlord in Murjay Construction Ltd. v. Abdslam et al. The landlord applied for an above guideline rent increase. In response, the tenants claimed the landlord was in “serious breach” of its repair and maintenance obligations pursuant to s. 126(12) and (13) of the RTA. The alleged “serious” breaches included:

• • • • •

Washers and dryers not functioning properly Dirty hallway carpets and a dirty sandbox A broken treadmill in the exercise room for two months The outdoor parking pad not being level Dust and dirt throughout the building because of exterior construction.

At the hearing, the tenant witnesses admitted that each issue was not “serious”. The LTB applied the following to determine whether there was a serious breach:

“I interpret one of the Act’s primary objectives as being to ensure a fair balance between the rights and obligations of both landlords and tenants in the context of an historical power imbalance in favour of landlords.”

• •

The breach must ﬁrst be current and unresolved. The landlord must have either been advised by the tenant, or ought to have known of the breach.

The Court also held that the objects and scheme of the TPA [now RTA] is to achieve a balance between a landlord’s right to possession and tenant’s right to reasonable treatment. It also concluded that whether a “serious breach” exists must be determined through a pragmatic, balanced and contextual approach including consideration of:

• •

The nature of the alleged breach The duration of time since the landlord became aware of, and The reasonable eﬀect or impact on the tenant(s).

• • • •

The length of time the deficiency existed The causal connection between the failure to repair and the deficiency The absence of efforts by the landlord to deal with the deficiency The severity of the health and safety risks produced by the deficiency.

As well, a landlord must be in breach of its obligations at the time of the hearing, not at some point in the past, or potentially in the future. The Court held that, while numerous breaches existed, they were not “serious”. The Court conﬁrmed that a landlord has the right to give notice of termination if the landlord wishes to demolish premises when faced with premises “that are in need of substantial repairs or upgrading in order for the premises to continue to be usable as residential premises” and it held that: “The owner has the right to make a rational choice from a range of available options, one being demolition.” This reasoning was applied even where the condition of the premises has resulted from the owner’s neglect. The Court of Appeal has declined to hear the appeal.

14 Canadian Apartment Magazine

In analyzing a breach a member must consider:

•

The Board found, what seem to the authors to be trivial, breaches to be serious in nature and current and ordered that the rent could not be increased until the serious breaches were remedied and a motion brought by the landlord. In so doing, the Board reasoned: “If a landlord fails to make a number of minor repairs required, for which notice has been given to the landlord, within a reasonable time frame, or repeatedly ignores requests for necessary repairs or maintenance, the landlord may be in serious breach of the landlord’s obligations in this regard. This should be so even if each one of the minor repairs, if considered by itself and without regard to the time taken to repair, would not be considered to be severe or have a reasonable adverse impact on a tenant.” It is not possible to reconcile this decision on the issue of “serious breach” with the Divisional Court decision in Puterbough. On balance, 2007 was not a good year for landlords. CAM

Headquartered in Toronto, Aird & Berlis LLP provides a wide range of legal services. For more information visit the company’s website, www.airdberlis.com

We’ll Treat It Like It Was Ours! Your properties are important investments to be handled with care and respect. You can rest assured, MetCap Living knows this ﬁrst hand. With over twenty years of proven success, the MetCap Living team will ensure your ‘little nest egg’ is safe, allowing you to breathe easy, as well as relaxed and free of concern. We know your world, because we live it on a daily basis. Marketing, leasing, accounting and site management — in fact, anything and everything you require to provide a better living experience — MetCap Living can deliver. We’ll tailor our expertise and well established infrastructure to meet the speciﬁc needs of multi-unit properties. Think of us as a breath of fresh air. Always ready. Always professional.

Trust MetCap Living–We’ll be there! To find out more about our property management services please contact Anne Meinschenk, Director of New Business Development, MetCap Living 416-993-4305 or anne.meinschenk@metcap.com

www.metcap.com

property management

Less Headaches, More Proﬁt Hiring a third-party manager will reduce your management headaches. It can also improve your bottom line. by Anne Meinschenk

When faced with the question of hiring a third-party property manager, many apartment building owners think that no one can do the job as well as they can. They ask themselves, why should I pay someone to do something I can do myself? But, if you think about it, hiring someone to help solve your problems could make your business more profitable. That’s because there are many aspects to property management. Are you an “expert” in every area of property management? How many “experts” do you have to employ to run your business? For instance, do you have an accountant, a plumber or an insurance agent? Professional, or third-party managers, deal with the problems you are facing on a day-to-day basis. Property management companies have, or should have, the experts and the expertise to solve your problems in an efficient, cost-effective manner. Here are five ways that a third-party property manager, can reduce your headaches and increase your profit.

16 Canadian Apartment Magazine

Capital Improvements It doesn’t matter if your building is an A, B, C or D class building, it will need capital improvements. If you are considering installing a new boiler, new windows or putting on a new roof, you might want to hire a consultant to help with the engineering and financial implications. That’s where a third-party manager can help. For instance, some professional third-party managers have engineering staff that can both design and specify the needed improvements. Proper specifications are essential to creating a cost-effective plan. They ensure that the companies bidding on the job are all bidding on the exact same thing. Secondly, a third-party manager should ensure that companies presenting a bid are qualified to carry out the work. If you’ve ever tried to hire a contractor on your own, you know that checking references is something you absolutely have to do. Many third-party managers have a long-term relationship with these contractors and suppliers gained from many years of working together. For a building owner, that can mean savings

“Yardi Voyager streamlines our operations and provides customized reports to fit our property management needs.” Dean Pandurov, CEO PAN Group Properties

Yardi congratulates PAN Group Properties and wishes them continued success. For the fourth year in a row, PAN Group Properties was voted “Best Property Management Company” by Durham Business Times. Yardi is proud to be part of the infrastructure that helps PAN Group Properties provide their clients with superior service. Using Yardi Voyager™ and Yardi ASP Hosting Services, PAN Group Properties expertly manages residential, commercial, and self-storage properties in Ontario, Canada.

For more information, call 1- 8 8 8- 569 -2734 or visit us online at www.yardi.com

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11/7/2007 9:46:14 AM

as contractors and suppliers are willing to give a better price to someone who can offer them a larger volume of work.

Refinancing If you are faced with major upgrades, you many need professional advice on how best to finance the work. Whether you need money for a special project or you need to refinance your mortgage, a third-party manager should have connections with many lenders. If they do, they can advise you on the best package in terms of variable or fixed rates, short or long terms, and open or closed mortgages. In any case, you should ask your property manager to research all these options and present the results to you. Even if you are not making capital improvements, proper

Vacancy Reduction For many landlords, this is the area where they need the most help. And you many not even know it. Suppose you have an A-class building with no vacancies. You might think you have no problem, but if there are new condominium buildings springing up around your building, you may have a problem. If your building is 40 or 50 years old it will have to compete with these newer buildings. You might have to bring your décor upto-date or improve the kitchens and bathrooms in your suites. If, on the other hand, you have a vacancy problem, a professional manager will have several solutions. For instance, you may have a website, but can potential tenants find it? A large third-party manager gets thousands of hits. In our case we get 25,000 hits a month, or 300,000 hits a year. That, combined

Secondly, a third-party manager will concentrate not only on increasing your occupancy but on simultaneously raising your rents to market levels. financial advice can save you money when refinancing a mortgage. Depending on your situation, you may be planning on selling the building or it may be a long-term hold. Either way, a third-party manager that offers financial advice will take the total situation into account. Even if your building is mortgage free, you might need financial help. The building may be mortgage free now, but when you chose to sell or pass the building on to your heirs, there will be capital gains tax owning. If you have owned the building for many years, the capital gain can be substantial. If you chose to leave the building to your heirs, they may need to place a mortgage on the property just to pay the capital gains tax. As you can see, getting expert financial advice can save you, or your heirs, a lot of money when you sell your building. If you are considering hiring a professional manager, ask if they offer these services. Another area of financial planning offered by some thirdparty managers is completing due diligence on properties that you are buying. This can involve weeks of work as accountants go over the books and engineers assess the building’s condition. Based on these results, you, as an investor, will know what you should be paying for the building.

Insurance Costs As all owners know, insurance is a major cost. Third-party managers can help owners in two ways. They can make sure that you have the coverage you need and they can often get that coverage at a substantially lower price. Each insurance company has a different rate. If you own only a few buildings, they may assess you as a higher risk and quote you a higher rate. If you are part of a larger portfolio you could get a discounted rate based on spreading the risk over a much larger portfolio.

18 Canadian Apartment Magazine

with other branding and advertising opportunities that can be made available, will solve the problem. Secondly, a third-party manager will concentrate not only on increasing your occupancy but on simultaneously raising your rents to market levels.

Incremental Revenue: Cable and Laundry Services Managing your cable TV and laundry services is another area where a third-party manager can increase your profits. Some third-party managers have deals with cable companies that offer building owners a per door fee for each unit and also a percentage of the fees that a tenant pays for other services they buy from the cable provider. So if your tenants are buying an Internet connection or a cell phone from the same cable company, you will get a percentage of the tenant’s total bill. For laundry services, it’s likely that a third-party manager can negotiate a better per-machine fee than you currently receive. That’s because laundry companies are more inclined to give a larger per-machine fee to a third-party manager, as they have more units under management. As you can see from the few examples we have given, it’s quite possible that contracting out the management of your building to a third-party manager could significantly reduce your management headaches, while increasing your profits. CAM

Anne Meinschenk is the Director of New Business Development for MetCap Living, a company that specializes in managing multi-unit residential buildings. For more information, please contact Anne at 416-993-4305 or anne.meinschenk@metcap.com

The PAN Group team (from left to right): Shelby Whittick, Andrea Spears, Margaret Lamb, Erika Bradbury, Nancy Keenan, Dionne Kukoly, Dean Pandurov, John Bain, Ida Colbary, Jane Laurie, Val Lyons, Sheila Fetterolf and Kristian Pandurov.

PAN Group Properties is pleased to thank: Rogers, Yardi, Enerplan, AE Sharp, Solucore, Brook Restoration, GottaRent, Air Aid Mechanical, Miller Bernstein & Partners and, Gerrits Property Services for both past and on-going relationship and is looking forward to continued growth and building a bright future together.

Dean Pandurov, CEO PAN Group Properties 177 Nonquon Rd. 20th Floor Oshawa, ON L1G 3S2 Tel: 905.579.1626 Fax: 905.579.947

multifacts Nova Scotia to Amend Rental Conversions Act Late last year Nova Scotia Municipal Relations Minister Jamie Muir introduced amendments to the Rental Conversions Act. The amendments are aimed at clarifying the information that must be filed by a landlord looking to convert his or her property to a condominium. It will also stress that tenants will be able to remain in a unit for 12 months after the date of a proposed conversion. Muir said the changes were the “direct result” of collaboration and discussions with the landlord and tenant communities and were intended to enhance Nova Scotian communities.

RCMP Blocks House Demolition – Tenants Still Inside The RCMP was called to a house in January when the owner of the house in Chilliwack, B.C., began a planned demolition. Five former renters were still inside. One of the former tenants, Veronica Herrling, said her grandmother was in the house when a backhoe operator turned up and tore away the front wall, exposing the living room to open air. “All five of us were in the house when they started tearing it down,” another resident said. “They knew we were in there.”

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The RCMP soon arrived and ordered the demolition stopped. “Might as well tell the dozer operator to take an extended lunch because Grandma’s not going anywhere,” RCMP Corporal Wayne Bier told the owner’s representatives. The owner had tried to evict the residents earlier in the week, but they refused to leave, claiming paperwork for the eviction has not been properly filed.

Landlord Wants Courts to Rule on Smoking Tenant A Montreal landlord is going to court to overturn a July rental board’s ruling in favour of a smoking tenant. Last summer the Regie du logement ruled pack-a-day smoker Sandra Fowler could keep puffing away on the secondfloor of her building despite complaints by owner Olesia Koretski. She lives below Ms. Fowler and said that smoke was entering her apartment and aggravating her asthma. Ms. Koretski was also worried about the effect the secondhand smoke could have on the unborn child she was carrying. The board ruled that Ms. Koretski’s argument that the initial application form that Ms. Fowler filled out, which stated that smokers and people with pets were not welcome to apply, was not enough to oblige Ms. Fowler to butt out when inside.

National Rental Vacancy Rate Remains at 2.6 Percent The average rental apartment vacancy rate in Canada’s 34 major centres remained at 2.6 percent in October 2007, the same rate recorded one year earlier, according to the Rental Market Survey released late last year by Canada Mortgage and Housing Corporation (CMHC). “Strong employment growth, solid income gains, and high immigration levels continued to support strong demand for both ownership and rental housing,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “The rising gap between the cost of home ownership and renting also kept demand strong for rental accommodation.” In October 2007, provincial vacancy rates were lowest in British Columbia (1.0 percent), Saskatchewan (1.2 percent), Manitoba (1.5 percent), and Alberta (1.6 percent). The strong economic expansion in the western provinces continued to attract workers from the rest of Canada. In Ontario, vacancy rates were lower than last year in seven of 15 major centres, higher in four and unchanged in four. At 0.6 percent, Greater Sudbury registered Ontario’s lowest vacancy rate. Vacancy rates remained above provincial averages in centres such as Windsor (12.8 percent), St. Catharines - Niagara (4.0 percent) and Thunder Bay (3.8 percent). The vacancy rate in Ontario’s two largest centres was unchanged from last October with Ottawa at 2.3 percent and Toronto at 3.2 percent.

≥

multifacts In Quebec, vacancy rates went up in Montréal, Sherbrooke and Trois-Rivières, and declined in Gatineau, Québec and Saguenay. Gatineau’s vacancy rate decreased to 2.9 percent in October 2007 from 4.2 percent in October 2006, while the vacancy rate in Montréal increased by 0.2 of a percentage point to 2.9 percent over this period. Québec saw a 0.3 percentage point decrease in its vacancy rate to 1.2 percent. In the Prairies, vacancy rates were below two per cent in all five metropolitan areas, even though three of the five major centres recorded increases. In Alberta, weaker net migration and indirect additions to the rental supply via condominium investments led to higher vacancies in Calgary and Edmonton. Vacancy rates increased to 1.5 percent in Calgary (up 1.0 percentage point) and Edmonton, 1.5 percent (up 0.3 of a percentage point). In Saskatchewan, a rapid improvement in net migration and escalating home ownership costs led to fewer vacancies. Saskatoon’s vacancy rate decreased by 2.6 percentage points to 0.6 percent between October 2006 and October 2007, the sharpest drop among Canada’s major centres. In Winnipeg, the vacancy rate increased marginally from 1.3 to 1.5 percent. In British Columbia, vacancy rates remained unchanged in Vancouver (0.7 percent) and Victoria (0.5 percent), but rose marginally in Abbotsford (up 0.1 of a percentage point to 2.1 percent). British Columbia’s newest Census Metropolitan Area, Kelowna, saw its vacancy rate decline from 0.6 to 0.0 percent. Increased job opportunities, the rising cost of home ownership, a high level of immigration and longer completion times on new multiple-unit projects kept rental demand strong. On the supply side, there have been very few new rental projects built in B.C. during the last year. In the Eastern provinces, Halifax vacancies declined a tenth of a percentage point to 3.1 percent in 2007. Declines were also recorded in St. John’s, 2.6 percent (from 5.1 in 2006), 5.2 percent in Saint John (from 6.8 percent) and 4.3 percent in Moncton (from 5.6 percent in 2006). An analysis of the statistics published by the Canadian Federation of Apartment Associations says the availability of rental suites remains at healthy rates, and is higher than the vacancy rate in all CMA’s. Even where vacancy rates are low, rental suites are still available because of tenant turnover. For example, in Calgary and Edmonton, the vacancy rate is 1.5 percent, but the availability rates are 2.9 percent and 2.4 percent respectively. According to the CFAA report, that means that substantial numbers of rental suites were available for rent in Calgary and Edmonton in October 2007, even though the vacancy rate is low. In addition, other rental suites are available in the secondary market (i.e. rental condominiums and one and two unit buildings). The highest average monthly rents for two-bedroom apartments in new and existing structures were in Calgary ($1,089), Vancouver ($1,084), Toronto ($1,061) and Ottawa ($961), followed by Edmonton ($958) and Barrie ($934). The lowest average monthly rents for twobedroom apartments in new and existing structures were in Trois-Rivières ($487) and Saguenay ($490).

Roto-Rooter Expands Presence Roto-Rooter Plumbing and Drain Service of Toronto has expanded its presence in Ontario by opening franchise operations in the rapidly growing communities of Barrie and Newmarket as well as the area covered by Ajax, Oshawa, Pickering and Whitby. Roto-Rooter has been operating in Ontario for the past 25 years and has offices throughout the Greater Toronto Area, Hamilton, Burlington, and the Niagara region. Founded in 1935, Roto-Rooter is the largest provider of plumbing and drain cleaning services in North America. The first mechanical device ever invented to mechanically clean blocked sewers and drains without digging was called the ‘Roto-Rooter’ machine. To contact your local Roto-Rooter office call: Toronto and GTA: Oshawa: Barrie: St. Catharines: Newmarket: Hamilton/Burlington:

416-503-4444 905-879-0003 705-792-6666 905-687-3900 905-830-0400 905-570-8788

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CMHC & Conventional Mortgages for: Multi-Family Rental Properties Senior’s Housing Projects Commercial Properties Construction Projects

Vancouver Brian D. Kennedy Phone: 604-685-1068 Fax: 604-683-2787 Email: vancouver@peoplestrust.com

Calgary Read Jones... Ad Dennis Aitken or Chris Hudson Phone: 403-237-8975 Fax: 403-266-5002 Email: calgary@peoplestrust.com Toronto Michael Lombard Phone: 416-368-3266 Fax: 416-368-3328 Email: toronto@peoplestrust.com TM

www.peoplestrust.com january/february 2008 21

industryprofile

Inve ting in Your Building by Randy Threndyle

Michael Bolahood

In Torontoâ&#x20AC;&#x2122;s competitive rental market, retaining existing tenants and attracting new ones is often the difference between a profitable building and one that disappoints. For Greenwin Property Management, completing capital improvements is one way to reduce operating costs and maintain high occupancy and satisfaction levels. 22 Canadian Apartment Magazine

Mark Kesseler

industryprofile

For building managers, convincing building owners that they need to spend money on a multi-residential building isn’t always an easy sales pitch. Especially if the required spending includes capital expenditures that could easily cost hundreds of thousands of dollars. But, for a building to remain attractive and competitive, it has to meet the needs of both current and future residents. In many cases that can mean installing a more efficient heating system, rebuilding elevators or replacing plumbing fixtures with new water saving models. While some of these repairs are expensive, the payback is reduced energy costs and increased tenant satisfaction and comfort. Improvements can also keep an older building competitive with both rental condominiums and other newer rental buildings in the area. For Greenwin Property Management Inc., one of Toronto’s largest property managers, making the case for capital improvements involves making a detailed business case to the owner of the building. The company manages 16,500 multi-residential units for a variety of owners. Many buildings in the company’s portfolio were built in the 1960s and 70s. As Michael Bolahood, Greenwin’s Chief Executive Officer explains, building owners really have only two choices. They can continue to spend money to repair outdated systems, or they can spend the money to bring them up to date. That can be especially true for older heating systems.

january/february 2008 23

Over the past few years the company has upgraded the heating plants in several of its 200 to 500 unit multi-residential buildings. The buildings were constructed in the 1960s and 70s and most still had the original heating plant in place. “After 30 to 40 years they had reached the end of their useful life,” says Bolahood. “Looking at increasing costs for energy and efficiencies in the boiler equipment itself, we decided to completely retrofit the heating plant for several of these properties.” That included new boilers, new control systems and new piping configurations. In order to make a case for the improvements, Greenwin puts forward a detailed business proposal that explains to the owners what needs to be replaced and why. The number one reason for replacement is that the existing equipment has reached the end of its useful life and there’s really no point in pouring any more money into it. Secondly, a new heating plant is more efficient and more reliable. It is also better from a tenant comfort standpoint. Included in the business plan would be a payback period that would tell the owner how long it will take them to recoup the money they are spending. “You have to make the business case. These are very expensive retrofits sometimes costing hundreds of thousands of dollars,” says Bolahood.

Boiler Retrofit In one building near Yonge and Eglinton in mid-town Toronto, the cost of installing new boilers, controls and piping was $440,000. The building had approximately 500 suites heated by gas-fired boilers with in-suite hydronic baseboard heaters. In terms of energy savings, the upgrades reduced the building’s energy consumption by $126,000 per year. When combined with Federal energy reduction incentives of $145,000 the payback period was only 2.3 years. The Federal incentives which were available at the time of the conversion have now been discontinued. The work involved installing more efficient boilers, new control systems and reconfiguring the piping system. Mark Kesseler, Director of Physical Operations for Greenwin says those are the key items that will generate savings for building owners. Kesseler, installed three new mid-efficiency boilers at the

24 Canadian Apartment Magazine

site in question. Five of the existing boilers were left in place. Some of the existing boilers had been replaced over the years. The three new boilers have sufficient capacity to supply the building’s heating and hot water needs throughout much of the year. During the winter months, the original boilers operate on only the coldest days of the year and are isolated from the primary loop, during milder weather. Kesseler describes it as a hybrid system, rather than a complete retrofit. In order to increase efficiency Kesseler redesigned the piping system. The original heating system had four separate loops. Some boilers were dedicated to domestic hot water, while others were dedicated to heating specific areas of the building. The new piping system connects all the boilers to one system. That creates redundancy, says Kesseler, as if any boiler breaks down, any other boiler in the loop can take its place. New building automation systems (BAS) or direct digital controls (DDC) also help to increase the system’s efficiency by controlling which boilers are on call and which are shut down. Since all the boilers are on one loop, the control system is able to turn boilers on and off according to demand in the building. Since all the boilers are controlled through one primary loop, the DDC delivers the boiler water to all the ancillary

PREMIER ELEVATOR EXTENDS BEST WISHES TO GREENWIN PROPERTY MANAGEMENT FOR SUCCESS THROUGHOUT THEIR FUTURE,

january/february 2008 27 25

“Our ongoing resident surveys over the years consistently listed elevator performance as the primary concern amongst residents,” says Bolahood. It’s also the most common criticism of rental agents who find it a difficult objection to overcome. The suite and building may show well, but if the elevator is slow, both prospective and existing tenants may well consider moving on to another building. The goal in an elevator retrofit is to bring a 1960s elevator up to today’s standards. That means faster operating times, faster door times and fewer breakdowns. In a typical major retrofit, almost every component except the shaft and the rails are replaced. A complete overhaul also reduces elevator downtime as newer systems are less likely to breakdown and parts are easily obtained. “The last thing you want to hear is that an elevator is going to be down for a considerable amount of time because a component is obsolete, no longer in stock or has to be re-built, says Bolahood. Modern solid state control systems also provide a much smoother ride than the older mechanical control systems.

Reduced Electric and Water Bills

heating systems of the building. The systems include domestic hot water, suite heating and make up air. This control is precise and eliminates temperature ﬂuctuations associated with the older system, resulting in better tenant comfort and supply of domestic hot water. The new control system also allows the building operator to optimize the eﬃciency of the heating plant and control ancillary systems such as the suite heating temperature from a central location, rather than from inside the suite. One area where a new control and piping system was able to generate huge savings was in domestic hot water. The original system heated 9,600 gallons of hot water which was stored for use by residents. The new controls allow for hot water on demand. Only 400 gallons of hot water is stored. The rest is generated as needed. “Building automation allows us to oversee the entire building, so when there is a need, the system starts making hot water. If it senses a need, it brings another boiler on line,” says Kesseler.

Improved Elevator Performance Elevators were another area where Greenwin clients opted for upgrades, electing to rebuild almost all the elevators in the company’s larger-building portfolio. 26 Canadian Apartment Magazine

Other areas where Greenwin has made changes to its portfolio is in the installation of more efficient lighting and plumbing fixtures. Fifteen to twenty years ago, says Bolahood, Greenwin changed many of the original incandescent fi xtures in its buildings and replaced them with fluorescent tube lighting. Today they’ve moved that program to a second phase, replacing the fluorescent tube lighting with newer compact fluorescent light bulbs. The benefits are twofold. There are further energy savings and in some cases increased light levels in hallways and parking garages. Kesseler says the price of compact fluorescent bulbs has come down over the past few years. That’s reduced the typical payback period to two years. The company is also encouraging residents to utilize compact fluorescent bulbs inside their suites. Although there are some restrictions, the move to compact fluorescents is growing. Some restrictions are that they can’t be used in enclosed fixtures or on circuits with a dimmer switch. An additional area where Kesseler recommends that landlords make changes is in plumbing fixtures.

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Low-flow toilets and showerheads use half the water of older models and will produce a payback in about two years. And, most municipalities have incentive programs that offer cash for replacing older plumbing fixtures. “You can’t ignore your utilities anymore. It’s such a large portion of your operating budget,” says Kesseler. “To leave old lighting and old toilet systems and not control your HVAC systems is money out the window.”

Credit Card Payment Offered Offering different methods of payment is one more area where Greenwin is finding that landlords have to adapt. While rental cheques haven’t quite disappeared from the scene, more and more tenants are opting to pay the rent electronically, either through a credit card payment, online banking or using Interac. Credit card payment offers convenience to tenants and allows them to collect loyalty points. However, from the landlord’s perspective there is a significant cost as credit card companies charge for the service. Despite the additional costs, a number of owners of Greenwin-managed buildings are accepting credit card payments. Jose Rivera, Greenwin’s Marketing Manager says the downside of a credit card payment is that landlords pay a fee for every transaction incurred. On the plus side, residents see it as a convenient method of payment. It also helps with retention as tenants use their rent payment as a way to gain credit card loyalty points. Rivera says if a tenant is using a credit card to gain points, they are less likely to move and go back to using cheques. It can also be a bonus or up sell to your building since few companies offer credit card payment, he says. Rivera says you have to achieve good penetration levels to make it worthwhile. “If only two percent of tenants were using the card, it would not be productive, but at the 20 to 30 percent range, it’s worthwhile.” C AM

28 Canadian Apartment Magazine

Giving Back to the Community For the staff and ownership of Greenwin Property Management, giving back to the community is a necessary part of any organization. To do that the company has organized food drives involving Greenwin staff and residents as well as a unique partnership with the Hospital for Sick Children in Toronto. The program offers families a rent-free apartment to live in while their children are in the hospital. The hospital, often referred to as Sick Kids Hospital, is one of Canada’s largest children’s hospitals. As such it often has patients from across Canada. Many of the children are at the hospital for several months and while they are in Toronto their parents and other family members need a place to stay. The Al Green family, which owns several buildings in the Greenwin Portfolio, has set aside four apartments for use by families whose children are long-term patients at Sick Kids. The apartments are maintained and furnished by Greenwin staff with help from several Greenwin suppliers such as the Home Depot Supply, Rogers Cable, the Brick and Sleep Country Canada. To make the apartments more comfortable for families and the children, Doug Geldart, a Greenwin Project Manager, created customized murals for the apartments. The murals help brighten the lives of the children during their stay. The apartments are in buildings that are located along Yonge Street, so they are convenient to the Toronto subway system and the hospital. The decision on who uses the apartments is made by the hospital and Ronald McDonald House, a charity dedicated to helping children with serious illnesses or disabilities. Since beginning the program two years ago the units have housed many families from all across Canada. In 2006 the initiative won the Federation of Rental-Housing Providers of Ontario (FRPO) award for Outstanding Community Service.

a sense of vision superior residential property management

A most rare quality. The ability to see further. To strive harder. To serve better. Our goal. Your reality. For highly professional, experienced residential property management, call Michael Bolahood

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marketing

Everything Has a Cost Per Something! by Jason Leonard

Evaluate the effectiveness of your advertising with a cost per contact measurement. Have you ever noticed how many “cost per” calculations are used in the apartment industry? It seems that everything is referred back to a “cost per something” equation. It’s for this reason that I feel I need to apologize a little. In my last article I wrote a line that I never realized would become the focal point of the article for so many people. I assumed, and quite incorrectly at that, that everyone used a formula to calculate their “cost per contact” when measuring the return on their advertising investment. So it got me thinking. If property owners are not measuring their cost per contact, then just how are they measuring the effectiveness of their advertising? After all, being involved in the industry myself, I felt compelled to gain a better understanding of just how this is done. Alas, after many calls, the consensus seems to be that most companies rely mainly on feedback from their front-line staff. Think of all the common measurements used in the industry. There’s cost per door or cost per square foot when looking to buy a building. No one ever buys a building based purely on the asking price. Or how about cost per kilowatt or cost per cubic metre when measuring your utilities? If you have just completed a major renovation such as upgrading your wiring or installing low-flow toilets and shower heads, you would measure these costs to see what your return on investment (ROI) is going to be. When renovating your building, typically you break down your costs on a cost per-suite basis. My point is that when calculating the return you get on advertising, doesn’t evaluating your cost per contact make the most sense? With that in mind, here is a simple formula to use for calculating your cost per contact for each ad you have running. Simply duplicate this formula in Excel to quickly calculate your cost per contact for all your advertising. Advertising Source

ABC Ad Medium

Number of calls received

Number of emails received

Total contacts

Cost of advertisement

Cost per contact

30 Canadian Apartment Magazine

To use the formula, add your emails and calls together and divide the total by the monthly advertising expenditure. There are reasons why you might include a higher cost per contact medium in your marketing mix. One is that your most cost-effective medium doesn’t supply enough total contacts. Another is that you know, or are fairly certain that the highercost media offers a stronger closing ratio. Or perhaps you feel the other media are also great buys even if their cost per contact is higher than your best option. Once you have established use of this simple formula, there are things you can do to enhance the data you receive. For example, you may want to add a quality index into the equation. This would allow you to apply a multiplier that adjusts the results for poor quality calls and/or emails. There’s even a fairly accurate way to determine your “cost per lease.” It just depends on what your needs are and how in depth you want to get with your analysis. Seeing how I’ve already created a few spreadsheets with some variables for others, if you send me your contact info and an idea of what measurements you want to analyze, I’ll see if I have something that fits your needs. If not, I’ll try to customize a formula for you in Excel format to suit your needs. My contact info is in my by-line below. In a cost per something obsessed industry, it would seem that cost per contact measuring deserves its rightful place. How else will you know if all that money you’re spending is money well spent? CA M

Jason Leonard is the Director of Marketing for gottarent.com. He can be reached at jason@gottarent.com or toll free (888) 966-4966 ext 225

Think design. Because good design is good business.

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what’s hot what’s not

Oﬀers Opportunities and Challenges by Robert Helyar

Designing a multi-residential building for student housing requires modifications to both your building and your leasing strategies. Student housing is a unique and interesting market. While this market presents new opportunities, it also presents new challenges. In past years landlords have preferred to avoid renting to students whenever possible as the thought conjured up images of parties, noise complaints and damaged suites. Now however, student housing has now taken a whole new approach and some properties may even be considered luxury buildings due to the amenities provided. Nothing attracts the Y generation, as those born between 1977 and 1994 are often referred to, more than technology. This generation is very Web savvy and tech oriented. Here are just a few of the common amenities you will find at an off-campus student residence: • • • • •

Wireless Internet cafes Entertainment lounges equipped with large-screen TVs, Wii’s, Xboxes and various other video game consoles, Fully equipped fitness facilities, and Onsite movie theatres.

A great off-campus student housing property will feel like it is just an extension of the campus. If a property is to be used for off-campus student housing, not only will there be modifications to the building itself, the marketing and leasing strategies will also be different. 32 Canadian Apartment Magazine

Although excellent customer service should be provided at all times, it is very important that on student move-in day your staff is at their peak performance. A lot of these students will be leaving home for the first time and be accompanied by parents – many of whom may be paying all or a portion of the rent. The parents must be confident that their son or daughter will be comfortable in their new “home away from home”. Invest in a modern website that will highlight your property’s personality. You can also provide students with the option to obtain an email address through your website; this will provide ongoing indirect marketing each time they use their account. Providing a social calendar of events that encourages the participation of the residents and keeping an up-to-date version on your website for students to view is an excellent way to attract the attention of prospects. Allowing maintenance and other concerns to be submitted electronically or offering a live chat option during business hours is also an attractive feature. The traditional marketing methods such as signage and newspaper ads will still attract some attention; especially that of the parents looking on behalf of their student. However, you may also want to consider some innovative marketing techniques such as:

• • • •

A weblog MySpace page Facebook group or ad A video clip on YouTube.

These are a part of everyday life for most students. Another cost-effective option is online advertising on a site such as:

rather than a usual 12-month lease. There may be a concern of vacancy during the summer months, but offering an incentive for longer-term leases or early sign up of returning students may help offset this slow season. While it is still apartment living, student housing is a whole new world of property management.

Robert Helyar is the President of DALA Group of Companies, North America’s leading leasing and marketing specialist in the multi-residential industry. DALA has been at the forefront of the multi-residential industry for over twenty years. For more information visit our website www.dala-inc.com or email info@dala-inc.com CA M

• www.kijiji.ca • www.gottarent.com • www.craigslist.com. Facebook is defined as “a social utility that connects you with the people around you”. This very popular website has over 59-million active users and offers an advanced technique that will allow you to target a specific market for your ad if you choose to do so. This can be a specific network, for example the University of Toronto. It will only be visible to users that belong to this network or a specific region such as Waterloo and will only be visible to users that have this city registered as their location. These ads can be customized to fit your advertising budget. While Facebook does provide an excellent opportunity to promote your property to a vast market at a low cost, one should also keep in mind that all Facebook users have the ability to create groups. Based on personal opinions and/or experiences, they may create one that will reflect negatively about your property. An occasional search may be beneficial as it will keep you aware of any such groups and provide you with the opportunity to address issues if needed. When leasing a student housing building, the student lifestyle should be considered. As many students may not have employment or credit history, alternative acceptable criteria should be established. Ensure your staff is fully aware of these terms as this will keep the application process flowing smoothly. When compared to a standard rental building, the paperwork on a student housing property may be tripled as there are generally multiple applications and leases for one apartment unit. Another factor to consider is that many students attend semesters that typically run September to December, January to April and May to August. Therefore, it may be worthwhile to consider short-term leases

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january/february 2008 33

community facilities

Give Your Laundry a Makeover by Dick Casey

A comfortable and well-maintained community laundry can help you attract and retain residents.

Let’s face it; laundry is something we have to do. We generally don’t enjoy it or look forward to it. There’s a reason laundry is a “chore.” And believe me, if your property’s laundry room is like many out there, your residents hate the chore even more. The dark and dingy space with rundown equipment may even be costing you tenants. Progressive property owners understand this and know that a sharp looking laundry actually can help attract and retain residents. So, too, do the route operators who provide and service the laundry equipment installed in many multi-unit buildings. In some cases, route operators are the ones rehabbing the laundry rooms to make them more attractive for resident use. But where to start? The Laundry is Community If you’re rehabbing a property, the first thing to consider is the value of the community laundry room concept versus inunit washers and dryers. The popular trend used to be installing laundry equipment in-unit as a convenience for residents. But as water and utility rates continue to rise; this just doesn’t make sense to property owners — especially given the inefficiency of many of the products being installed. Convenience may contribute additional inefficiencies as the in-unit hookups increase the likelihood of residents washing more often and not utilizing the full capacity of the washer. That means increased and unnecessary water consumption. Community laundry rooms, however, promote less frequent washing 34 Canadian Apartment Magazine

with larger loads maximizing the capacity of washers as well as reducing residents’ time spent on this chore. A wider focus on being more “green” in buildings has pushed the move away from in-suite washers and dryers. Slowly, there’s been a swing back toward community laundries. Owners needn’t install nearly the amount of equipment as in-unit, plus they save additional up-front costs in reduced plumbing. Commercial quality equipment installed and maintained by route operators takes away the worry and expense of repairs. But in a competitive multi-unit housing market, the key benefit of today’s community laundry rooms is a greater sense of “community.”

Community Starts with Convenience Creating a quality community laundry room begins with a quality location. Think of residents’ convenience, especially knowing they’ll be lugging laundry baskets to wherever the laundry is located. Keeping stairs to a minimum is important. Highrises may see value in placing a laundry on multiple floors. I recommend a walk-through with your route operator. This can be helpful as they’ll be able to offer ideas and assess whether certain areas make sense or are cost prohibitive to relocate necessary utilities. Beyond convenience, think about the overall look of the laundry. Making it an attractive place where residents want to sit and relax is what separates a stark utility room from an inviting community laundry area. Developers should work toward creating a space that fosters that idea of community. The laundry is a place

where people meet their neighbors. Your job is to ensure they want to stay and chat. Some of the best laundries I’ve seen have been sited near activity areas such as an exercise room or lounge. Others even have included these uses as part of the laundry. Where we’ve seen the best examples of this tack has been in the college and university world. Colleges are trying to make oncampus housing far more modern and desirable — essentially competing with owners of off-campus apartment complexes as well as on-street coin laundries. A large part of their approach has been thinking outside the box in terms of the laundry. Schools such the University of British Columbia have redesigned spaces, with some even incorporating study areas, lounges and other amenities to create more of a gathering area.

Basic Elements Developers seeking maximum impact of their laundry with residents may decide to consult an interior designer for assistance in choosing colors and creating a cohesive look. We know not all of us have those kinds of resources, or do we? Perhaps connecting with residents and fostering community begins with something as simple as asking for their “expert” opinions. Owners or managers could post their colour ideas and poll residents on their preferences. As the users of the laundry, residents will have input into selecting design elements. It’s another small gesture that can have a large impact on residents’ perceptions of the property owner’s commitment to tenants.

In most redesigned laundries, lighting is integral. A community laundry should be bright and well-lit. Windows definitely help in this area but aren’t a must-have. Fluorescent lighting units easily deliver a great deal of light to rooms while also being extremely energy efficient. Advancements in technology also have yielded a variety of options. Fluorescent light has softened and isn’t quite as cold as it was in the past — giving management great efficiency while residents see a warm, inviting environment. Comfortable chairs and couches can add to the laundry’s amenity quality as can a large television. Basically your goal should be to create a place where you’d feel comfortable waiting for your laundry. Again, managers may want to solicit input from residents on what additions they’d welcome in the laundry. Functionality is equally important. Laundry carts and adequate folding space assist your residents with completing their task with minimal inconvenience. Of course all these components to a quality laundry are predicated on allocating adequate space from the start. In the next column we’ll take a look at laundry equipment, as well as payment and activation options to increase the amenity value of your property’s laundry. CA M

Dick Casey is director of multi-housing sales at Alliance Laundry Systems, the world leader in manufacturing commercial laundry equipment. He has more than 35 years of experience in the laundry industry.

Thinking of selling? We are interested in adding your building to our property portfolio.

Boardwalk is Canada’s largest residential landlord, with over 35,000 apartment units. For more information contact: Western Canada Lisa Russell, VP, Acquisitions ph: 403.206.6770 fx: 403.261.9251 e: lisa@bwalk.com

Eastern Canada Jean Denis, VP, Acquisitions ph: 514.732.2617 fx: 514.769.7464 e: jdenis@bwalk.com

bwalk.com january/february 2008 35

risk management

Fatal Fire Prompts Need to Assess all Risks

It’s reasonable to believe your tenants will act in a prudent manner, but it isn’t always realistic to expect it. Taking an approach to risk management that is above the legislated requirements may cost a little more money, but it will create a safer environment for everyone. by David G. Truscott

With December behind us and a new calendar year underway, we have all had plenty of opportunity to reflect on our year past. What we’ve accomplished, what we wished for, what we might have done. The media loves this time of year; there are countless opportunities to review and replay what went on with world issues, what went on in our working world, in politics, in sports, in our lives, both private and public. One recent media story arrived for us, just this week. The National Post reported on Monday, the 24th of December: “3 Dead in Fire; Mother, 2 children killed; 3 other youngsters survive”. Certainly this was terrible news for the family involved, and for their neighbours. And this was also not exactly the kind of news that a landlord would want to receive at any time, let alone on the eve of Christmas.

36 Canadian Apartment Magazine

According to the news article, it had been concluded that the main smoke alarm in the townhouse had been intentionally disconnected by the tenant. Undoubtedly triggered by this event, a snap inspection was performed on about ninety other homes in the same public housing complex where the fatal fire had occurred. That prompt and necessary inspection unveiled a serious problem. About ten percent of the homes inspected had had their smoke detectors removed, bypassed, or altered to such an extent that those life-saving devices were rendered useless. But why? The answer hangs over my head. As I write this column, I gaze from time to time at the ceiling in our weekend home,

and affixed to it, a smoke detector that occasionally blinks back at me. This particular model has warned our family many times, not of danger per se, but of a toaster gone past its mark, of an oven’s smoky reminder of a cleaning needed but forgotten until the smoke detector pierced the quiet. What is our family’s fast solution to this noisy nuisance? We usually open a window and a door. Notwithstanding this, in severe cases of smoke and noise, one can stand on a kitchen chair and pull the batteries, all the while cursing at a $10 device that was designed with the most honourable of intentions – to save lives. It should be noted here that on more than one occasion I have entered our family home, wondering, “what’s cooking,” only to find the round plastic cover from our smoke detector abandoned on the kitchen counter, its battery now unplugged and tossed aside. It’s my duty (not as risk manager to the family, but as patriarch) to replace the batteries and test the unit to ensure that it’s again functioning properly following its recent alarming and subsequent disarming. Truthfully stated, if I didn’t do it, it wouldn’t get done. Where is this leading? There’s only so much that a legislator can do to make it legally necessary to have a functioning smoke detector available to save a life. There’s only so much an architect, an engineer and a property manager can do to ensure proper placement of one of these devices that is both a necessity and an unwelcome nuisance to those living with one overhead. At some point individuals must take responsibility for their own actions. Society’s caretakers may say “enough is enough” and when called upon, assess the responsibility for such a tragic loss to the hands of those who tampered with the noisy device, rather than to those who may have made the device “too sensitive” or who may have hardwired it “a little too close to the kitchen stove”. Sad but inevitable, these are matters for a coroner’s inquest or the courts to sort out. That being said, is it possible that the responsibility for this tragic occurrence could rest (in part) with someone other than the individual that did the tampering? Let’s think about our own revenue producing properties for a moment. Are there any loose ends within our operations that could give rise to a situation that may result in injury or inconvenience to others? How common are these problems, and what are we doing about them? Does there have to be legislation in place to motivate you and your property management team to action, or is your organization more proactive than most? I know of a property owner (the owner of several highrise buildings) who constructed his buildings without balconies. In the eighteen years that those buildings have been standing, the owner proudly boasts that there have been no reports of property damage or injury caused by falling objects (or falling tenants, for that matter). That building owner’s choice to avoid the hazards surrounding a balcony (simply by not having balconies) is an effective risk-management strategy. While it’s reasonable to expect prudent behaviour from your tenants and their guests, it isn’t always realistic to do so. Even when the court of public opinion rules in our favour, it’s tragic

that we couldn’t have done more, or have given more thought on how to protect those tenants that apparently couldn’t think to protect themselves. Although the blame for a tragedy that occurs is not always to be spread among us, couldn’t we take pride in knowing in our own hearts that we did the right thing, not necessarily having walked the most economical path through our day to day endeavours? While we reflect on the past year, while we look ahead to the coming year, let’s ask ourselves – “what could we do better that will make a positive difference in the lives of our tenants, and what can we do that will provide a safer, more secure environment for our tenants to live in?” Using this approach in our day-to-day lives will likely be good for business, too. CAM David G. Truscott, CAIB, CRM is the President of Risk Review Inc., a risk management consulting practice. Their website and contact information for David can be found at www.riskreview.ca

january/february 2008 37

maintenance

Hi-Tech Cameras Identify Plumbing Problems by Larry Rothman

Cameras have become part of our daily lives and they are everywhere – security cameras, traffic cameras, dashboard cameras in police cars, and so on. Cameras have even become one of the most valuable tools in the plumbing business. Increasingly sophisticated fibre optic cameras that travel through pipes are used to identify damage and obstructions. Such cameras have also been employed to locate lost jewelry and other valuables, as well as locate and rescue wayward animals that have slipped into the pipes. Video Cameras in Plumbing A video camera allows for a visual inspection of underground sewer lines and other piping to determine the condition of the inside of the pipe. A flexible rod with a specially designed, high-resolution video camera on its tip is inserted into the pipe for inspection. As the rod is pushed through the pipe, the waterproof camera records its progress and findings. The condition of a line typically cannot be determined without a visual inspection using an in-line camera. Video cameras can be used to determine the integrity of pipes ranging from two inches to 48 inches in diameter, including drain lines, septic tank lines, floor drains, water lines, yard drains and vent stacks. Additionally, the video camera can be used to determine the location of laterals and manholes, as well as determine the depth of piping. Access to the pipe for inspection may be gained via a floor drain, clean-out or roof vent.

Video Camera Inspections Pinpoint Problems A video camera inspection can identify line problems that inhibit proper flow or create occasional or repeated backups including: • Broken, cracked or collapsed pipe – damaged pipes requiring repair or replacement. • Offset pipe – sewer pipes have become misaligned due to shifting soil, frozen ground, settling, etc. • Blockage – grease buildup or a foreign object is restricting or prohibiting proper flow and/or cleaning of the line.

• Corrosion – the pipe has deteriorated and/or broken, causing collapses in the line and restricting flow.

• Bellied pipe – a section of the pipe has sunk due to ground or soil conditions, creating a valley that collects paper and waste.

• Leaking joints – the seals between pipes have broken, allowing water to escape into the area surrounding the pipe.

• Root infiltration – tree or shrub roots have invaded the sewer line, preventing normal cleaning and/or have damaged the line.

• Off-grade pipe – existing pipes are constructed of substandard material that may have deteriorated or corroded. Video images are transmitted to the camera operator and can be saved onto a videotape, CD or DVD for a permanent record. Radio transmitters on the camera record the depth and physical location from the surface so that defects and obstructions can be corrected cost effectively.

Benefits of a Video Camera Inspection • The video cameras can inspect a variety of pipe diameters and locations. • Potential problems can be identified and corrected without guessing and without excessive digging.

• Video camera inspections can be scheduled at your convenience or when the lines are not in use.

• A video camera inspection provides a permanent record of line conditions—before and after service.

• The video cameras have radio transmitters to pinpoint the exact location of problems within your lines.

• A video camera inspection allows your service technician to determine the best course of action for correcting any problems. Video camera inspections should be part of your overall maintenance program. They are an accurate way to see what problems are in your drain and sewer lines. The video camera can also be used to inspect lines following cleaning or high-pressure water jetting to ensure that the lines are free flowing and that obstructions have been removed. CAM Larry Rothman is Director of Engineering Services at Roto-Rooter Services Company. For more information, contact Stanley J. Collini, the owner and operator of Roto Rooter Plumbing and Drain Service in Toronto. To contact Stanley, visit www.rotorooter.com or call him at 416-503-4444.

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38 Canadian Apartment Magazine

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