A REALITY CHECK ON RENTAL HOUSING POLICY IN ONTARIO LONDON - - PowerPoint PPT Presentation

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a reality check on rental housing policy in ontario
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A REALITY CHECK ON RENTAL HOUSING POLICY IN ONTARIO LONDON - - PowerPoint PPT Presentation

Oct 24, 2023 106 likes •355 views

A REALITY CHECK ON RENTAL HOUSING POLICY IN ONTARIO LONDON PROPERTY MANAGEMENT ASSOCIATION JANUARY 13, 2015 ONTARIOS PRIVATE SECTOR HOUSING INDUSTRY Provides homes to over 1.2 million households in Ontario

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A REALITY CHECK ON RENTAL HOUSING POLICY IN ONTARIO

LONDON PROPERTY MANAGEMENT ASSOCIATION JANUARY 13, 2015

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FRPO—Federation of Rental-housing Providers of Ontario 2

ONTARIO’S PRIVATE SECTOR HOUSING INDUSTRY

  • Provides homes to over

1.2 million households

in Ontario

  • $18.3 billion

in GDP annually

  • Over 147,000 jobs
  • $7 billion in tax

revenue to governments

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FRPO—Federation of Rental-housing Providers of Ontario 3

Rental Housing Infrastructure Investment

$4.5 billion in capital

expenditures on new apartment construction and renovations to existing housing Over 42,000 full-time jobs created in new construction and repair

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FRPO—Federation of Rental-housing Providers of Ontario 4

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An opportunity for the rental-housing industry to be proactive in helping to steer the development of new policy directions

THE WYNNE GOVERNMENT

§ Majority government § Beginning of less centralized approach to governing § Recognition of evidence-based decision making § Focus is on affordable housing

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FRPO—Federation of Rental-housing Providers of Ontario 5

DEMOGRAPHICS OF RENTERS IS SHIFTING

§ Millennials (ages 15-35) are a key part of the population seeking rental accommodation § Seniors are looking for specific amenities when they downsize from larger homes

0% 20% 40% 60% 80% 100% 15-24 25-34 35-44 45-54 55-64 65-74 75+ Percent Renting Age Group

AGE PROFILE OF ONTARIO RENTERS

55% of Ontario’s

rental housing stock, was built prior to 1970

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KEY ISSUES IN THE ONTARIO RENTAL HOUSING INDUSTRY

§ Rent Control

§ Rent Dispute Process § Property Tax & Assessment § Municipal Licensing

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RENT CONTROL

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FRPO—Federation of Rental-housing Providers of Ontario 8

RENT CONTROL

An idea that plays well with tenants and voters

But it is a policy that brings dire economic consequences

POLICY CHANGE IMPACTS ON SUPPLY POLICY ISSUES

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FRPO—Federation of Rental-housing Providers of Ontario 9

RENT CONTROL

POLICY ISSUES

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%

12-month CPI Change

INFLATION IS PUTTING PRESSURE ON 2.5% RENT CAP

KEY FACTORS

2014 rent increase guideline 0.8% 2015 rent increase guideline 1.6%

Operating and capital costs have edged above annual rent increase guidelines

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FRPO—Federation of Rental-housing Providers of Ontario 10

RENT CONTROL

POLICY ISSUES

The current new development policy set

  • ut in the Residential

Tenancies Act is the primary reason why new rental housing is being built

“The post-1991 rent exemption was

  • riginally introduced—and has been

maintained over time—as an incentive for private landlords to build new rental accommodation. This incentive not only helps to renew the rental housing stock, but also creates jobs in the construction sector. As such, any changes to this incentive could have an adverse effect on the rental housing sector, the economy, and job creation.”

  • Hon. Linda Jeffrey

Minister of Municipal Affairs and Housing April 2013

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RENT DISPUTE PROCESS

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FRPO—Federation of Rental-housing Providers of Ontario 12

RENT DISPUTE PROCESS

POLICY ISSUES

Comparison of Average Days to Resolve Landlord- Tenant Disputes

  • British Columbia

35 Alberta 17 Saskatchewan 25 Manitoba 32

Ontario 90

  • CASE STUDY

SAIDA SABRIE v. STARLIGHT APARTMENTS

Failure to pay rent. Amount of rent

  • wed to landlord

$2,127 First hearing scheduled April 8,2013 ADJOURNED Rescheduled hearing set for June 7, 2013 ADJOURNED Rescheduled again and heard on August 14, 2013. No further adjournments granted ORDER ISSUED Tribunal issued order to pay arrears

  • r move out

AUGUST 26, 2013 Tenant ignored order, appealed to Divisional Court (Judicial Review) LTB ORDER STAYED Divisional Court hearing scheduled and heard JUNE 10, 2014 Court found no error of law, applicant’s case had no merit LTB ORDER CONFIRMED Total landlord costs incurred: $25,000. Total amount awarded $2,500

129 days 292 days

421 days

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FRPO—Federation of Rental-housing Providers of Ontario 13

Eliminate the automatic stay of a Tribunal

  • rder in the event of a tenant appeal being

filed

  • Reduce statutory delays, such as reducing

the N4 notice period from the current 14 days down to 5

  • Introduce a Dispute Form and end

default hearings

  • Allow private bailiffs to enforce

Orders as an alternative to the Sheriff’s Office

FRPO is presenting several options to government to bring about an appropriate balance to the current dispute process

POLICY ISSUES

RENT DISPUTE PROCESS

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PROPERTY TAX & ASSESSMENT

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FRPO—Federation of Rental-housing Providers of Ontario 15

POLICY ISSUES

PROPERTY TAX & ASSESSMENT How apartments are assessed

Ontario is the only jurisdiction that uses the outdated Gross Income Multiplier (GIM) methodology

How apartments are taxed

On average, municipalities tax apartments at TWICE the rate of houses and condominiums

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FRPO—Federation of Rental-housing Providers of Ontario 16

POLICY ISSUES

PROPERTY TAX & ASSESSMENT

RESOLVING THE

ASSESSMENT ISSUE

  • FRPO has formed a

partnership with the Municipal Property Assessment Corporation (MPAC) to examine the move to a more transparent assessment methodology

§ New Tenant Information Package (TIP) forms released September 29th § Rental data now collected at the suite level only (suite time, market rent)—individual tenant data no longer required § One-time collection of what utilities and amenities are included in rent—going forward you notify MPAC of changes only § New form captures number of vacant units on June 1—you no longer have to indicate individual unit vacancy

FRPO recently negotiated a streamlined data collection process for multi-residential properties

Previous forms collected 10.7 million data

  • points. This new process will drop this number to

733,000, a volume reducMon of 93%

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FRPO—Federation of Rental-housing Providers of Ontario 17

POLICY ISSUES

PROPERTY TAX & ASSESSMENT

Municipalities set the tax ratios between different property classes Multi-residential properties are taxed on average at TWICE the rate of houses and condominiums

FRPO’s Fair Tax Fair Rent Campaign

A HOME IS A HOME www.fairtaxfairrent.ca

1.00 1.00 1.00 2.05 3.15 2.74 2.57 1.98

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 Ratio of Multi-Residential to Residential Property Tax Rates

Source: FRPO Survey of MunicipaliMes

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FRPO—Federation of Rental-housing Providers of Ontario 18

Estimated annual tenant savings on avg 2 bedroom apartment if taxed fairly at the same rate as houses & condos

$792/yr

CURRENT TAX RATES WITH FAIR TAX RATES

Average monthly rent $ 943 $ 877 Property tax portion $ 149 $ 83

2.05 1.00 Property Class Tax Ra0o

$66/mth

LONDON 2 BDRM APARTMENT

OVERPAYMENT

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MUNICIPAL LICENSING

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FRPO—Federation of Rental-housing Providers of Ontario 20

POLICY ISSUES

MUNICIPAL LICENSING

Permissive authority

granted to municipalities in 2007 by repealing Section 2 of Ontario Regulation 243/02

This new fee, from $50 - $400 is passed along to the tenant through their rent Municipalities already have the necessary tools to effectively manage how rental housing is developed and operated

EXAMPLES OF MUNICIPAL LICENSING FEES

FRPO—Federation of Rental-housing Providers of Ontario 20

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FRPO—Federation of Rental-housing Providers of Ontario 21

POLICY ISSUES

MUNICIPAL LICENSING

In 2013, FRPO commissioned a research study to examine the evidence on apartment licensing schemes in multiple jurisdictions

CONCLUSION “Apartment licensing is not an efficient source of new ‘net’ municipal revenues. It creates unintended nega0ve effects on the local economy…” “…More importantly, apartment licensing does not necessarily offer added protec0on to tenants and prospec0ve tenants. In fact, it tends to add to the eligible costs that can be charged by landlords and to reduce the op0ons for tenants in the rental housing market.” FRPO’S SOLUTION Restore the regulatory provision that existed prior to 2007 to exempt apartments from municipal licensing

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FRPO—Federation of Rental-housing Providers of Ontario 22

FRPO’s key messages to government

  • 1. The solution for affordable housing involves

all the players doing only what they do best

  • 2. Let evidence guide the development of public

policy

  • 3. A fair and level playing field for the industry

generates the best outcomes

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Scott Andison

  • President & CEO

Federation of Rental-housing Providers of Ontario tel: 416-385-1100 email: sandison@frpo.org