Hamilton-area landlords are speaking out after city councillors voted to move forward on a rental housing licensing pilot affecting Wards 1 and 8 near McMaster University and Mohawk College. If approved, rental properties with six or fewer units will be required to obtain an annual rental housing license for $200, money which will go towards funding future building inspections.
ACORN, a group that advocates for low-income renters, sees the pilot as a step in the right direction for disgruntled tenants facing squalidly living conditions and limited means for fighting back. “There’s a lot of bad landlords out there—why not have regulation like any other business?” said Mike Wood, Chair of the Hamilton ACORN Chapter.
Meanwhile, landlords opposed to rental housing licensing argue that the city already has enough laws in place to protect tenants, and that more regulation will lead to the precise outcomes the municipality is striving to mitigate: rent increases and record-low vacancy rates.
“Extra restrictions won’t help stimulate new rental development, and let’s face it, the costs will trickle down to the students eventually,” said William Blake on behalf of the Ontario Landlords Association. “It’s not that we are opposed to quality control or providing high quality accommodations for our tenants—bad landlords exist and they should be shut down. The problem is, rental housing licensing puts the cost and onus on landlords instead of the city’s by-law departments. The real solution is to educate tenants about who to call when they are faced with a bad landlord and how to request an inspection. By-law officers should be facilitating these inspections and it shouldn’t be done at a cost to us.”
Logistics aside, Blake, who owns a mid-sized portfolio of student housing rental properties across Canada, fears that the license requirement could send a bad message to future developers while adversely influencing the area’s market dynamics.
“It’s not just the $200 fee, but the impact that fee could have on rent prices overall,” he explained. “If one landlord chooses to increase rents in an effort to cover the charges associated with licensing, rent prices will be affected in the surrounding buildings, as well.”
Furthermore, Blake asserts that additional red tape is not what housing developers need; rather solutions that stimulate the market and entice future investment.
“Imposing layers of regulation will deter good people from investing in one area in favour of another where that bureaucracy doesn’t exist. Extra restrictions won’t encourage development,” he said.
Renters on the rise: CMHC key findings
In 2018, the CMHC Rental Report for the city of Hamilton revealed that the average cost of rent was $1,077 in the month of October. The overall vacancy rate was 3.1 per cent during the same period, which is below the 10-year average for the area.
Vacancy rates in Hamilton’s West End and Downtown Core zones where the largest concentration of McMaster University student renters live, were below average at 2.5 per cent and 2.9 per cent respectively.
The number of student renters in Hamilton likely increased this year, as data from IRCC show that the average number of non-permanent residents in Hamilton with study permits was up significantly. It is also likely that more international students led to higher overall enrollment for the fall 2018 semester, however McMaster University has yet to release that data.
What is certain is that greater student rental demand contributed to more occupied units in the downtown core and kept the number of occupied units in the West End steady.
Next year, as the need for affordable rental housing continues to grow and the glut potentially widens, more meetings and consultations will be scheduled to discuss Hamilton’s rental housing licensing pilot; however, it is possible that the new by-law could be in effect as early as 2019—whether landlords and housing developers like it or not.
Other municipal licensing programs at-a-glance:
The City of Waterloo Rental License requires owners of low-rise residential properties to undergo annual inspections in order to certify that their buildings adhere to the specified standards. According to the by-law information sheet, rental housing licenses help ensure that property owners/managers have a clean criminal record; that the building has upheld the required electrical, heating and ventilation standards for tenant health and safety; and that the rights of the tenants will be upheld throughout their tenancy. Landlords suspected of illegally renting a unit could be fined between $350 to $100,000. The cost of a license varies between $450 and $760 depending on unit-size and the duration required.
The City of London has a residential rental licensing by-law currently in effect requiring any rental property of four units or less to be licensed. To obtain a license, property owners must fill out a self-certification checklist, pay a $165 rental license fee and $171 fire inspection fee. A renewal fee of $55 is also charged and licenses are issued upon inspection from the Fire Department.
Residential rental properties located in the vicinity of Durham College and the University of Ontario Institute of Technology must be licensed under Oshawa’s Residential Rental Housing Licensing By-law. Licensed rental properties must comply with various standards, including: the Fire Code, Electrical Code, Building Code and the City’s Zoning and Property Standards By-law. Prospective landlords must pay an application fee of $75, a first-time licensing fee of $500, an annual renewal fee of $360, and ongoing inspections fees of $75, if and when required.