InterRent REIT

Hamilton’s rental licensing proposal shelved

Planning committee opts to boost property standards enforcement to industry's relief
Monday, September 23, 2013
By Daniel Viola

Hamilton’s controversial plan to license rental housing will not be moving forward, much to the relief of many in the city’s real estate industry.

On Sept. 17, the City’s planning committee tabled the proposed licensing plan and, instead, opted to strengthen its existing property standards enforcement. The CBC reported councillors backed a plan to assign four permanent staff to the property standards enforcement program, at a total cost of $455,000.

Many in the real estate industry applauded the move.

“(It is) a bit of a pleasant surprise,” says Arun Pathak, president of the Hamilton and District Apartment Association (HDAA). “They’ve basically gone with the recommendations I was giving.”

Pathak and the HDAA worked with the City and offered their input throughout the long process of drafting the proposed licensing system.

If passed, landlords with properties containing six units or less would have had to pay $100 per apartment, with enforcement beginning in 2017.

Hamilton landlords, property managers and real estate professionals had repeatedly expressed concern regarding the affects a licensing system would have on unit prices and rental stock.

“It was partially the affect it would have on landlords but it was also the affect it would have on tenants,” says Pathak, who explains that landlords would have simply passed along the licensing costs to renters, which would have driven up prices across the city.

According to some predictions, the strict enforcement of the licensing proposal may have resulted in the loss of 30 per cent of Hamilton’s converted home apartments, due to the City potentially deeming them illegal under the plan. This may have left many tenants without a home, further increasing demand for apartment units.

“That would have created shortages and a rise in rent,” says Pathak.

He adds that these effects would have compounded. This “collateral damage” would have even affected landlords and property managers with properties larger than the six-unit licensing cut-off.

According to Pathak, what the plan sought to achieve – to protect tenants from negligent landlords – is a valid concern.

“There are definitely going to be some units in the city that don’t comply with the current requirements,” he says.

However, he argues licensing simply is the wrong tool to solve this problem. Pathak says the necessary bylaws and regulations are already in place; all the City has to do is adequately follow through with its existing rules.

“When you have a bylaw that currently addresses these issues, you just have to go and enforce the bylaw,” he says. “(The licensing plan) wasn’t a new standard.”

The Ontario Landlords Association (OLA) also praised the planning committee’s actions.

“We are happy Hamilton has decided to focus on other options other than landlord licensing,” the OLA said in a statement to Canadian Property Management. “We fully support strengthened enforcement of current bylaws to make sure tenants are safe and landlord/investors who don’t maintain their properties are held accountable.”

Not everyone was celebrating the shelving of the licensing plan, though. According to the Hamilton Spectator, Coun. Terry Whitehead said he is not willing to abandon the licensing bylaw completely; however, he is willing to work with landlords on alternate solutions they propose.

The planning committee’s decision now has to make it through Hamilton city council on Sept. 25.

Pathak is optimistic council will go along with the committee’s plan. However, if the beefed up enforcement of current bylaws does not protect tenants to councillors’ satisfaction, the City could always return to a licensing plan at a future date, he says.

Daniel Viola is the online editor of Canadian Property Management and Building Strategies & Sustainability magazines. He is also the editor of Property Management Report. 

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