Stephen Rees's blog

Thoughts about the relationships between transport and the urban area it serves

Economy has builders eyeing a return to rental apartments

with 4 comments

Frances Bula in the Globe and Mail reports that developers in BC are thinking about building new rental apartments instead of condos. Given a vacancy rate of 0.5% and steadily rising rents, that may not be a bad idea. This type of development practically ceased in Canada in the 1970s when federal tax incentives for apartment buildings were ended.

A couple of things occurred to me. The first is that even in the boom times, many condos were not being bought by occupiers – many were speculative “flippers” – and others were bought for the purpose of  letting. In fact some strata councils introduced rules forbidding rentals (like mine) as way of “keeping out the riff raff”. There is a lot of the rental market which is distinctly grey – suites that do meet the building code and may well not be reported for tax purposes. Many municipalities have decided to abandon the idea of enforcement against illegal suites, recognising that they serve an essential social function, but still worry about the health and safety aspects of spaces being used for human occupation that fail to meet even the most basic standards.

Secondly the operation of rental units actually requires a lot of professional skill and attention – but usually does not get it. Big developers like Cressey still have significant rental holdings. But the way the legislation has been changed by the present government has removed much of the protection tenants once had. And this has done very little so far to bring new units onto the market. The most recent major news in this sector has been the forced eviction of tenants by owners claiming the need for vacant possession to renovate, but actually being cover for stiff rent increases. The law currently allows landlords to raise rents every year up to a specific limit. There is, of course, no provision for tenants to keep rents down or get them reduced.

Under the old law as a tenant of a Cressey property I became an unwilling expert in the workings of the provincial agency that was supposed to regulate tenancies. I spent quite a bit of time and effort in quasi-litigation just to get the place where I lived looked after properly. The work that had been done just before we moved in was simply cosmetic and was designed to c0ver up problems that has been left unrepaired for years. The worst was the simple failure to ensure that tiles in the bathroom were properly grouted. After long rounds of visits to the Landlord and Tenant offices – and paying rent into escrow – the landlord finally brought in contractors who had to replace the bathroom floor and the kitchen ceiling – but not before trying to blame me for leaks which had been going on for years before I arrived. It was an abrasive and unpleasant experience. But all I wanted them to do was look after their property properly. Cressey, of course, was much more interested in its new developments for sale. It is a lot easier to blame the tenants for everything – and harass them – than actually try to ensure that you have adequately maintained units.

There is a great deal of prejudice against tenants. One of the people I used to commute with in Victoria was appalled that, as a tenant, I had the right to vote in municipal elections. Very few landlords are as good as the last one I had, who went out of his way to ensure I was comfortable. He is one of the very few I have known who recognised that his interests and mine interlocked. I am fairly certain that this Vancouver Craig’s List ad is a spoof but who knows.

It is probably too much to expect that many municipalities will get into this business. Though the developers are suggesting they need incentives “temporarily forgoing property taxes or development charges” – and even expecting the province to get involved.  The market may well actually work for a while without these kinds of support. But what is equally clear is that the market has grotesquely failed – and that is evident by the homelessness problem. And the market is generally not at all interested in getting into “social housing”. Although, of course, there have been and are those only too willing to try and exploit the homeless too. And it seems the current political atmosphere here is still stuck in 19th century attitudes to the poor that prevent us from doing what we could do to help in terms of a wider variety of tenures and support mechanisms.

What is really sad is so many of the people who could be moving us to become a more inclusive and caring society will  be in churches this week, singing carols and talking about a homeless family forced to occupy a stable and give birth to a child among the animals. Their political philosophy seems to get hung up on the idea that only private acts of charity have any moral value. Yes it is very good to work in a food bank or give out blankets and warm jackets at this time of year. But we do that every year and it never changes – the need is, if anything, growing. Our politicians need to get their heads around the idea that a decent home and an adequate social safety net are indeed Canadian values that we cherish and expect our governments – at all levels – to rebuild. And soon.

I think that is probably a good point to stop blogging and go enjoy the holiday myself. I trust that all of you who read this blog will have a safe and happy holiday – and not have to spend too much time stuck at airports.

Written by Stephen Rees

December 24, 2008 at 9:21 am

Posted in housing

4 Responses

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  1. Stephen, I don’t know how it worked for renters in the UK but on the other side of the channel tenants had, and still have, both lots of rights AND lots of duties. Basically tenants have security of tenancy and, after they have lived in a place for so many years, if the landlord needs it for whatever serious reasons he/ she MUST find suitable accommodations for a similar rent or pay the difference between former rent and new one for X number of months. The landlord is responsible for maintening the whole building and for renovating electrical, plumbing, heating systems etc. The tenant is responsible for keeping the place clean, safe etc. and is also responsible for cosmetic stuff. Cosmetic stuff includes wall and floor coverings, light fixtures, drapes, kitchen cabinets and appliances etc. as in Continental Europe people wouldn’t dream of renting–much less buying– a place to end up with exactly the same everything as the neighbours. Tenants also pay of course for heating, hydro,water etc. (all apartments MUST have individual meters for all utilities). I have seen all that as the child of parents who rented a succession of subsidized apartments (including once a whole huge wing of a 17th century castle that was a bit run down and couldn’t be heated in winter) from the government (they were both civil servants in management positions that were regularly sent here and there) but also owned a home with tenants, then as both a tenant myself and an employee of a building company doing renovations for both landlords and tenants. Many small landlords didn’t charge a high rent as they didn’t wanted to pay too many taxes and bent backward to keep a good tenant as they–the landlords– were interested in keeping their real estate for generations—my landlady provided the kitchen furniture and some furniture etc as I was a single young person in his first job, fresh from the (compulsory and unpaid) 2 1/2 years army stint and even provided me with a weekly cleaning lady who did my laundry too. All that for 1/10th of my monthly gross wages.. Obviously there are landlords and tenants from hell over there too but good ones have a chance. Last week the Minister of Housing mentioned a new program that help families (with a low income and now living in subsidized housing) to buy a place for the same monthly expense; the government will help pay the difference in the mortgage. This help families become owners and open their former home to another family. I moved to Vancouver when the Rentalsman office still had powers. When I moved out of a place the landlord refused to give me back my deposit so we went to arbitration. He was a well know cheater so I won then dragged him to the Small Claims Court as he still refused to pay. I got all my expenses paid plus more than the original deposit. those were the good days!

    Red frog

    December 24, 2008 at 8:41 pm

  2. As a landlord myself, I actually feel that the playing field is fairly level for both tenants and landlords in terms of the regulatory environment. Yes there may be situations where tenants are treated unfairly by landlords, but I can tell you that I have spent countless hours cleaning, replacing, and repairing the premises I own because my tenants simply didn’t care about my property, and if that is not being treated unfairly I don’t know what is. After all an agreement had been made. This isn’t just incidental stuff either; I have been forced to make major financial outlays due to simple negligence on the part of my tenants, and had no recourse to recover my time and money because the rules made it too complicated or time-consuming to make an attempt at restitution.

    Maybe the situation is different for the “big boys,” but I can tell you that small time landlords with a mortgage and another career sure aren’t favoured by the Tenancy Act.

    I understand that the landlord-tenant relationship is highly interdependent on goodwill from both sides, but in my experience the sad truth is that many tenants are in fact “riff raff” who simply don’t give a sh*t about another’s property and investment, and finding a tenant who ALSO understands this interdependent relationship is very very difficult. I can tell you that my occasional search for suitable tenants is a tough haul, and more often than not my best bet ends up being a year long ordeal of trying to minimize damage to both my house and my standing in my neighbourhood due to my tenants treating my house and my neighbours with disrespect.

    Corey

    December 26, 2008 at 8:15 pm

  3. Red Frog wrote:

    “Many small landlords didn’t charge a high rent as they didn’t wanted to pay too many taxes and bent backward to keep a good tenant as they–the landlords– were interested in keeping their real estate for generations”

    This is how I think of my property. The added benefit of low rent and treating tenants well is that tenants stay longer and I am saved the annual chore of advertising and selecting new tenants who put on a good face but may turn out to be a nightmare!

    Corey

    December 26, 2008 at 8:27 pm

  4. “What is really sad is so many of the people who could be moving us to become a more inclusive and caring society will be in churches this week, singing carols and talking about a homeles family forced to occupy a stable and give birth to a child among the animals. Their political philosophy seems to get hung up on the idea that only private acts of charity have any moral value.”

    Sad but true. I agree with the theology, but not the practical application. There are others of us though working to see a change.

    Andy in Germany

    December 27, 2008 at 1:55 pm


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