THE VALUE PROPOSITION OF A STRONG INDUSTRY ASSOCIATION SCOTT ANDISON

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Roxanne Gardner
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1 THE VALUE PROPOSITION OF A STRONG INDUSTRY ASSOCIATION SCOTT ANDISON JANUARY 15, 2016

2 THE LINE UP THE FRPO BRAND INDUSTRY PROFILE THE NEED FOR INDUSTRY ADVOCACY SELECT POLICY PRIORITIES QUESTIONS 2

Professional industry association Cer-fica-on &

represents over 350,000 suites Provincial-level

3 Professional industry association Cer-fica-on & Creden-aling Government Rela-ons & Policy Training & Educa-on Been around for over 25 years Events Member Services & Programs Membership represents over 350,000 suites Provincial-level focus FRPO Federation of Rental-housing Providers of Ontario 3

4 Setting industry quality standards A strong industry association provides the ability to better manage and influence the future Education & Training Programs Supporting quality service delivery and standards Engaging government with evidence-based policy advice and action FRPO Federation of Rental-housing Providers of Ontario 4

Waterloo Kingston Hamilton Eastern Ontario Northern Ontario

5 Supporting Municipal Engagement Through Regional Associations Chatham-Kent Greater Toronto Area Peterborough London Quinte Waterloo Kingston Hamilton Eastern Ontario Northern Ontario Ottawa FRPO Federation of Rental-housing Providers of Ontario 5

6 A Federation of Resources Across Canada FRPO Federation of Rental-housing Providers of Ontario 6

7 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 FRPO Federation of Rental-housing Providers of Ontario 7

8 Private Sector 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 Invest more in rental housing than the annual capital expenditure by the Ontario government in both GO Transit and provincial highways combined Source: KPMG Rental Housing Industry Economic Impact Study, December 2013 FRPO Federation of Rental-housing Providers of Ontario 8

For decades, the Government of Ontario has intervened in the market in an effort to resolve issues of housing affordability Direct investment in hundreds of thousands of social housing units Income

9 For decades, the Government of Ontario has intervened in the market in an effort to resolve issues of housing affordability Direct investment in hundreds of thousands of social housing units Income supplements Rent control Prohibition on demolition and conversion of rental housing Municipal authority affecting local development application approvals & fees FRPO Federation of Rental-housing Providers of Ontario 9

Ontario s Rental Housing Supply Crisis THE INTENT Competitive market for high quality rental housing A

housing GOVERNMENT ACTION OVER TIME INTRODUCED RENT CONTROL REGIMES DIRECT INVESTMENT & MANAGEMENT OF

housing stock supplemented by an unstable investor condo rental market Investors skeptical of long term

10 Ontario s Rental Housing Supply Crisis THE INTENT Competitive market for high quality rental housing A market that responds quickly to changes in demand A partner in the sufficient supply of affordable housing GOVERNMENT ACTION OVER TIME INTRODUCED RENT CONTROL REGIMES DIRECT INVESTMENT & MANAGEMENT OF BRICKS AND MORTER CREATED A PATCHWORK OF INDUSTRY POLICIES AND RULES OVER TIME THE RESULT Aging rental housing stock supplemented by an unstable investor condo rental market Investors skeptical of long term gov t policy regimes Shortage of housing that people can afford FRPO Federation of Rental-housing Providers of Ontario 10

social housing units in Ontario with a capital shortfall of

11 Poverty Reduction Strategy WHAT THE EVIDENCE SAYS 168,711 households on waiting list for an affordable home 270,000 social housing units in Ontario with a capital shortfall of $1.2 billion FRPO Federation of Rental-housing Providers of Ontario 11

12 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 AGE PROFILE OF ONTARIO RENTERS Age Group % 20% 40% 60% 80% 100% Percent Renting FRPO Federation of Rental-housing Providers of Ontario 12

13 FRPO S MOST COMPREHENSIVE POLICY INITIATIVE JUNE 2015 REMOVING BARRIERS TO NEW RENTAL HOUSING IN ONTARIO Housing That People Can Afford Tabled June, 2015 FRPO Federation of Rental-housing Providers of Ontario 13

14 SELECT FRPO POLICY PRIORITIES Rent Control Rent Dispute Process Property Tax & Assessment 14

15 RENT CONTROL 15

16 POLICY ISSUES RENT CONTROL An idea that plays well with tenants and voters POLICY CHANGE IMPACTS ON SUPPLY But it is a policy that brings dire economic consequences FRPO Federation of Rental-housing Providers of Ontario 16

POLICY ISSUES RENT CONTROL GUIDELINE HISTORY 2015 1.6% 2014 0.8% HARD CAP 2014 Guideline Increase 0.8% INFLATION IS PUTTING PRESSURE ON 2.5% RENT CAP 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.

17 POLICY ISSUES RENT CONTROL GUIDELINE HISTORY % % HARD CAP 2014 Guideline Increase 0.8% INFLATION IS PUTTING PRESSURE ON 2.5% RENT CAP 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 AVERAGE CPI RATE 2.4% % % % % % % % % % % % % % % FRPO Federation of Rental-housing Providers of Ontario 17

POLICY ISSUES RENT CONTROL GUIDELINE HISTORY 2015 1.6% 2014 0.8% HARD CAP 2015 Guideline Increase 1.

0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 AVERAGE CPI RATE 1.2% 2013 2.5% 2012 3.1% 2011 0.7% 2010 2.

18 POLICY ISSUES RENT CONTROL GUIDELINE HISTORY % % HARD CAP 2015 Guideline Increase 1.6% AVERAGE ANNUAL CPI BELOW GUIDELINE INCREASE 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2015 AVERAGE CPI RATE 1.2% % % % % % % % % % % % % % % FRPO Federation of Rental-housing Providers of Ontario 18

19 POLICY ISSUES RENT CONTROL The current new development policy set out in the Residential Tenancies Act is the primary reason why new rental housing is being built POST 1991 EXEMPTION VACANCY DECONTROL FRPO Federation of Rental-housing Providers of Ontario 19

20 RENT DISPUTE PROCESS 20

POLICY ISSUES RENT DISPUTE PROCESS Comparison of Average Days to Resolve Landlord- Tenant Disputes British Columbia 35 Alberta 17 Saskatchewan 25 Manitoba 32 Ontario 90 FRPO is pursing two

21 POLICY ISSUES RENT DISPUTE PROCESS Comparison of Average Days to Resolve Landlord- Tenant Disputes British Columbia 35 Alberta 17 Saskatchewan 25 Manitoba 32 Ontario 90 FRPO is pursing two significant solutions with government to bring about an appropriate balance to the current dispute process Eliminate the automatic stay of a Tribunal order in the event of a tenant filing an appeal Allow private bailiffs to enforce Orders as an alternative to the Sheriff s Office FRPO Federation of Rental-housing Providers of Ontario 21

22 PROPERTY TAX & ASSESSMENT 22

POLICY ISSUES PROPERTY TAX & ASSESSMENT How apartments are assessed

with real market value; and Policy inhibiting new rental being

multi-residential buildings are generally much higher than the

23 POLICY ISSUES PROPERTY TAX & ASSESSMENT How apartments are assessed Values are generally inconsistent between buildings or not aligned with real market value; and Policy inhibiting new rental being built How apartments are taxed Property tax rates on multi-residential buildings are generally much higher than the residential rate (houses & condos) FRPO Federation of Rental-housing Providers of Ontario 23

Valua-on methodology RESOLVING THE ASSESSMENT ISSUE FRPO developed the evidence to support the need for a change in house apartment buildings are assessed and how property taxes are levied

for owners/managers in Fall 2014 A significantly better assessment methodology to be implemented for the the 2017 taxation year Pre-roll negotiations program to launch before the 2017 assessment

24 Valua-on methodology RESOLVING THE ASSESSMENT ISSUE FRPO developed the evidence to support the need for a change in house apartment buildings are assessed and how property taxes are levied TRADITIONAL APPEAL RATE (including RfRs) > 50% FRPO Has Successfully Championed An Overhaul of How Multi- Residential Properties Are Assessed Achieved a 93% reduction in administrative filing burden for owners/managers in Fall 2014 A significantly better assessment methodology to be implemented for the the 2017 taxation year Pre-roll negotiations program to launch before the 2017 assessment rolls returned (Fall 2016) Ontario s 15,000 multi-residential buildings will now be valued on a capitalized income method starting in the next reassessment cycle FRPO Federation of Rental-housing Providers of Ontario 24

25 Municipal tax policy Property taxes are buried in the monthly rent paid by tenants This inequity has existed for decades 1998 reform relied on municipal action to bring about equity it is now 17 years later Severely unfair municipal taxation practices on apartment buildings 10 The number of Ontario municipalities who tax apartment buildings the same as houses and condominiums Apartment buildings are taxed on average at TWICE the rate of houses and condominiums Average over-taxation on typical 2 bedroom apartment is $85 / mth or $1,020 per year FRPO Federation of Rental-housing Providers of Ontario 25

26 SUMMARY OF OUR CURRENT ADVOCACY FOCUS RENT CONTROL Maintain Post-91 Exemption Remove the 2.5% hard cap RENT DISPUTE PROCESS Reduce delays in resolving cases Allow use of private bailiffs PROPERTY TAX Reduce number of appeals Tax fairness for tenants MUNICIPAL LICENSING Enact the previous regulation to exclude apartment buildings SUITE METERING Extend to electrically heated units FRPO Federation of Rental-housing Providers of Ontario 26

27 Advocacy information Member bulletins Reports Industry news Training & events Membership programs FRPO Federation of Rental-housing Providers of Ontario 27

28 Scott Andison President & CEO Federation of Rental-housing Providers of Ontario tel:

INCREASING HOUSING SUPPLY IN ONTARIO

INCREASING HOUSING SUPPLY IN ONTARIO Consultation Document Find out more at: www. Consultation Document About this consultation A strong demand for housing and limited supply in Ontario has resulted in