Loading...
HomeMy WebLinkAboutCSD-13-060 - Residential Rental Licensing Program REPORT TO: Community and Infrastructure Services Committee DATE OF MEETING: June 17, 2013 SUBMITTED BY: Michael May, Deputy CAO, Community Services (519-741-2200, ext. 7079) PREPARED BY: Shayne Turner, Director of By-law Enforcement, (519-741- 2200, ext. 7753) WARD(S) INVOLVED: All DATE OF REPORT: June 12, 2013 REPORT NO.: CSD-13-060 SUBJECT: RESIDENTIAL RENTAL LICENSING AND OTHER OPTIONS RECOMMENDATION: That staff be directed to proceed with the following initiatives as alternatives to a residential licensing program: Investigate the feasibility and implications of developments with potential for increased density within Lower Doon to help alleviate the stress and demand placed upon areas of single detached residential type dwellings. Develop a formal relationship between City staff and the landlord association in the Lower Doon and Doon Pioneer Park area. Continue to strengthen the relationship between City staff and Waterloo Regional Police in order to coordinate prevention and enforcement initiatives in the subject area. Investigate ways to increase the effectiveness of enforcing existing zoning and lodging house regulations relating to identified properties of concern. That the following alternative initiatives to a residential licensing program be referred to the 2014 budget process for consideration as strategic additions to the operating budget: Increase specific and targeted enforcement initiatives, including potential zoning and lodging house enforcement, in the area of Lower Doon and Doon Pioneer Park. Investigate the potential impact of long term changes to existing planning policies and zoning regulations in the subject areas. Continue the Fire Department’s voluntary compliance program in the Lower Doon and Doon Pioneer Park areas and investigate ways to encourage or mandate increased compliance rates among the area’s rental properties. 5 - 1 BACKGROUND: Staff presented an initial backgrounder report, CSD-11-156, (copy attached) with regard to residential rental licensing by-laws (RRL) at the November 28, 2011, Community and Infrastructure Services Committee meeting. The matter was eventually deferred to the February 5, 2012, meeting of Council, where the following recommendation was adopted: “That staff be directed to provide further information on a residential rental licensing program, including an overview of potential guiding principles and the various elements of the review process for such a licensing program; as well as, other options and/or alternatives, including those within existing regulations and by-laws, should a licensing program not be approved; and further, That staff advise Council of the implications on staff resources, within the 2012 Business Planning cycle, resulting from a process to review a residential rental licensing program for the City of Kitchener.” This report responds to this direction and provides new input developed since the initial report was tabled with Council. The Divisions involved in the discussions to date that will continue to be involved as this matter goes forward includes: By-law Enforcement, Planning, Building, Fire, Legal and Licensing. In addition, it is anticipated that Communications and Finance staff will have a level of involvement moving forward. EXECUTIVE SUMMARY: The primary objectives as staff understand the issue are 1) ensuring adequate levels of safety within dwellings and 2) addressing behaviours that are often associated with a large number of rental dwellings in a specific area (e.g. parking, noise, maintenance standards, litter and waste management). It must also be noted that a significant number of the concerns directed to City staff, most notably the By-law Enforcement Division, can be summarized as behavioural in nature. These include concerns over parking (public and private property), noise, general maintenance of properties, litter and inadequate garbage collection practices. Current by-laws are in place to address such concerns and efforts have been made to concentrate enforcement at specific times in affected areas. It is generally unclear at this point as to what long term impact, if any, a residential rental licensing by-law would have on addressing these behavioural concerns. This is not to suggest that there will not be positive impacts, only that such licensing by-laws are relatively new and there are conflicting opinions as to their ultimate effectiveness in this regard. Staff’s recommendation is to pursue alternatives other than residential rental licensing that are aimed at achieving the overall objectives and addressing the concerns underlying this issue. It is staff’s position that providing increased resources to enforce existing regulations would have a swifter impact in addressing issues raised by Council and would be a more efficient use of resources. The issues that originally gave rise to this topic and resulted in Council’s direction to staff, are based on concerns that originated from a defined geographic area of the City. However, despite legislation that appears to permit licensing by-laws based on geographic boundaries within a municipality, staff is aware of significant challenges, raised by the Ontario Human Rights Commission, to such an approach. As such, the City is faced with the potential of taking 5 - 2 a broad brush approach in implementing a city-wide licensing program to address an issue that is most prevalent in one specific area of the City. A perception already exists that a RRL program is being contemplated to address concerns identified in a geographic area of Kitchener. This perception has perpetuated some thoughts that a by-law, with significant costs and fees associated with it, which impacts the entire City, is not necessary. It is anticipated that this perception and related concerns will form the basis of significant opposition to a licensing program. REPORT: The information contained in this report is organized into sections relating to specific areas of interest or concern relative to this topic. Challenges It is important to acknowledge up front that this issue has presented significant challenges in terms of working through the various options and trying to arrive at a single option that may address all the expectations involved. There are several challenges staff have faced as they have reviewed the concept of RRL programs. These challenges include: The fact that there appears to be a variety of objectives that cannot necessarily be achieved through a single approach. The primary objectives, based on concerns identified, are 1) ensuring adequate levels of safety within dwellings and 2) addressing behaviours that are often associated with a large number of rental dwellings in a specific area (e.g. parking, noise, maintenance standards, litter and waste management); The issues that originally gave rise to this topic and resulted in Council’s direction to staff, are based on concerns that originated from a defined geographic area of the City. However, despite legislation that appears to permit licensing by-laws based on geographic boundaries within a municipality, staff is aware of significant challenges, raised by the Ontario Human Rights Commission, to such an approach. As such, the City is faced with the potential of taking a broad brush approach in implementing a city-wide licensing program to address an issue that is most prevalent in one specific area of the City. There would be significant impacts on City resources (staff and funding), both during the research and development of an RRL program and the implementation phases. As well, there have been significant concerns raised by the public with respect to the fees put in place to cover the costs of administration and enforcement of an RRL program. The costs to the City to develop and implement an RRL program must be balanced against the projected benefits. Staff believe those municipal resources could be better applied to greater enforcement of existing regulations to achieve the same objectives. Beyond an RRL program, it should be noted that certain of the alternatives listed later in this report may have constraints that need to be investigated, such as the legal limitations associated with some existing regulations. 5 - 3 Staff cannot over-emphasize the fact that no one solution, including a full and comprehensive RRL program, will be able to completely address the concerns of Council. Existing Efforts and Initiatives The City has already undertaken a number of initiatives to address behaviour and safety concerns identified in the Lower Doon and Doon Pioneer Park areas of the City relating to the impact of rental properties in that area. These existing initiatives include: Increased presence of enforcement staff during specified times (e.g. at the beginning of the school year) with a focus on parking, noise and property standards concerns; Continued efforts by the Kitchener/Conestoga College Town and Gown Committee, with a focus on supporting the relationship between temporary and long term residents in the neighbourhoods in proximity to Conestoga College; The Fire Department has implemented a voluntary compliance program relating to rental dwellings, and: Staff have established a relationship with various owners of rental properties in the subject area. Lower Doon Zoning It has been suggested by some that changes could be made to zoning within the Lower Doon area in an attempt to deal with behaviours that are often associated with a large number of rental dwellings in a specific area (e.g. parking, noise, maintenance standards, litter, and waste management). It is Planning staff’s opinion that a Zoning By-law amendment that would have the effect of reducing the number of bedrooms within a residential dwelling or limiting the occupant loads by square footage, even on a city-wide basis, is not supported under current policies. It is important to note that the current zoning in the Doon area arose out of an Ontario Municipal Board hearing decision and that any amendment to the Zoning By-law can be appealed to the Ontario Municipal Board. Because property rights are impacted, attempts to downzone are usually only successful if implementing a provincial directive or if rooted in provincial, regional and/or municipal policy. The Planning Act specifically prohibits municipalities from adopting by-laws that distinguish between people who are related and those who are not. For example, we cannot have a zoning regulation that treats ten unrelated individuals who live together as one household differently than a traditional family of ten persons. In addition to inviting an appeal to the Ontario Municipal Board, a by-law that somehow tries to regulate users instead of uses (e.g. treating renters or unrelated individuals differently than families) also invites a complaint to the Human Rights Tribunal. Fire Services Comments and Voluntary Inspection Program In response to the growing number of rental units in the Lower Doon area that were specifically marketing individual bedrooms in a shared house to college students, the Fire Department has already implemented a voluntary inspection program. The voluntary fire safety improvement 5 - 4 program initiated by Fire in the fall of 2011 was not intended to be extended beyond its three year life span. It was designed as a temporary measure while the City explored options such as . the RRLThis voluntary program has realized limited success as approximately 50% of converted houses located in the Lower Doon area, identified at that time, were initially involved. The number of those that completed the voluntary upgrades to life safety systems is considerably less, somewhere in the 35% range. The majority of those property owners who opted to participate were for the most part already being cooperative with enforcement officials. For the properties that participated in the program, we have seen an increase in the level of fire safety for the residents in these homes. The program has also seen a success in that the number of available bedrooms has not increased in any of the participating properties, meaning that resident density has also not increased. Without a permanent reallocation of resources, the program is not sustainable over the long term. Staff has been redirected from other inspection priorities in order to deal with these issues in Lower Doon. Since the program commenced however, the number of houses in the area converted to rental accommodations for multiple individuals has grown. At present, Fire estimates approximately 80 single detached residential dwellings in the Lower Doon area are being used as rental dwellings, where bedrooms with shared accommodations are being rented to individuals. This represents a significant portion of the single detached residential dwellings in the area. We anticipate this trend to continue as the new campus of Conestoga College begins to take in students. We have seen this same trend occurring in Upper Doon and Pioneer Park. Without a tool like the RRL or something similar, the Fire Department has limited ability to affect life safety and behavioral issues in areas where converted rental housing units are concentrated as existing regulations are either difficult or very resource intensive to enforce. Fire believes that there needs to be reasonable controls put in place at the municipal level, in order to provide some regulatory teeth to address properties where resident densities are increased beyond a reasonable level in a building. It is acknowledged that Fire’s primary concern is safety and that it is Fire’s opinion that tools other than the RRL program will not enable them to address this concern. Residential Rental Licensing as an Option As directed by Council in February 2012, the following is an overview of the key points for consideration if the City were to undertake the required review and public consultation process to develop a full RRL program. As referenced in staff’s earlier report and contained in the subsequent motion from City Council, this information provides an overview of the guiding principles that could be associated with an RRL program. The principles identified by staff that could be the main focus of any review and consultation process include: Identifying the classes of buildings to which the by-law will apply. At this point, staff believes the primary focus should be on low-rise rental buildings that were not necessarily purpose built as rental accommodations. In other words, residential properties converted to rental accommodations; 5 - 5 Non-owner occupied rental buildings; The geographic area to which the by-law may apply, (city-wide versus area specific); Timing for implementation (ie. a phased approach?) Costs and staff resources for implementation and on-going administration and enforcement; Fees associated with licenses (with the concept that the fees need to ensure cost recovery); and Ensuring that all identified stakeholders have an opportunity to provide their comments during the review process. Other discussion points would no doubt arise from public consultations and would be addressed accordingly. As identified earlier in this report, a perception already exists that an RRL program is being contemplated to address concerns identified in a geographic area of Kitchener. This perception has perpetuated some thoughts that a by-law, with significant costs and fees associated with it, which impacts the entire City, is not necessary. It is anticipated that this perception and related concerns will form the basis of significant opposition to a licensing program. It must also be noted that a significant number of the concerns directed to City staff, most notably the By-law Enforcement Division, can be summarized as behavioural in nature. These include concerns over parking (public and private property), noise, general maintenance of properties, litter and inadequate garbage collection practices. Current by-laws are in place to address such concerns and efforts have been made to concentrate enforcement at specific times in affected areas. It is generally unclear at this point as to what long term impact, if any, a residential rental licensing by-law would have on addressing these behaviours. This is not to suggest that there will not be positive impacts, only that such licensing by-laws are relatively new and there are conflicting opinions as to their ultimate effectiveness in this regard. At this point, staff is not aware of a significant number of situations where a residential licensing by-law has been tested in court, for example, prosecuting for failing to obtain a license. As residential rental licensing by-laws are relatively new, there is little legal guidance in terms of caselaw on how these by-laws should be crafted. Based on staff’s discussions with municipalities such as the City of Waterloo (discussed below) it can be expected that starting a project to fully review and develop a RRL program would be very time consuming and have a significant impact on staff resources. Such a significant corporate-wide project would need to be referred to the 2014 departmental business planning process for prioritization against other initiatives. Based on information collected so far, it is anticipated that such a project would involve a period of at least 12 months to complete the process of research and community engagement adequately and ensure that Council is provided with the fullest of information to make an appropriately informed decision. In order to effectively manage what would be a significant and complex cross-corporate project, additional staff resources would be required on an interim basis to ensure all aspects of the project are managed appropriately and in a timely manner. Without dedicated resrouces to this project, the timeframe for completion could as much as double to 24 months. At this point, it is believed that such a project would require one new FTE to lead and manage the development process with significant support from all participating Divisions (By-law, Fire, Planning, Building, Legal, Communications, Licensing, and Finance). Further, none of the Divisions currently 5 - 6 participating in the discussions would be able to dedicate resources to this project without reprioritizing other work already identified on the corporate business plan or adjusting existing core service levels. It must be noted that the resource implications discussed above relate specifically to the review and development phase of a RRL program. The costs associated with the implementation and on-going administration of a such a program cannot be fully quantified at this point, although we know it would be significant, based on the experience of other municipalities. Specifically identifying the additional staff required to implement a RRL program would be be part of any review undertaken. It should be acknowledged that there is the potential for such a program to involve significant resource costs, which must be balanced with appropriate license fees. City of Waterloo’s Experience Staff has monitored the City of Waterloo’s experience with its RRL program as well as experiences in other municipalities. In researching other municipalities’ approaches, it was apparent that each municipality is addressing unique circumstances. Unlike some by-laws that are relatively uniform, it is staff’s opinion that merely duplicating another municipality’s by-law would be insufficient to address Kitchener’s unique concerns. Staff have had the benefit of regular dialogue with the City of Waterloo with respect to how their process played out. Their licensing by-law was passed in May of 2011 and came into force and effect in April of 2012. Waterloo staff advises that the research and development phase leading to the enactment of the by-law lasted approximately 2 years. Their work team consisted of representation from their By-law Enforcement, Fire, Building, Planning, Legal, Communications and Finance areas. They were not able to provide a definitive dollar value to quantify the impact on staff resources, however they did indicate that the impact was substantial. In order to implement the program, the City of Waterloo staff identified the need to increase staff resources by 6 FTE’s in the areas of property standards, Fire Prevention and license administration. Although it is premature to quantify what the costs of an RRL program for Kitchener would be, it is almost certain our resource requirements would be equal to or greater to those required in Waterloo. st After the 1 year of implementation, the City estimates that approximately 3,000 of the estimated 6,000 rental properties affected by the by-law have been licensed. In addition, reports indicate that the revenue generated from the program has exceeded projections and more than covered the costs of administration. While this has served to avoid any impact of the program on the City’s tax base, it has also attracted some negative public attention from those who perceive the program’s focus to be primarily a source of revenue generation for the municipality. In addition, we are aware of reviews currently underway in Guelph and Hamilton. It is our understanding that City of Guelph staff are preparing a report outlining the cost/benefit of an RRL program to be presented to their Council in July. Hamilton staff advise that their Council has provided a stakeholders group (real estate and landlord interests) with an opportunity to make submissions with respect to their ideas to move forward. It is anticipated that this submission will be presented to Hamilton Council by the end of June. 5 - 7 Ontario Human Rights Commission The Ontario Human Rights Commission (OHRC) is closely monitoring efforts being made by Ontario municipalities to move forward with RRL programs. They have expressed concerns with how they see such licensing programs as having the potential to unfairly discriminate against certain sectors of the population, also referred to Code-protected people. For example, this can include students or people who are on lower incomes and have limited choices as to affordable housing. Most recently, the OHRC has expressed concerns relating to both the City of North Bay’s and the City of Waterloo’s by-laws. Their concerns relate to certain provisions in both by-laws that they believe can adversely affect Code-protected people. In the North Bay situation, the OHRC has asked the City to remove the sections of the by-law they are concerned with. At this point, Kitchener staff is not aware of exactly what the City of North Bay’s response will be. With regard to Waterloo’s by-law, it is understood at this time that City of Waterloo staff do not concur with the OHRC’s position. However, it is not clear as to whether the issue will be eventually end up before the Human Rights tribunal or whether the concerns can be addressed and settled prior to such a hearing. Recommended Alternatives to a Licensing Program In response to Council’s previous direction, the following alternatives to an RRL program are recommended by staff. These alternatives include continuation and/or expansion of existing initiatives to better enforce existing regulations. Staff believe these alternatives are implementable in relatively short order when compared to a RRL program and deserve further investigation and analysis as to their potential effectiveness. Increase specific and targeted enforcement initiatives in the area of Lower Doon and Doon Pioneer Park. This includes consideration of dedicated resources to the affected area during the times of the year that are identified as requiring the most attention. Such resources will focus on issues related to parking, noise, public nuisance and minimum maintenance standards. Discussions will also involve the Region of Waterloo Waste Management Services. The costs associated with increased enforcement would be discussed as part of the 2014 Operating Budget process. Continue the Fire Department’s voluntary compliance program in the Lower Doon and Doon Pioneer Park areas and investigate ways to encourage or mandate increased compliance rates among the area’s rental properties. Dedicate resources from By-law Enforcement and Fire Prevention to investigate ways to increase the effectiveness of enforcing existing zoning and lodging house regulations relating to identified properties of concern. Investigate and report on the potential impact of long term changes to existing planning policies and zoning regulations in the subject areas. Any options to be investigated in this respect could not include people zoning. Investigate the feasibility and implications of developments with potential for increased density within Lower Doon to help alleviate the stress and demand placed upon areas of single detached residential type dwellings. Any such developments could be designed/developed to accommodate more units but would have to be compatible with the existing low rise residential neighbourhood. 5 - 8 Develop a formal relationship between City staff and the landlord association in the Lower Doon and Doon Pioneer Park area. Continue to strengthen the relationship between City staff and Waterloo Regional Police in order to coordinate prevention and enforcement initiatives in the subject area. It is important to note that several of these recommended alternatives would require additional resources that are not currently allocated and cannot be implemented with existing resources. As such, staff feel it is appropriate for those alternatives to be referred to the 2014 Operating Budget process for prioritization against other financial needs within the Corporation. Summary As outlined in this report, there are many factors to consider with respect to the logical next steps in this process. It is staff’s opinion that the proper approach is to pursue the various alternatives listed above, as opposed to implementing a project to develop a RRL program for Council’s consideration at this time. The factors considered in staff’s decision making process include: The concerns raised by the Ontario Human Rights Commission, which suggests it may be prudent to continue to monitor the challenges to licensing by-laws before committing resources; The fact that many of the concerns giving rise to this topic in the first place have originated from an identifiable geographic area of the City, leading to public perceptions that areas of the City which are not subject to the same concerns should not be impacted; Despite an obvious inclination to look at a licensing program that is geographic in nature, the OHRC concerns in this regard cannot be overlooked and present significant risks to the Corporation; Regulations currently exist to address many of the concerns identified, and staff believe it would be a more appropriate use of resources to focus on increased enforcement of existing regulations; The long term positive impact of residential rental licensing on many of the concerns that have been identified as being behavioural in nature is still unclear; Significant staff time and municipal resources would be required to undertake the review process and develop a by-law for consideration, with no clear indication of the final direction to implement. Other work priorities already identified would need to be reprioritized and delayed to complete this work; and A residential rental licensing program will continue to be an option. It is anticipated that current unknowns, such as potential challenges to some existing RRL by-laws and their overall effectiveness, will become more clear over time. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: This request supports the Community Priority of Quality of Life, as contained in the City’s Strategic Plan. 5 - 9 FINANCIAL IMPLICATIONS: A number of the alternative initiatives recommended by staff would require additional resources that are not currently allocated and cannot be implemented with existing resources. As such, staff feel that it is appropriate for those alternatives to be referred to the 2014 Operating Budget process for prioritization against other financial needs within the Corporation. At that time, full details regarding the financial implications of these initiatives will be explored and presented to Council for your consideration. It is anticipated that the implementation of a Corporate Project to review and develop a RRL program would require resources of one FTE to lead and manage the project. The estimated cost of this position including fringe is $110K annually and is currently unfunded. In addition, such a project would require support from several Divisions including Legal, Bylaw, Fire, Planning, Building, Licensing, Communications and Finance. The level of support that may be required from the respective Divisions is somewhat of an unknown at this time. However, if staff resources were to spend even three hours per week on this project (which is a conservative estimate) it would equate to approximately twelve thousand dollars a person or roughly $70,000 annually for the combined Divisions identified. Staff has already acknowledged that such support cannot be allocated without impacting existing projects and/or core services. It is also important to state again, these financial implications related to a RRL program do not speak to the costs to implement and maintain a licensing program over the long term. Such costs and associated licensing fees would be reviewed as part of the development phase. COMMUNITY ENGAGEMENT: Similar to what was referenced in the previous report, a full scale public consultation exercise has not yet been implemented. Such an exercise is subject to Council’s direction. Staff has had some communication with potential stakeholders, including the Kitchener/Conestoga College Town and Gown Committee, made up of members of the College students union and faculty, Waterloo Regional Police, the Lower Doon Neighbourhood Association and a Lower Doon landlord representative. There has also been some communication with the Kitchener-Waterloo Association of Realtors, the Waterloo Region Apartment Manager’s Association, and specific stakeholders, based on their inquiries to staff. In the event that Council directs staff to proceed with a review and development of a draft RRL by-law and program, such review would include a community engagement strategy to reach a variety of stakeholders. ACKNOWLEDGED BY: Michael May, Deputy CAO, Community Services Department Attachments: - CSD-11-156 - Fire Departments Safe Rental Housing Guide 5 - 10 REPORT TO:Community and Infrastructure Services Committee DATE OF MEETING: November 28, 2011 SUBMITTED BY: Jeff Willmer, Deputy CAO, Community Services Department, 519-741-2325 PREPARED BY: Shayne Turner, Director of By-law Enforcement, 519-741- 2753 WARD(S) INVOLVED: All DATE OF REPORT: November 21, 2011 REPORT NO.: CSD-11-156 SUBJECT: RESIDENTIAL RENTAL LICENSING BY-LAW RECOMMENDATION: That, in the event Council wishes further investigation of a residential rental licensing program, staff be directed to provide Council with an overview of potential guiding principles for such a licensing program as well as an overview of the various elements of the review process; and further, That staff advise Council of the implications on staff resources, within the 2012 Business Planning cycle, resulting from a process to review a residential rental licensing program for the City of Kitchener. BACKGROUND: At the June 13, 2011, meeting of Council, staff were directed to prepare a background report on the subject of requiring a licensing scheme for residential rental properties by discussing the experiences of other municipalities in Ontario and the implications for the City of Kitchener. This report is in response to Council’s direction. The report was originally requested for the Community and Infrastructure Services Committee meeting of September 26, 2011. However, it was deemed to be appropriate to delay presenting the report to Committee until a later date, for reasons that will be discussed in this report. 5 - 11 REPORT: Current Situation: The discussion relating to a potential review of a residential rental licensing by-law for the City of Kitchener originated out of concerns expressed about rental accommodations in the Lower Doon area, which are essentially marketed to students of Conestoga College. The concerns primarily center around single detached housing that is being rented to groups of individuals, in some cases 8 or more to a dwelling. Although the City does have regulations within the Zoning By-law relating to regulating households, it must be acknowledged that there are certain legislative constraints on these regulations. This includes a Planning Act provision that by-laws cannot distinguish between individuals or families living together. In other words, people living together do not have to be related by blood or marriage to be deemed to be a household. In addition, municipalities cannot regulate which dwellings can be rentals or not, nor can a municipality identify an area of land whereby rentals would be prohibited or permitted. There are certain zoning regulations that apply in the area of Lower Doon that are somewhat different than most areas of the City. These include a prohibition on duplexing unless such duplex was in place prior to 2001 and a restriction of lodging houses in the majority of zones. It must be acknowledged that there are certain challenges with the enforceability of the regulations that currently apply to rental units. Rights of entry differ from one piece of legislation to the next. At times, enforcement staff experiences challenges in gaining entry to a dwelling to perform an inspection. Additionally, due to the wording and judicial interpretations of certain legislation, it is sometimes difficult to gather sufficient evidence to prove in a court setting that a rental unit is being used as a lodging house or duplex rather than as a single household. It should also be pointed out that these difficulties are not unique to Kitchener, and are being experienced across municipalities in Ontario. In the spring of 2010, a fire occurred in a single detached dwelling in Lower Doon. Fortunately, there were no injuries, however this incident escalated the concerns around how houses are being used and how they have been renovated to accommodate rental uses. Subsequently, the City’s Fire Department initiated a fire safety compliance program in Lower Doon, aimed at the safety of houses being used as rental accommodations. Many landlords have chosen to participate in the program, upgrading their properties with respect to fire safety based on a guideline provided by the Fire Department. However, participation in the program is voluntary and the legal considerations and enforcement difficulties already discussed can make fire safety improvement of other rental properties challenging. Notwithstanding the comments above, it must be understood that such a potential rental licensing mechanism can have applicability across the City as it relates to ensuring safe and healthy rental accommodations, particularly with respect to situations where a building is being used as a rental when it was not originally built for such a purpose (ie. rental conversions in low- rise type buildings). 5 - 12 Legislation: In January 2007, several amendments to the Municipal Act came into effect. Of relevance to the subject of this report was the elimination of regulations that prohibited a municipality from licensing, regulating or governing the rental of residential dwelling units. Municipalities can now regulate rental accommodations through a licensing mechanism in the same manner as they do other forms of businesses. The current state of the legislation appears to permit a municipality to develop a by-law that distinguishes between geographic areas of the municipality and/or by class and type of building. However, care must be taken when considering such distinctions, as will be discussed later in this report. Existing By-laws: Since 2007, there have been only several such licensing by-laws enacted. Below is an overview of certain by-laws of note. London London’s by-law came into effect in 2010. The by-law applies city-wide to all rental buildings with 4 or less dwelling units. The annual license fee is $25 and the process involves a form of self-regulation whereby the property owner is required to complete a checklist to certify that each rental unit is in compliance with the City’s property standards by-law as well as proof of compliance with annual fire inspections. In addition, the owner must provide proof of insurance, as well as floor plans of the units and a maintenance and parking plan. The nominal fee is related to the process whereby the onus is on the property owner to provide all forms of proof and certification as listed above. In the spring of 2010, an area landlord’s association made application to the Superior Court to have the new by-law quashed. Recently, this fall, the Court’s decision on the application was released, with the net effect of the decision being that the challenge was dismissed thereby upholding the legality of London’s by-law. The decision provides some good insight into the process associated with the review and development of such a by-law as a means to protect against such court challenges. At the time of submitting this report, staff have been informed that this decision is being appealed to the Ontario Court of Appeal by the landlord’s association, however no other details were available. As noted in the Background section of this report, staff decided to delay the presentation of this th report from the original date of September 26. The reasoning for the delay related to waiting as long as reasonably possible for the release of the London court decision in an effort to provide members of Council with as much information as possible. Mississauga In May 2010, Mississauga enacted their Rental Accommodation Licensing By-law that relates to the licensing of lodging houses across the entire City. The by-law defines a lodging house as a dwelling with a maximum of 4 lodging units in each lodging house. Such lodging houses are only allowed in detached houses, and basement apartments (ie. duplex) is not allowed. 5 - 13 Oshawa Oshawa’s by-law, the first in Ontario, was enacted in 2008. The by-law is geographic in nature and applies to an area of the City surrounding the Durham College campus, which is an area made up primarily of single detached homes in a series of relatively new sub-division developments. The by-law limits the number of bedrooms in each rental unit to 4, with an annual license fee of $250. The by-law requires that each rental property comply with the City’s Zoning and Property Standards By-laws as well as applicable Fire and Building Code regulations. The licensing process includes the requirement for insurance, floor plans, parking plans and maintenance plans to be submitted. Waterloo The most recent by-law was enacted in Waterloo earlier this year and takes effect in the spring of 2012. The by-law applies City-wide, to all low density rental buildings. There are several classes of licenses available, depending on the nature of the building. Of significant note in Waterloo’s by-law development process was their attempt to restrict the number of bedrooms/bedroom area in each rental unit, including existing units. This would have had the effect of requiring existing rental unit owners to reduce the number of bedrooms they currently have. After much debate and consideration, Waterloo’s Council decided to allow existing rental units, which were legally licensed as lodging houses under their previous by-law on the date the new by-law was enacted, to be grandfathered. Waterloo’s license fee schedule is based on complete cost recovery, with a variety of fees depending on the class of license required. They anticipate the hiring of 6 new staff positions (3 by-law enforcement officers, 1 licensing clerk, 1 fire prevention officer and 1 zoning officer) in time for the implementation of the by-law in early 2012. Our staff have a very good networking relationship with our colleagues in Waterloo and will continue to dialogue with them and monitor the implementation of their program closely. Purpose and Potential Benefits of a Licensing Program: The main purpose of a program to license rental units is to protect the residents in rental accommodations, by making the units subject to those regulations, provincial and municipal, that relate to health, safety and welfare of residents. In addition, it can also minimize the negative impacts that the property may have on a surrounding neighbourhood by ensuring that the property complies with all applicable by-laws that speak to exterior maintenance. A rental property is deemed to be a business enterprise that should be regulated to ensure public safety, neighbourhood stability and provide a level playing field for the rental business owners. The potential benefits to tenants include the provision of safe rental housing, education with respect to all applicable regulations for rental housing and a mechanism to address situations where a rental unit is deemed to be substandard or not otherwise in compliance with the applicable regulations. 5 - 14 The potential benefits to landlords include documentation and assurances that their properties comply with all applicable regulations as well as providing for a fair and level playing field within the rental housing market. The potential benefits to neighbourhoods include provisions aimed at the proper maintenance and care of rental properties. In essence, licensing is an accountability tool, making the business owner accountable to provide safe rental units, as well as for property maintenance and, to a certain extent, perhaps certain behavioural issues that may arise as a result of the property being used for rental purposes. Kitchener’s Focus: In the event that it is decided that staff initiate a review with an aim to a draft licensing mechanism, it is critical that we establish exactly what the focus and goal of such a process is. In essence, the fundamental purpose needs to focus on health, safety and proper maintenance. However, one thing that has become abundantly clear to staff as a result of the monitoring and research conducted thus far, is that the existing by-laws have fundamental differences and the concept of “one size fits all” does not apply in this type of situation. Thus, we would need to establish exactly what the City of Kitchener wishes to achieve and customize a process that provides the best opportunity to deliver on that goal. As an example, a made in Kitchener by-law could focus on low-rise type buildings that have been converted from their original purpose to rental unit accommodations intending to accommodate multiple renters (ie. existing but not purpose built units). Potential Areas of Concern: There are several areas of concern of note, with respect to both the development and implementation of a rental housing licensing program. These include: - The development process undertaken in other municipalities proved to be very contentious, with many varying viewpoints. A by-law development process must include an extensive public consultation element to ensure all view points are heard; - It is important to manage the expectations of all stakeholders with regard to what the licensing process may achieve. It is possible that certain expectations will develop that may not be delivered upon. Such expectations may include the thought that the licensing by-law will eliminate certain behavioural issues experienced in neighbourhoods with relatively high amount of rental accommodations. There are existing by-laws in place to deal with certain types of behaviours (ie. noise, nuisance, parking, etc.) and although a licensing mechanism can assist with behavioural issues to a certain degree, it should not be considered as an acceptable alternative to enforcement of existing by-laws. 5 - 15 - The Ontario Human Rights Commission (OHRC) has taken a particular interest in the licensing of rental units in other municipalities and will almost certainly turn their attention to any municipality that ventures down the same path. Their concerns include the potential for by-laws to target certain sectors of the rental population and potential negative impacts on the supply and affordability of rental units. A public consultation process must include the OHRC. - There is a high degree of probability that there will be opposition from the landlord community, including those not located in areas known for student housing, given the apparent perception that this is a student housing issue. Next Steps: The following comments should be considered in the event that Council wishes to proceed with the investigation of a rental licensing by-law for Kitchener. An initial step will include decision making on key elements of a potential licensing program. These include: - The types/classes of buildings the licensing program applies to; - The implications of a by-law that is geographic in nature; - Should consideration be given to a limitation on the number of bedrooms or bedroom area within a rental unit; - Will the licensing program apply to owner/occupied rental units, or focus on absentee landlord situations; - A fee structure aimed at complete cost recovery. In the event Council wishes further investigation towards a licensing program, staff suggest that a project management type approach be taken, including a form of project plan, to help ensure that the process itself is as thorough and complete as is reasonably possible. An option, for next steps, would be for staff to give consideration to the above noted elements and report back to Council with a proposed set of guiding principles for the draft by-law to guide the review process. This report would also outline the potential resource impacts on the various divisions, in relation to the 2012 Business Planning cycle. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: This report relates to the Community Priority of Quality of Life, as contained in the City’s Strategic Plan. FINANCIAL IMPLICATIONS: It should be noted that, given all the elements to consider as part of the process to develop a draft by-law for Council’s consideration, including the public consultation piece, such a review 5 - 16 will be time consuming and will have an impact staff resources. It is difficult to assign a particular dollar value to this. However, there is likely to be some implications with regard to staff’s capacity to do other tasks during the review process. Further, although it is premature to clearly articulate what a new licensing program may look like, it must be noted that such a program cannot be effectively managed with existing resources. Therefore, a fee structure would have to be developed relating to the costs associated with administration and enforcement. These implications would be discussed further in any subsequent reports on this matter. COMMUNITY ENGAGEMENT: As this is a preliminary report for the purposes of background information only, there has been little in terms of public consultation to this point. Although there have been some communication with potential stakeholders, including the Kitchener/Conestoga College Town and Gown Committee, made up of members of the College students union and faculty, Waterloo Regional Police, the Lower Doon Neighbourhood Association and a Lower Doon landlord representative. There has also been a very brief communication with the Kitchener- Waterloo Association of Realtors as well as the Waterloo Region Apartment Manager’s Association, based on their inquiries to staff. In the event that Council directs staff to proceed with a review and development of a draft by- law, such review will include a community engagement strategy to include any potential stakeholders that can be identified. ACKNOWLEDGED BY: Jeff Willmer, Deputy CAO, Community Services Department 5 - 17 5 - 18 5 - 19