HomeMy WebLinkAboutDSD-2025-200 - Rental Replacement By-law Year-One UpdateStaff Report
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Development Services Department www.kitchener.ca
REPORT TO: Community and Infrastructure Services Committee
DATE OF MEETING: June 2, 2025
SUBMITTED BY: Garett Stevenson, Director, Development and Housing
Approvals, 519-783-8922
Rosa Bustamante, Director, Planning and Housing Policy/City
Planner, 519-783-8929
PREPARED BY: Lucas Van Meer -Mass, Senior Planner (Housing), 519-783-8949
WARD(S) INVOLVED: All Wards
DATE OF REPORT: May 15, 2025
REPORT NO.: DSD -2025-200
SUBJECT: Rental Replacement By -Law Year -One Update
RECOMMENDATION:
For Information.
REPORT HIGHLIGHTS:
• The Rental Replacement By-law is a component of an evolving set of policies for
protecting residential tenants, by providing compensation, relocation support, and the
right of return through binding Rental Replacement Agreements.
• The By-law positions the City as one of the leaders in Ontario in tenant -focused and
growth -supportive housing policy and planning.
• There is a separate body of work for the rental renovation licencing by-law review,
which is anticipated to come to committee on June 16, 2025.
• The Rental Replacement By-law has resulted in four applications, affecting a total of
50 rental units. Staff have also had early conversations on six other properties
affecting 40 additional units, both demonstrating strong uptake and its value in
protecting existing affordable housing and tenants vulnerable to displacement.
• Staff are proposing amendments to the Rental Replacement By-law guidelines to
streamline the review process, reduce administrative burden, and ensure clarity early
in the planning process. There are no changes recommended to the By-law itself.
Amendments to the guidelines have been delegated to the Director of Development
and Housing Approvals.
• The amendments to the guidelines proposed herein reflect applicant experiences with
the By-law so far, and Staff will continue to monitor the impact of the By-law on
tenants, the affordable housing stock, and its impact on local development patterns
over the coming year.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
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• Staff have been advised by Applicants that the Rental Replacement By-law has added
cost and time to some development proposals. Increased costs are the result of
payments or rent waivers required to current/existing tenants. Added time was partly
due to the nature of the information required for the application, the requirements of
the by-law, and because the effective date of the by-law was in the middle of some
ongoing planning approval processes.
• The Rental Replacement By-law is one of Kitchener's many housing initiatives, that
has been implemented as part of its Housing for All Strategy.
• This report supports Building a Connected City Together: Focuses on
neighbourhoods; housing and ensuring secure, affordable homes; getting
around easily, sustainably and safely to the places and spaces that matter.
BACKGROUND:
On January 30, 2023, Council directed staff to prepare a rental housing, eviction and
displacement study that explored tools that the City can use to support residents displaced
from their housing. This direction emerged from the findings of the City's 2020 Housing for
All Strategy, which recommended finding innovative tools to preserve and increase
housing supply. In December 2023 Council directed the preparation of a rental
replacement by-law which was developed in the Spring of 2024 following a comprehensive
study of the legal and jurisdictional precedents and a financial feasibility study completed
by Parcel Economics Inc. This work allowed staff to structure the By-law in a way that
balances protections for tenants while enabling additional housing supply.
The Rental Replacement By-law was passed in June 2024 under Section 99.1 of the
Municipal Act, applying to the demolition of residential buildings with six or more rental
units. As part of Council's approval of the By-law, Council directed that staff report back in
June 2025 reviewing the impacts of Kitchener's Rental Replacement By-law. Additionally,
Council directed that staff report back in June on the status of additional tools that may be
used in the area of evictions due to renovations. There is a separate body of work for the
rental renovation licencing by-law review, which is anticipated to come to committee on
June 16, 2025. The purpose of this report is to provide a 1 -year update on Kitchener's
Rental Replacement By-law.
The By-law is authorized under Section 99.1 of the Municipal Act and applies when
dwelling units within residential properties with six or more units are proposed to be
demolished or converted. When a Planning Act application proposes to demolish or
convert an eligible residential rental building, the Rental Replacement By-law includes
three options for tenant compensation:
Temporary Offsite Replacement Unit: A comparable rental unit rented at the same
price as their existing unit until construction is complete at which point the tenant is
given first right of replacement to occupy a comparable unit in the completed
development.
Rent Waiver: The option of remaining in their unit for 12 months rent-free with the
obligation to vacate thereafter. Additionally, the developer will be required to provide a
unit in the new building at affordable rents for a period of 10 years.
Cash Payout: The option of receiving the cash equivalent of 10 months of rent and an
agreement to vacate the property in two months. Additionally, the developer will be
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required to provide a unit in the new building at affordable rents for a period of 10
years.
REPORT:
In its first year, the Rental Replacement By-law has been an important protection for
tenants at risk of losing their homes through demolition. It has been working as intended,
however, staff have identified opportunities for process improvements and clarifications.
Ten development proposals have been subject to the By-law since its approval in June
2024, demonstrating that there is considerable market pressure to redevelop rental
properties with affordable units and that there is a need to protect the tenants of these
buildings from the hardship of displacement. Staff are proposing amendments to the
guidelines to provide greater clarity and to make it easier and faster for developers to
follow the By-law. These changes will help protect tenants while still supporting new
housing. Staff will continue to track projects subject to the By-law to make sure important
housing developments stay on schedule.
Application Characteristics
The City has received four Rental Replacement applications, affecting a total of 50 rental
units. Staff have also had early conversations on six other properties affecting 40
additional units. Most of the properties subject to the By-law have been relatively
affordable, purpose-built rental buildings between 30 and 80 years old, typically with 10 to
30 units. Two main types of redevelopment proposals have emerged. The first involves
converting existing rental buildings with a mix of one-, two-, and three-bedroom units into a
larger number of smaller -sized units. The second involves consolidating several
properties—often smaller rental buildings and single detached homes—into larger
development sites to support bigger projects.
Staff are closely monitoring the size and cost of the units being affected by the Rental
Replacement By-law, and, although the number of applications the City has received to
date does not provide sufficient data to allow comprehensive analysis, there is an
indication that some of the affected units are being rented at rates at or below the City's
definition of affordable and the average asking rent for comparable units now on the
market.
Streamlining Application and Review Procedures
In preparing the Rental Replacement By-law, staff were careful to balance the interrelated
policy goals of creating new housing supply and preserving the health and diversity of the
city's most affordable rental housing. Since the By-law's adoption, staff have monitored its
effects on development proposals. To date, only four applications subject to the By-law
have been formally submitted, with only one application proceeding to final approval.
There are not enough applications under review or approved to draw conclusions on the
impact of the by-law on the development review process. Staff will continue to monitor
project progression closely over time to assess any longer-term impacts.
Early data suggests that its requirements have applied to only a modest share of overall
redevelopment activity across the City. Focusing specifically on the properties subject to
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the By-law, Table 1 shows that of the 90 rental units affected across 10 properties, only 19
units are currently occupied or will need to be replaced at affordable rental rates. While it
is still early in the approvals process for these projects, and timelines vary, all 9 of the 10
properties remain active and under review.
Address
Status
Existing Units
Units Subject to
Proposed
the By -Law
Units
22 Woodfern
Application Submitted
17
2
34
40-42 Eby Street
Permit Issued
8
0
105
67 Blucher Street
Preliminary
4
4
8
Conversations Held
191 Morgan
Application Submitted
18
7
29
544-550 Lancaster
Preliminary
6
0
878
Street W
Conversations Held
136 Brentwood/ 135-
Application Submitted
7
6
118
161 Jackson
169-183 Victoria Street
Preliminary
8
-
120
South
Conversations Held
9-27 Turner Avenue
Preliminary
7
-
30
Conversations Held
667 Victoria
Preliminary
7
Conversations Held
111 Hoffman Street
Preliminary
8
-
15
.... .... ....
Conversations Held
.... .... .... ..
.... ....
.... ....19 ....
Totals
90 �
1,337
Table 1 Rental Replacement Projects Since June 2024
Staff recognize that for many applicants, awareness of the By-law emerged only partway
through the planning approvals process. To reduce uncertainty and improve predictability,
staff have proposed administrative amendments to the Rental Replacement guidelines.
These changes are procedural in nature and do not require Council approval or changes
to the By-law itself. The amendments are generally outlined in the following sections.
Clarification on Replacement Unit Size:
Additional guidance on replacement unit size will be included in the Rental Replacement
guidelines to clarify that:
• For tenants that selected the Temporary Replacement Unit option, the unit that the
tenant is entitled to return to after construction means a rental unit with a quantity of
rooms generally equal to the unit from which the tenant is displaced, offered to the
tenant at their existing rent and shall include, at minimum, access to reasonably
comparable amenities to those included with their existing rental unit.
Application Resubmissions and Vacancy Timing:
To provide clarification on the application of the By-law as it relates to the length of time a
unit has been vacant, the Rental Replacement guidelines will be clarified as follows:
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• If an application is withdrawn and resubmitted within six months of the original
submission date, the applicant will continue to be subject to the Rental
Replacement obligations that applied at the time of the original submission.
• If any rental units became vacant between the time of the original application and
the resubmission, the applicant will still be required to replace those units, in
accordance with the vacant unit provisions set out in the Rental Replacement
guidelines.
• If a unit was vacant for less than six months at the time of the original application,
but by the time of resubmission has been vacant for more than six months, the
applicant will nonetheless be required to replace that unit under the guidelines.
This clarification in the guidelines will help prevent applicants from allowing units to
become vacant during a resubmission window in order to avoid obligations under the By-
law, ensuring fairness to tenants and consistency in the application of the by-law.
Early Tenant Notification and Distinction from Residential Tenancy Act Processes:
Procedural updates will also require:
• All compensation options to be presented to tenants at the time of the Rental
Replacement application; and,
• Clear communication that compensation under the Residential Tenancies Act (RTA) is
separate from obligations under the Rental Replacement By-law.
This distinction is critical because tenants are entitled to different compensations and
landlords are subject to obligations under RTA and the City's Rental Replacement By-law.
For example, a tenant may be asked to vacate their unit under the RTA (e.g., via an N11
agreement) before the Rental Replacement Permit is triggered. An N11 agreement is a
mutual agreement between the landlord and tenant to vacate the property and may be
accompanied by financial compensation. In such cases, clarity will be provided in the
guideline that:
• For tenants that have signed an N11 agreement but not yet vacated, a Tenant
Compensation Agreement will still be executed, with RTA compensation credited
toward the By-law's cash payout option;
• The applicant will still be required to replace all qualifying units that were occupied
within six months of the application date, regardless of whether an RTA compensation
had been paid to the tenants of the vacated units.
This approach ensures that tenants who vacate early are not denied compensation
afforded to them under Kitchener's Rental Replacement and additionally that the
preservation of affordable rental supply is upheld. Together, these adjustments will make
the Rental Replacement process more transparent and predictable for applicants, while
maintaining the By-law's intent.
Clarification for Non -Profit Applicants
While the existing By-law explicitly references non-profit cooperatives, other non-profit
housing providers are not specifically addressed. To better support the unique
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programming needs of non-profit housing providers — such as seniors' or supportive
housing - the guidelines will be amended to clarify that:
• All non-profit applicants are required to offer tenants compensation options (cash
payout, rent-free temporary accommodation, or right of return), consistent with
applicants in the private -market development sector.
• Non -profits may be exempted from the requirement to replace units with a comparable
rental unit, recognizing that the non-profit mandate to provide housing (e.g., smaller
units for seniors) often necessitates different unit mixes. As an example, supportive
shared/emergency housing operated by a non-profit housing providers may be
replaced with a different form of housing (lodging houses, semi -shared living
accommodations, one and two bedroom units). The type of supportive/affordable
housing provided may vary depending on need and funding models and availability.
This clarification maintains fairness for tenants while allowing non -profits the needed
flexibility, supporting affordable housing innovation.
The procedural changes recommended in this report will add clarity and efficiency to the
Rental Replacement By-law process.
STRATEGIC PLAN ALIGNMENT:
This report supports Building a Connected City Together: Focuses on neighbourhoods;
housing and ensuring secure, affordable homes; getting around easily, sustainably and
safely to the places and spaces that matter.
FINANCIAL IMPLICATIONS:
Capital Budget – The recommendation has no impact on the Capital Budget.
Operating Budget – Staff estimate that 15-20 hours of staff time are required to process
and administer each Rental Replacement Application. The majority of applications were
received in late -2024 and early 2025 and are still in process. Staff have therefore not yet
had the opportunity to assess the length of time required to administer and execute tenant
compensation agreements and the agreements with owners guaranteeing affordability in
replacement units, as per the terms of the By-law. Through Budget 2026, staff will be
adding a new Rental Replacement Application fee to the 2026 User Fee schedule.
COMMUNITY ENGAGEMENT:
INFORM – This report has been posted to the City's website with the agenda in advance
of the council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
DSD -2024-282 - Proposed Rental Replacement By -Law
Municipal Act, 2001
REVIEWED BY: Natalie Goss, Manager, Policy & Research
APPROVED BY: Justin Readman, General Manager, Development Services
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