THE VALUE PROPOSITION OF A STRONG INDUSTRY ASSOCIATION · PDF filethe value proposition of a strong industry association scott andison january 15, 2016

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

FRPO—Federation of Rental-housing Providers of Ontario 3

GovernmentRela-ons&

Policy

Training&Educa-on

MemberServices&Programs

Events

Cer-fica-on&

Creden-aling

Professional industry association

Been around for over 25 years

Membership represents over 350,000 suites

Provincial-level focus


A strong industry association provides the ability to better manage and influence the future

Engaging government with evidence-based

policy advice and action

Education & Training

Programs

Supporting quality service delivery and

standards

Setting industry quality standards


Supporting Municipal Engagement Through Regional Associations

Chatham-Kent

London

Waterloo

Hamilton

Greater Toronto Area

Peterborough

Quinte

Kingston

Eastern Ontario

OttawaNorthern Ontario


A Federation of Resources Across Canada


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 �


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


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


Ontario’s Rental Housing Supply Crisis

§  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

THE INTENT

§  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

THE RESULTGOVERNMENT

ACTION OVER TIME

INTRODUCED RENT CONTROL REGIMES

DIRECT INVESTMENT & MANAGEMENT OF BRICKS

AND MORTER

CREATED A PATCHWORK OF INDUSTRY POLICIES AND RULES OVER TIME


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

Poverty Reduction Strategy


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

0% 20% 40% 60% 80% 100%

15-24

25-34

35-44

45-54

55-64

65-74

75+

Percent Renting

Age

Gro

up

AGEPROFILEOFONTARIORENTERS


FRPO’S MOST COMPREHENSIVE

POLICY INITIATIVE��

Housing That People Can Afford

Tabled June, 2015

�REMOVING BARRIERS TO NEW RENTAL HOUSING IN ONTARIOJUNE 2015

14

SELECT FRPO POLICY PRIORITIES

§  Rent Control

§  Rent Dispute Process

§  Property Tax & Assessment

15

RENT CONTROL


RENT CONTROL

An idea that plays well with tenants and voters

But it is a policy that brings dire economic consequences

POLICYCHANGEIMPACTSONSUPPLY

POLICYISSUES


RENT CONTROL

POLICYISSUES

INFLATION IS PUTTING PRESSURE ON 2.5% RENT CAP

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014 AVERAGE CPI RATE 2.4%

HARD CAP

GUIDELINEHISTORY

2015 1.6%

2014 0.8%

2013 2.5%

2012 3.1%

2011 0.7%

2010 2.1%

2009 1.8%

2008 1.4%

2007 2.6%

2006 2.1%

2005 1.5%

2004 2.9%

2003 2.9%

2002 3.9%

2001 2.9%

2000 2.6%

2014 Guideline Increase 0.8%


0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

AVERAGE ANNUAL CPI BELOW GUIDELINE INCREASE

2015 AVERAGE CPI RATE 1.2%

2015 Guideline Increase 1.6%

RENT CONTROL

POLICYISSUES GUIDELINEHISTORY

2015 1.6%

2014 0.8%

2013 2.5%

2012 3.1%

2011 0.7%

2010 2.1%

2009 1.8%

2008 1.4%

2007 2.6%

2006 2.1%

2005 1.5%

2004 2.9%

2003 2.9%

2002 3.9%

2001 2.9%

2000 2.6%

HARD CAP


RENT CONTROL

POLICYISSUES

The current new development policy set out in the Residential Tenancies Act is the primary reason why new rental housing is being built

POST 1991EXEMPTION

VACANCYDECONTROL

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RENT DISPUTEPROCESS


RENT DISPUTE PROCESS

POLICYISSUES

Comparison of Average Days to Resolve Landlord-Tenant Disputes��British Columbia 35�Alberta 17�Saskatchewan 25�Manitoba 32�

Ontario 90 ��

§  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 is pursing two significant solutions with government to bring about an appropriate balance to the current dispute process

22

PROPERTY TAX& ASSESSMENT


POLICYISSUES

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)


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

§  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)

FRPO Has Successfully Championed An Overhaul of How Multi-Residential Properties Are Assessed

Ontario’s 15,000 multi-residential buildings will now be valued on a capitalized income method starting in the next reassessment cycle

Valua-onmethodology

TRADITIONAL APPEAL RATE (including RfRs)

> 50%


Municipaltaxpolicy

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

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


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

SUITE METERING

§  Extend to electrically heated units

PROPERTY TAX§ Reduce number of appeals

§ Tax fairness for tenants

MUNICIPAL LICENSING

§  Enact the previous regulation to exclude apartment buildings


www.frpo.org

§  Advocacy information

§ Member �bulletins

§  Reports§  Industry news§  Training & events§ Membership

programs

28

Scott Andison�President & CEOFederation of Rental-housing Providers of Ontario

tel: 416-385-1100 email: [email protected]

Documents

THE VALUE PROPOSITION OF A STRONG INDUSTRY ASSOCIATION · PDF filethe value proposition of a strong industry association scott andison january 15, 2016