“A Tale of Two Cities”: Landlord Licensing in Waterloo v. Guelph, Update

Two very different approaches to landlord licensing have been taken by municipalities in Ontario. A regressive approach has been to use licensing as a “tenant tax”, with a “per rental unit fee” going into municipal revenues to support the hiring of additional municipal staff and generate “reserves”, all at the expense of landlords and tenants. The other approach is to implement a results-based strategy of enforcing existing municipal laws to ensure safe and affordable housing without imposing added costs on landlords and tenants.

More progressive municipalities like Toronto, Hamilton and Ottawa and Guelph (?) have used the second approach, rejecting licensing and opting instead for enforcement of existing powers. Revenue hungry (a.k.a. “greedy”) municipalities, like Oshawa, London and especially Waterloo, have opted for the “tenant tax” approach, using tenants as revenue generators for the municipality. We have left a question mark above with Guelph as it has proposed following the progressive approach but council has yet to make a decision. As for Waterloo, it has generated in excess of $1.3 Million through its tenant tax, with townhome tenants facing monthly rent increases of between 5% and 7% to pay for the hiring of more municipal staff and to help offset Waterloo’s legacy of municipal fiscal mismanagement.

Guelph Update

Guelph staff recommend that licensing be rejected as a means of ensuring safe, affordable housing for residents. Instead, staff recommend that there be a pro-active, results-based enforcement program of inspections and directives using existing Building Code, Fire Code and Property Standards regulations, all of which are currently part of the municipal “tool kit”. A copy of the staff report and links to make submissions to Guelph are available at guelph.ca/rentalhousing and at the following link: Rental Housing Licensing Report and Attachments

This is the second time that staff have recommended rejection of licensing because some members of Guelph council referred the question back to staff after it first came forward. WRAMA members are encouraged to access the link and make submissions to support the staff recommendations and follow the examples of progressive municipalities. If you remain silent with Guelph Council, which is largely what happened in Waterloo, then you run the risk of Guelph Council adopting the regressive example set by Waterloo, which funds its regressive licensing program on the backs of tenants.

Waterloo Update

Waterloo’s licensing program has generated surplus revenues of $1.3 Million and counting. Much of the surplus has been transferred into “reserves” and can be spent by the City for any purpose it chooses. Meanwhile, Waterloo is involved in litigation with larger townhouse rental operators who have challenged the by-law on the basis that it is, in fact, a “tenant tax” and therefore void. The by-law has also been challenged on the grounds that it discriminates against townhouse tenancies v. apartment tenancies (which are exempt) on the basis of “family status”, since more “families” with children reside in townhouse tenancies than in apartment tenancies, yet only townhouse tenants face the financial burden of the tenant tax, with no added municipal service provided. Townhouse tenants face substantial rent increases via Above Guideline Rent Increases based on “municipal charges” whereas the apartment tenants face none.

In addition, in a petty, mean-spirited move against Waterloo landlords who are involved in the legal challenge, the City sent teams of uniformed by-law enforcement officers into their townhouse complexes, giving notices to tenants demanding production of personal financial records and leasing documents, and threatening tenants with prosecution if they failed to cooperate. The Privacy Commissioner of Ontario is investigating a complaint about Waterloo’s invasion of tenants’ privacy through its aggressive and unnecessary demands of personal information from tenants. In some cases Provincial Offence Charges have also been laid or threatened against townhouse operators who are involved in the legal challenge in an effort to leverage compliance and payment of funds. The court proceedings themselves continue, with hearings in Divisional Court likely to occur this fall.

In summary, among WRAMA’s membership we see two very different regulatory strategies being implemented by municipalities: one is progressive and results-oriented whereas the other is both regressive and abusive toward WRAMA members, but the ones paying the financial price are tenants.

This update is submitted by Joe Hoffer, legal counsel for landlords who are challenging the licensing by-law in Waterloo. Joe also represented Guelph landlords at public hearings and in written submissions, as well as submissions made on behalf of Hamilton landlords, where licensing was rejected in favour of progressive enforcement strategies.

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