Consider Making Vacant Units Available for “Emergency Shelter”?

COVID-19 is likely to
have a devastating impact for student housing operators and, quite possibly,
for multi-res landlords generally, given the financial challenges resulting
from tenants vacating tenancies to seek lower cost housing options. One area of
housing for which there is now substantial demand is “Emergency
Shelter”. Emergency shelter includes short term housing for victims of
domestic abuse. Such housing may also be needed for “front line”,
high risk medical professionals, first responders and “essential
service” workers who are seeking, on an urgent basis, alternative safe
housing options, either for their families or themselves, to live separately to
avoid infecting spouses and children with coronavirus. Emergency housing also
includes short term housing or “transitional housing” for homeless
persons.

There is government
funding available for the provision of emergency shelter and transitional
housing, particularly for victims of domestic abuse and the homeless. In the
case of medical professionals and first responders seeking additional housing
for themselves or their families, the gesture of providing such housing at a
substantial discount may make practical and financial sense in the context of
helping COVID-19 front line workers. In cases where you properly provide
“short term living accommodation” as emergency shelter, you are not
prejudiced by renting units out at a substantially discounted rate; section 5
(f) of the RTA creates an exemption from the RTA for such housing. Similarly,
for longer term “transitional housing”, there is an RTA exemption (s.
5.1) but it is subject to a several conditions, including a requirement that
all or part of the funding be provided through government programs.

If you decide to provide
discounted emergency shelter or transitional housing, you should ensure that
leasing documents and occupancies will meet the legal test to fall within the
exemptions. If you enter into a “head lease with a social service or
government agency to lease a block of units, it is important to ensure the
“head tenant” either pays market rent or, where the use provided at a
substantial price discount, that the head tenant implements, complies with, and
enforces the short term emergency shelter or transitional housing uses. Legal
advice is recommended if you decide to implement discounted emergency shelter
or transitional housing options because if you don’t fall within the
exemptions, you will be prejudiced by the rent control and security of tenure
provisions of the RTA.

COVID-19 has unleashed
“novel” challenges for Canadians generally, and particularly for the
multi-res housing industry. As circumstances evolve, housing options for
persons in need of emergency shelter and transitional housing are also
evolving. For landlords who may soon find themselves with vacant units,
consideration of providing alternative, low cost housing may be an opportunity
to contribute to “bending the curve” and to give back to the broader
community burdened by COVID-19.

Questions?

For “Emergency Shelter” leasing contact Kristin Ley: ley@cohenhighley.com

For “Transitional Housing” leasing contact Mark Melchers: melchers@cohenhighley.com

For general questions contact Joe Hoffer: hoffer@cohenhighley.com