Bylaw could douse Canada's 'hottest' rental market

A four-hour meeting on September 18 erupted in protests and shouting from audience members as landlords protested the bylaw, which would crack down on illegal suites, commonly found in student housing around McMaster University. That anger has now turned to action, as landlords and realtors wade into the debate with an online petition opposing the bylaw.

The licensing scheme would include inspection requirements and annual fees, which can range from $25 to $700. But according to real estate expert Tom Karadza, the bylaw would cost investors more than just fees.

“Whenever licensing is introduced into an area, it’s been our experience that it’s a momentum-killer for investment growth in the area,” he says. “For example, when a broker like us takes investors to different communities and explains there’s going to be licensing laws and fees over and above city bylaws in place. Naturally, people are going to opt for somewhere without those restrictions.”

There also “the redundancy of bureaucracy,” says the Realton. “There are already bylaws in Hamilton for dealing with rental properties.

“They just need to enforce the existing bylaws, there’s no need to bring in new ones. I think they’re trying to address zoning issues in the downtown core and in areas with student housing, but instead of just tackling those hotspots, they’re just applying a broad stroke across the city.”

According to Coun. Brian McHattie, licensing would “provide more protection for tenants” who are often left in “deplorable” conditions by landlords. The crackdown on illegal suites that has already swept through Hamilton has, according to enforcement staff, resulted in 99 charges being laid.

The controversial city plan, on which a final vote is expected in January, may come as a blow to investors scoping out deals in a city that has been touted in recent months as a prime rental market. The city has an affordable housing wait list of almost 6,000 people, and many fear that introducing sweeping bylaw changes will keep those people on a list and out of a rental property.

Still, some investors argue that stiffer licensing acts as a barrier to entry for some investors, helping to protect rents in a city accustomed to economic downturns.

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