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Friday, 23 November 2012 13:25

Bylaw could douse Canada's 'hottest' rental market

Written by  Jemima Codrington
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A controversial licensing plan has Hamilton landlords up in arms, the city proposing to pass a bylaw to license buildings with six or fewer rental units.

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.

Last modified on Saturday, 24 November 2012 09:37

4 comments

  • Hal Tuesday, 04 December 2012 12:13 posted by Hal

    Just let the market work without government intervention. When the government gets involved, you see inefficiency and unexpected results. In this case, you will see higher rent prices, and few rental units. It is just the law of supply and demand. City counselors don't seem to understand it.

  • PEEGEE Friday, 30 November 2012 13:38 posted by PEEGEE

    Licensing as just aother tax grab and as one person said, creates ""something to do" for many very well (over?) paid public employees! There are myriad laws now which invoked and enforeced would sufficiently address any broken by-laws or "bad" living conditons. And By the way, Guess who in most cases creates the "bad' liviing conditoins? The tenant whpo is occupying the premises of course! If more costs are added to a landlord's yoke, then obvioulsy they will have to be passed on to the new tenants! For gosh sake-enough already!!

  • Victor Ne Tuesday, 27 November 2012 22:36 posted by Victor Ne

    "licensing would “provide more protection for tenants” who are often left in “deplorable” conditions by landlords"...
    Deplorable conditions ehh... don't like the place - go live somewhere else.

  • Rick A Tuesday, 27 November 2012 15:40 posted by Rick A

    This is whats Canadian face daily. Public sector workers interfering in the free market system so they can feather their pension funds. Its time to halve the size of government in Canada. Amalgamation in area's like Victoria BC must happen. The people who make things happen, ordinary citizens can no longer be bleed to death by petty bylaws that achieve nothing and are principally intended to extract funds for public sector benefits. Most bylaws are NOT democratic because they are created by public sector workers sitting around desks trying to extract funds from the people who make Canada work.

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