Report : CDS-17-045

Department of Community
& Development Services
Telephone (905) 468-3266
Facsimile (905) 468-0301

1593 Four Mile Creek Road
P.O. Box 100
Virgil, Ontario
L0S 1T0

		Submitted on:	June 01, 2017
Report:	CDS-17-045

Report To:	Community & Development Advisory Committee
Subject:	Long Term Rental Housing Licensing By-law

1. RECOMMENDATION
It is respectfully recommended that:
1.1 Council direct Town Staff to begin a public consultation process to facilitate the development of a Long-Term Rental Licensing By-law for the Town; and

1.2 Council include resource requirements for developing a Long-Term Licensing By-law in the 2018 Operational Budget deliberations.

2. PURPOSE / PROPOSAL
The purpose of this report is to investigate the feasibility of a Long-Term Rental Licensing By-law. Similar By-laws in other municipalities have been implemented to help mitigate resident concerns surrounding parking, property maintenance, and safety that often stem from long-term rental housing in residential areas.

3. BACKGROUND
The Town of Niagara-on-the-Lake does not currently have a by-law in place that requires property owners to obtain a license for renting out all or a portion of their property to tenants for residential uses lasting longer than 28 days. Ongoing concerns relating to rental accommodations in the Glendale area have made it necessary to revisit the potential of a licensing by-law in order to address issues that are often associated with concentrated numbers of rental dwellings in one neighbourhood, such as parking, noise, property maintenance, and waste management.

In January 2010, Municipal Law Enforcement circulated a letter to Niagara-on-the-Green homes detailing the requirements regarding boarders and tenants, property standards, and building permits, to inform property owners and rental tenants of the minimum standards in place. This letter generated many responses from residents detailing concerns with the above issues. In February 2010, an Information Report was presented to Council addressing student housing in Niagara-on-the-Green. The Report confirmed that the major issues in this specific area included parking, noise, litter, property maintenance, and fire code violations.

Occasionally, the Town becomes aware of homes being renovated without the proper permits. The renovations include the addition of bedrooms to accommodate students, at times the bedrooms do not meet the requirements of the Building Code and Fire Code. These problems have led the Town to reconsider developing a rental licensing by-law, as regulating this activity is permitted by the Municipal Act.

In January 2015, a motion was passed by Council to:

investigate the necessary steps to implement a plan for creating a process to licence rooming/student rentals and the safety aspect to be included in the plan.

In March 2015, a report on this topic was presented to Council, recommending alternatives to a long-term licensing by-law, specifically, increased resources and focus dedicated to by-law enforcement. The report also recommended that if a licensing by-law were implemented, a town-wide licensing program would be the best approach to addressing the problem. Potential benefits to the Town from implementing a licensing by-law suggested in the report included the establishment of safe rental housing, increased education with respect to regulations for rental housing, and a benefit to neighbouring property owners from the provisions aimed at parking, proper maintenance and care of rental properties.

4. DISCUSSION / ANALYSIS

4.1 Enabling Legislation
Section 151(1) of the Municipal Act states:

Without limiting sections 9, 10 and 11, a municipality may provide for a system of licences with respect to a business and may,

(a) prohibit the carrying on or engaging in the business without a licence;

(b) refuse to grant a licence or to revoke or suspend a licence;

(c) impose conditions as a requirement of obtaining, continuing to hold or renewing a licence;

(d) impose special conditions on a business in a class that have not been imposed on all of the businesses in that class in order to obtain, continue to hold or renew a licence;

(e) impose conditions, including special conditions, as a requirement of continuing to hold a licence at any time during the term of the licence; and (f) license, regulate or govern real and personal property used for the business and the persons carrying it on or engaged in it.

(g) Repealed: 2017, c. 10, Sched. 1, s. 12 (1).

This legislation enables municipalities to implement a licensing system for long-term rentals. Specifically within the Town of Niagara-on-the-Lake, this will be similar to the licensing by-law currently in place for short-term rentals (28 days or less).

4.2 Other Municipalities
Table 1 outlines a review of other Ontario municipalities that have successfully implemented a Long-Term Licensing By-law. Since the by-laws are context-specific, this analysis can serve as a reference point for developing a program that is tailored to the unique needs of Niagara-on-the-Lake. A licensing by-law has the potential to balance the needs of property owners with those of residents looking for safe, adequate, and properly maintained rental accommodation, while limiting the impact of large rental housing units on residential neighbourhoods. The Town still receives numerous complaints from residents in the Niagara-on-the-Green area, indicating the approach to increase by-law enforcement has not been effective. Therefore, Community and Development Services would like to revisit the potential of establishing a long-term licensing by-law.

Table 1. Rental Licensing in Other Ontario Municipalities

Town/ City	Context	License Details	Required Supporting Information	Fee
Barrie	The City of Barrie developed a licensing system for Boarding, Lodging, and Rooming (BLR) Houses to mitigate rental housing issues caused largely by Georgian College.	-License not required: one or two tenants -Small BLR: not more than six tenants -Large BLR: more than six tenants -If individual bedrooms have a locking mechanism, you must have a BLR license regardless of number of tenants -Total floor area of all sleeping rooms shall not exceed 40% of total habitable living space -1 parking space per unit, plus one additional space per 2 tenants -Minimum Separation Distance of 75 metres from other BLRs	-Zoning and Property Standards inspection and approval -Fire department inspection and approval -heating and electrical inspection -liability insurance -detailed floor plan (including parking) -24 hour property manager contact information	-$300, annual renewal
Waterloo	The City of Waterloo enacted Residential Rental Housing Licensing By-Law (2011-047) due to rental housing issues stemming from 3 major post-secondary education institutions.	-6 types of licence Class A: required for all rental units not covered by any other classes Class B: required for all rental units on properties that are owner occupied Class C: all rental units with 5 or more bedrooms Class D: all recognized lodging houses Class E: required for all temporary rental units Class Z: required for all rental units that contain four or more horizontally separated dwelling units	-Police Criminal Record Check for property owner -Electrical Certificate -HVAC certificate -liability insurance -floor and parking plans -proof of ownership -property maintenance plan	-New license fees range from $375-760, depending on class -Five year renewal period
Oshawa	Enacted under the Business Licencing By-law 120-2005, residential properties located in the vicinity of Durham College and the University of Ontario Institute of Technology must be licenced.	-While all rental properties obtain the same class of license, Oshawa has a unique demerit point system to monitor compliance -Demerit points stay on record for 2 years and can result in a revoked license -Points awarded for things such as: operating without a license, illegal use/zoning, lot maintenance, noise, nuisance, property standards, parking, and waste	-statutory declaration -maintenance plan -liability insurance -floor and parking plans -electrical inspection –land transfer/deed	$575, annual renewal
North Bay	Under By-law 2012-55, the City of North Bay utilized a phased approach to ensure the by-law will apply to the entire city by 2016.	-All dwellings with 3-5 rental bedrooms must be licenced, rental bedrooms limited to 5 -Where the homeowner is living in the dwelling, they may rent up to 2 rental bedrooms without a license	-PIN sheet -copy of land transfer -copy of all leases -rental insurance -parking and floor plan -lot maintenance plan -electrical inspection	-$300, renewal every 2 years
London	The City of London enacted by-law CP-19-13002 to address sub-standard housing conditions in rental units, and to protect the amenity, character, and stability of residential areas.	-Any building containing four or less rental units must be licenced -Apartments and townhouses are exempt -Rental Property owners can be fined up to $25,000 for operating without a license	-floor plan -fire inspection -property standards inspection	-$165 for application -$171 fire inspection -$55 annual renewal

4.3 Human Rights Considerations
Planning Act provisions restrict by-laws from distinguishing between individuals and families living together, and suggests that people living together do not have to be related by blood or marriage to be deemed a household. This provision applies to occupancy of a lodging unit or rental unit. As such, a sound planning rationale should avoid ‘people-zoning’ and aim to control residential density based on the physical intensity of use, rather than identifying the users of the space. The Town uses this principle to distinguish between a residence and a boarding/lodging house. A residence is currently permitted to have two or less tenants/boarders, while three or more tenants/boarders changes the definition to a lodging house. Currently, the only residential zone in Town that permits lodging houses as a permitted use is the Glendale Community Zoning District. Legal counsel found no justification for allowing boarding/lodging houses in some residential zones but not others.

The Ontario Human Rights Code (OHRC) Section 14(1) states:

a right under Part I [Freedom from Discrimination] is not infringed by the implementation of a special program designed to relieve hardship or economic disadvantage or to assist disadvantaged persons or groups to achieve or attempt to achieve equal opportunity or that is likely to contribute to the elimination of the infringement of rights under Part I.

In this context, a municipality is allowed to implement policies and programming that aid code-protected groups, but cannot enforce policies that further disadvantage them. This poses an issue for rental housing in Niagara-on-the-Lake, specifically Glendale, as the Glendale Secondary Plan, Section 3.9(d) states:

housing suitable and intended for students of Niagara College shall be discouraged. Houses functionally configured as rooming houses exclusively shall not be permitted.

This policy, as it currently stands, creates a conflict when addressing the issues faced by students, who often associate with code-protected factors such as age or family status. Discouraging student housing also directly impacts the affordability of post-secondary education for many individuals. The OHRC has expressed concerns related to this, specifically with regards to minimum per person floor space requirements in bedrooms (in the case of Waterloo). In the opinion of the OHRC, “people should be able to share a bedroom, if they choose… any related questioning or investigation could lead to human rights complaints”. Bedroom sizes need to comply with Building Code regulations, but could accommodate two or more people; “‘Per occupant’ references can severely limit housing options for people who commonly share rooms, such as couples, families with children, and many other people who identify under code grounds… the OHRC finds ‘per occupant’ references to be discriminatory.”

The March 2015 report (CDS-15-022) details the following advice from the OHRC with regards to rental housing licensing:

Consider the Ontario Human Rights Code before drafting the bylaw and refer to the Code in the bylaw;
Consult with OHRC protected groups;
Make sure that meetings about the bylaw do not discriminate;
Roll out the bylaw in a consistent, non-discriminatory way;
Work to secure existing rental stock;
Avoid arbitrary bedroom caps;
Avoid gross floor area requirements that exceed the Building Code;
Eliminate minimum separation distances;
Enforce the by-law against the property owner, not the tenants;
Protect tenants in cases of rental shut down;
Monitor for impacts on OHRC groups; and
Make sure licensing fees are fair.

It is worth noting that some of the examples provided in Section 4.1 above do not meet all of these criteria. Care should be taken when developing a by-law for Niagara-on-the-Lake to ensure that the resulting policy meets OHRC criteria for an acceptable and non-discriminatory by-law.

4.4 Enforcement
The current approach within Niagara-on-the-Green and other residential areas includes by-law enforcement on a complaint basis only. If a violation is observed, reasonable notice is given to rectify the situation, and if it is not heeded, notice goes to the owner and resident detailing the consequences of non-compliance. When a complaint is received regarding issues surrounding rental rooms, inspectors also assess compliance with property standards, Building Code and Fire Code, and a schedule for compliance and consequences of non-compliance are discussed with the owner. Based on feedback from residents, including but not limited to those sitting on the Glendale Task Force, it has been made clear that this approach is not sufficient, and the desired results have not been achieved through increased by-law enforcement alone.

In April 2011, Municipal Law Enforcement detailed a list of proactive, strategic changes to the current system of enforcement, including the following:

Create a database of all known/suspected rental properties;
Regular patrolling of these properties and known high-risk areas, especially during move-in/out, holidays, reading week, weekends during good weather, etc.; and
Budget increased staffing for these purposes.

These suggestions were put forward prior to the OHRC comments on discriminatory licensing by-laws. As such, enforcement strategies should be revised to ensure that they are not discriminatory, including to students. For example, intentional increased patrolling during reading week can be construed as discriminatory to students. Questions about how a licensing by-law could be enforced often prove to be a barrier to implementation.

Enforcement often relies on strong cooperation with property owners and residents, as most enforcement is complaints based. There are several common enforcement strategies, beyond simply responding to complaints, which could be implemented in Niagara-on-the-Lake alongside a licensing by-law to assist in successful enforcement, including:

Random inspections in high-incidence areas (e.g. Niagara-on-the-Green);
Good Neighbour Handbook: this strategy was successful in North Bay to inform students, rental tenants, and property owners of their respective responsibilities as members of a residential community. Additionally, the publication detailed the proper avenues to report issues and non-compliance. This type of communication is fundamental to developing a functioning complaints and enforcement strategy. If residents are unaware of how to report issues and why this is important, a complaint-based enforcement system will not function properly.
Property Inquiry System: Used in Barrie and North Bay, a continuously updated public list of licensed rental properties is available to the public. Prospective and current tenants can use this list to ensure that the property they live in is a licensed property, and provides grounds to file a complaint if it is not. This assists the enforcement team in identifying properties that are operating in violation of the licensing by-law (i.e. operating without a licence). This system is currently in place for the Town’s Short-Term Rental Licensing By-law (28 days or less), and a long-term licensing system could follow the same format for consistency.

4.5 Public Consultation
Previous reports written by Town Staff as well as OHRC comments stress the importance of public consultation for developing a licensing by-law that is non-discriminatory. As such, an in-depth public consultation strategy is the necessary first step to developing such a by-law for Niagara-on-the-Lake. Town Staff should work closely with any persons or groups that have an interest in rental licensing, including but not limited to: residents, property owners, homeowners, landlords, tenants, and students. This consultation provides the foundation for a non-discriminatory by-law that considers the views of all stakeholders and addresses the unique concerns of the many diverse residents that share an interest in their community. In order to reach a wider audience, Town Staff should engage stakeholders in a variety of formats. Examples of public consultation that may be beneficial in this context include public meetings, focus groups, and interviews.

4.6 Next Steps
In order to develop a licensing by-law that is context-appropriate for Niagara-on-the-Lake, the information provided in this report should be used as a basis for public consultation to ensure that all stakeholder viewpoints are heard, including property owners, residents, tenants, students, etc. Additionally, it is critical that the policies developed consider the Ontario Human Rights Code and OHRC comments. Further review and ongoing engagement should address the following points:

Determine the types of properties/units to be included in the licensing bylaw;
Determine what classes of licence are appropriate, and how the license classes should be defined;
Assess whether a demerit point system is to be included in the by-law, including what infractions warrant the awarding of points, and how many points per infraction. This should be based on what violations are deemed to be most significant for Niagara-on-the-Lake specifically. Additionally, Town Staff needs to decide on appropriate consequence for being awarded demerit points;
Review the drafts of the ‘Good Neighbour Flyer’ initiated in 2015, and tailor it to the current situation. Town Staff could work with relevant bodies such as Niagara College to determine an appropriate and effective circulation strategy;
Compile a list of supporting documents are necessary for application, and determine how they will be assessed;
Calculate an appropriate licensing fee based on an in-depth review of associated costs with respect to on-going administration and enforcement. This calculation should also consider how often a license needs to be renewed, and what the fee shall be for renewal;
Define the penalties for non-compliance/operating a rental unit without a license;
Develop an in-depth enforcement strategy and ensure it is implemented with diligence; and
Finally, there is significant potential for many of these policies to be consistent with those that already exist in the Short Term Rental Licensing By-law (4634-13). For consistency, Town Staff should use the provisions already in place wherever it is contextually appropriate (for example license application process, time period, issuance and denial, etc.).

5. STRATEGIC PLAN
The Strategic Plan does not address the licensing of rental housing.

6. OPTIONS
N/A

7. FINANCIAL IMPLICATIONS
Implementation of a long-term rental licensing by-law will have a financial impact on Town resources, specifically related to Staff time to develop the by-law, By-law Enforcement, Fire and Building Department inspections, increased staffing for enforcement, and Corporate Services for administering the licenses. Perhaps the most significant financial impact will be with regards to property inspections.

Despite the additional enforcement and inspection costs noted here, there is a strong potential to recover a large portion of these costs through licensing fees. As noted above, OHRC recommends a fair licensing fee. This could be interpreted to mean that the Town should endeavor to recover an appropriate amount of the costs incurred through the fee assigned. It is recommended that resources are allocated to this program in the development of the 2018 Operational Budget.

8. COMMUNICATIONS
If Council chooses to consult with the public, the process would be advertised in the newspaper and on the Town's website. In addition, the consultation would involve all Town Departments and affected external agencies and stakeholders.

9. CONCLUSION
Town Staff recommend that steps are taken to develop a long-term rental licensing by-law for the Town of Niagara-on-the-Lake in order to mitigate ongoing concerns regarding parking, noise, property maintenance, and safety in residential neighbourhoods. Such a by-law will encourage landlord accountability with regards to providing and maintaining safe, appropriate housing for persons seeking affordable rental housing. This process should begin with additional research and an extensive public consultation process to address the issues outlined in Section 6, as well as provision of resources for this purpose in the 2018 Operational Budget.

Respectfully submitted,