City of Brantford Council approved a condominium conversion policy during the Committee of the Whole, Planning and Administration meeting on Tuesday, April 16, 2024.
Mayor Kevin Davis and Councillor Richard Carpenter brought the resolution forward to address concerns regarding purpose-built rental apartment buildings being converted into condominiums, and to help protect residential housing in order to meet the needs of current and future residents.
“The conversion of rental apartment buildings to condominium tenure has the potential to displace existing residents from their homes, deplete the supply of purpose-built rentals and affordable housing options, impact vacancy rates and average rents, and does not increase the overall supply of housing units,” read Carpenter.
The resolution directed staff to go forward and investigate options and best practices with specific recommendations, criteria, and conditions to consider for limiting the conversion of rental apartment buildings to condominium, including the likes of policies, regulations and requirements, that may be implemented through a potential Official Plan amendment and/or rental housing protection by-law.
Carpenter said that the conversion of older rental buildings into condominiums can often create issues for not only residents, but condo owners as well. He said that when a condo corporation purchases an older rental building, they are required to do a reserve fund study under the Condominium Act and later find out the building is far older than expected and requires serious repairs.
“They find out that the building was 50-years-old, that the elevators no longer meet the requirement, that the parking garage needs to be replaced and that it’s five or six million dollars, or that the patios and the balconies need to be replaced,” he said. “What happens is, the condo owner buys this condo for three or $400,000 then finds out that the $50 condo fee that was suggested in the original condo plan, is now four or $500 a month, and then they cannot sell their condo for what they paid for it. They’re stuck with it and they have to pay a lot of money to fix it up. And what we find ourselves in, is a shortage of rental units.”
Carpenter said that they aren’t trying to necessarily discourage condo conversion, but that they want to make sure it’s done under the right conditions.
“For example, maybe if you’re going to do a condo conversion, you do reserve funds first to find out what that building needs before you sell it to unknowing people that don’t know what the building is going to need or require,” he said. “Some rules and regulations around this so it’s clear for both sides, will be helpful.”
Davis said he agreed with everything that Carpenter had to say and noted that these types of situations continue to hurt the City’s rental options.
“…Rentals are an important part of our housing stock. … There hasn’t been a lot of rental buildings constructed in the last several decades and that’s because for developers, they don’t make as much economic sense as condos,” he said. “The Federal government’s trying to change that, to their credit, through various tax and depreciation policies that will make it more attractive to build rental buildings, but in the meantime, I think it’s reasonable as a policy, to protect the rental stock you have, to look at when you will allow rental condo conversions and when you won’t.”
He said that while many people may suggest that a condo owner could simply just rent out their unit to help increase rental stock, it doesn’t provide the same security for the tenant.
“The problem with that, is the person who is the tenant doesn’t have the same kind of security they have when they’re renting a unit in a rental building,” said Davis. “In a rental building, they have certain protections from the Landlord and Tenant Act that someone doesn’t have who is renting from a condo owner.”
Councillor Greg Martin then said that tenants have rights no matter if they rent from a purpose-built rental unit or rented out condo units, and that they still have the opportunity to make an application to a tribunal of the landlord isn’t doing something correctly.
He said that condo conversions are happening with older buildings because of a two-tier system for landlords.
“If your building is a certain age, you’re covered under rent controls and you’re limited to one or two per cent a year …and for any buildings that are newer, they can charge whatever they want for the rent because the government’s realized that rent controls don’t work,” he said. “But instead of taking them [rent control] off completely, they only took it off for buildings going forward, which is perpetuating this two-tier system that was messing up our rental situation. That’s why developers started building condos instead of rentals, it was because of rent controls.”
Martin said that while he understands the logic behind the proposed policy, he didn’t think that it was beneficial for the community because “it’s ridiculous the way that the whole system is rigged and skews things towards newer buildings.”
Following Martin, Councillors Mandy Samwell and Michael Sullivan said they were both happy to support the condominium conversion policy.
“I think we’re looking at this from a rental stock [perspective] and obviously we have to, but I think we also need to look at this from the other perspective which is the price of housing now is ridiculous,” said Sullivan. “Most people when they’re buying their first home, they are looking at buying a condominium per se, and if we have a condo that’s got a lot of problems with it, that’s not what a first-time buyer needs when you’re using this as a stepping stone. I think this is a great idea to get the ball rolling.”
Councillor Brian Van Tilborg said that he applauded Davis and Carpenter for bringing the policy forward and that he looks forward to the Staff report when it comes to council in the third quarter of 2024.
Davis later clarified what he meant when he said that those who are renting condo units don’t have the same security as those in a rental building.
“A [individual] owner of a rental unit, if they need it for their own purposes, they have a right to terminate the lease. If you’re renting in a rental building and the owner of the building is a corporation, they can’t use that method for eviction, but if you’re renting from an individual who buy condos as investments, they’re individuals,” he said. “If you’re renting from that person, and if a member of their immediate family wants to move in, you get evicted. …So that’s why if you’re looking at providing secure rental agreements or arrangements for individual residents, usually they’re better protected if they’re renting in a building from a corporate landlord and so that’s the problem with these conversions.”
Once again, he said that this policy isn’t meant to stop condo conversions from happening.
“We’re not looking to prohibit condo conversions,” said Davis. “What we’re doing is we’re asking Staff to recommend a policy to us that will protect those residents of older buildings that buy a condo, and also that if there are certain economic circumstances, we can discourage condominium conversions.”
Carpenter ended the conversation by reiterating what the mayor had to say.
“We’re trying to make sure that everyone’s rights are protected,” he said. “At the same time, our job is to protect the community as a whole, not just one group, but everybody.”
With a vote of 8-2, noting that Councillors Martin and Caputo voted against the resolution, the proposal was carried and will come to Council for final approval on Tuesday, April 30, 2024.
