Big Trouble for Low-Rise Housing in Waterloo

Do you rent a room in Waterloo? Do you care about how much you pay for rent? If so, this article directly applies to you.

The City of Waterloo has recently introduced a bill pertaining to how low-density housing is litigated. It applies to all rental properties not considered to be apartment buildings. This is the newest part of the City of Waterloo’s “Node and Corridor” development plan which hopes to see most university students segregated into high-density housing around Northdale which is between Lester and King, University and Columbia. The new by-law will be incredibly beneficial for high-rise landlords and developers by making it far more financially difficult to rent low-rise housing and simultaneously forcing more students to move to high-rises.

One major change is that low-rise housing in Waterloo would be limited to three bedrooms per unit. The city justifies this with some polls where they contacted families to see how many children they have and established that the average family has 3.0 people. Apparently this is a valid reason for a 3-bedroom per unit cap. What it doesn’t say is that students do not fit in their data. Their other justification is that it would protect the human rights of the occupants to see them living it better conditions. The reality is that it would make more students move to small high-density housing units that are not affected by this possible law. The three-bedroom limit would come into effect immediately for all houses sold after the law gets ratified (set for July 1st, 2011). This will also deflate housing prices in Waterloo since many houses will become unprofitable as rental units which make up a large part of the housing market in the city. This deflation will be most notably beneficial for high-rise developers who will readily buy these houses, tear them down and convert them into apartments.

The second cost incurred by landlords is the necessity of having plans made up for floor plans, parking plans including location and dimensions of the spot and snow removal plans. I’m sure many of you have worked for consulting firms and know how much they bill out for, it’s significant. The floor plans must indicate dimensions of the kitchen area, living room area, dining room, and bedroom areas. All these areas will now have a mandated minimum square footage which will require renovation for many units. This seems beneficial but it’s important to realize that any cost needed to make these renovations will be directly reflected in rental costs. If people want to rent a small place with no dining room for cheap why should that be disallowed?

The license itself also has a yearly cost. The cost ranges for different types of units but it will be approximately $500 per year for most units. This will translate directly to $15 per month added cost per room for a 3 bedroom unit.

The total cost associated with this law will vary greatly from unit to unit but let’s try to do some estimations. The total added rental costs to students will depend on economics as well as just the added cost to landlords. In an attempt to estimate what we will see at the end of the day lets say that the cost of renovations will vary from $0-$30,000 for a unit that needs to have walls added or moved etc. Having the floor plans, parking plan and maintenance plan professionally done with dimensions will probably take 10-15 man-hours at around $100 per hour. That will add a cost of $1000-1500 per unit. The license will cost approximately $500 per year. Spreading out the cost over ten years for a three bedroom unit the by-law will add a cost of approximately $20-$100 per month per rented bedroom. The economics will come into play as well. Many units will just not be financial feasible to renovate and thus there will be fewer rooms on the market driving up prices. Apartment landlords whose units are not covered under this law will also raise prices a similar amount to reflect this change in the market.

The fines and penalties associated with this by-law are also significant. The by-law outlines that inspections will be carried out to an unspecified degree by city staff to ensure units are in accordance with the law. Fines could run anywhere from $350-$50,000 for a first offense and over $100,000 for a second offence. This will mitigate the number of landlords wishing to circumvent the license.

This law is the newest attempt by the city to keep the economic benefit of having one third (~40,000) of its citizens as students without tarnishing the “wholesome character” of its neighbourhoods with students. It will see all students paying anywhere from $20-$100+ more per month for any living accommodation (both apartment and low-rise) in the near future. It simultaneously forces most students to live in apartments which are not covered by this law and thus will have no positive benefit for student “human rights”. The city’s justifications for the law only include valid reasons for families and completely discount the needs of students which make up around a third of city residents and the majority of the rental population. It is very clear that while formulating the proposed bylaw the city tip-toed around the fact that they are utterly screwing over students as their needs and values are not discussed in the report. If ratified, the changes will come into effect July 1st, 2011. If you wish to do something about the law contact ward councilors to vote against it and/or visit the open houses: January 20th and 20th at the Waterloo Memorial Rec. Complex (http://www.city.waterloo.on.ca/DesktopDefault.aspx?tabid=2227 or use “the google” for more info). If students take an active role and fight against this proposal they can make a difference.