Raise the Hammer

The city should be coming up with creative solutions to the problem of "illegal multi unit dwellings".

In short, the problem needs to be reframed: it is not their illegality under land-use bylaws that is a problem. The major problem is that some of these units are absolutely unsafe. Another (comparatively minor) problem is that the city is not realizing the correct property tax income for undeclared multi unit dwellings.

Rather than calling them illegal purely because of planning laws, new and existing properties should be evaluated based on safety. A new mantra could be to enforce the fire code and ignore the parking bylaw.

My proposal:

Offer a voluntary reporting program with incentives to participate. For instance, a landlord or homeowner can report that they own a single family zoned property that is being used as a multi family. The city will send an inspector for an evaluation of what needs to be done to bring the property up to minimum safety standards. The city then offers a grant for part of the upgrades and a low interest loan to cover any costs that go beyond the grant. After a follow up inspection, the grant/loan money is given to the land owner. The city then adds a loan payment to the property taxes. Once the loan is paid, the property tax gets re-adjusted to reflect that the home is now multi family.

This could be similar to how the lead pipe replacement program works (the city puts the cash up front and repayment is added to the tax bill).

Along the same lines as the lead pipe program, this would be an investment in the health and safety of our citizens - especially those on a fixed income who need cheap accommodations and tend to be an under-represented voice.

One long term benefit to the city is that the property taxes paid on these properties will rise to reflect the actual land use.

Another benefit is that the city's true density numbers get reported to the province, helping to ease the burden on building new units to achieve the minimum density requirements set forth by the province.

Comment edited by seancb on 2011-04-26 10:59:39

I largely agree with seancb; the city's by-laws regarding these such units are very discouraging. It's not just zoning by-laws; there are others such as, "your emergency fire escape can't be seen from the street". Silly stuff, really. These bylaws should be pared down to those that address simply safety, without going into the absurd. Really, if it's good enough for a standard, single family house, it should be good enough for a house split into a couple of units (with a couple of small changes, like interconnected fire alarms).

Where I don't agree is related to the taxes. I simply don't agree with the rate at which multi-unit dwellings are taxed. A split house often contains no more persons than would a single-family home, and requires little to no more resources from the city. While I could understand a slight increase in tax, the current increase is far too high. For example, Hamilton's tax rate on a single-family home is 1.54%. On a multi-unit, it is 3.8%. Understandable if we're talking 5+ stories, but for a single-family home that's been split into two? Ridiculous. It's no surprise that, despite being up to safety codes, many of these units remain undeclared, simply for tax reasons.

Comment edited by jonathan on 2011-04-26 12:04:36

As a rental property investor who both owns/has owned and lives in downtown Hamilton, I have a few points to make.

Chopping up and old Victorian into multiple units is the only way for investor to make cash in the core; a single family home in downtown Hamilton will never bring in enough rent to cover costs. Therefore the owner is losing money. The profit on most multi-unit dwellings can be pretty good, other things notwithstanding....

And now to those other things...
The people who rent single floor units most of these old places are overwhelmingly on social assistance. I know this, because I have had many tenants in the area who are this way. And most who apply are on social assistance. All I know is the net effect of this, not the cause.... just the net. And the net effect is people who are on social assistance tend to do more damage to a rental unit than those who work regularly. I have many places and let me tell you from experience; I have spent far more in repairs for units rented out to people on social assistance as opposed to those who work. What most seem to forget is what makes up an "expense". All the garbage that is left in the unit after they leave has to be removed, and that costs money. Same with cleaning the place. Not free either. In my experience, renters who work leave less garbage/belongings/mess than those who are on assistance. This has been my experience in the core over the last 5 years. Perhaps other landlords in downtown Hamilton have differing experiences? So yes, you make more revenue on multi-unit dwellings, but you also have more expenses as well. NO NET CHANGE.

Now, those who work regularly, often don't need to rent a single floor unit in a house; they can afford a better place/house/ownership. See where this is going? So the pool of renters is mostly made up of people on assistance.

So, based on my previous experience, most of the people who rent in these areas are going to cost you more money than you bargained for. That is the net effect.

It doesn't help that Hamilton's property tax is beyond ridiculous (I wonder why it's so high? Anyone?).

Any other investment property owners care to share their thoughts/experiences?

I should have mentioned, I too am a split property owner...and have not made it legal due to the taxes. Though I do live in it as well. Everything's up to code; it's even insured as a multi-unit. It's just not legal, in the eyes of the City.

And yes, Jason, my brief experience has been similar to yours. However, those on social assistance can be counted on for longer-term rentals than those just 'passing through' on their way to home ownership.

Regarding the taxes...

Let's take the example above. Purchase a home for $179,000. The author's downpayment seems high to me, but we'll roll with it. So, that's $700/month for the mortgage, say $175 average per month for basic utilities, $100 per month for insurance, and, for a single-family home, $225/month for taxes. Total monthly bill would be $1200. He's losing $300/month at the specified rental rate.

Now, let's split the home. For this study, we'll assume that utilities and insurance each goes up $25/month per unit.

Split once (the most common split), at the current multi-unit tax rate, he'd need to make $1600/month to break even. Good luck getting $800/month per unit. Keep the taxes the same, and we're down to $1250/month. Far more reasonable; $625/month for a split $180,000 home is a fair price, even a little low. But we haven't factored any maintenance into this, so seeking $750/month would certainly not be unreasonable.

At three units, it becomes a little more reasonable, requiring $550/month average per unit to make expenses. Still a little steep, as we're talking about a $180,000 home split three ways...but he might make it. Bring the taxes down, and he needs ~ $450/month to break even. This is actually doable, and he'd even have enough left over to maintain the place.

Four units, and he still needs to make $425/month to break even. But on a $180,000 home, we're looking at 'rooms for rent', not units. Nope, not breaking even here...

No, in order for someone to actually break even, based on the current tax rates, he'd have to let out five of the rooms at $400/month. At that rate, he'd be able to pay all his expenses, maintain the place, and even come out a little ahead. Which, after all, would have been the goal all along; no-one goes into housing looking to 'break even'.

I can see where the thought of long-term tenants (the DREAM!) coming from those on social assistance comes from, but in my experience, most seem to take off at the first sign of something not going their way (missed rent/disagreement with owner/domestic problem). I have had some that are long-term, but most were not for me.

I agree with the assessment of your numbers. The taxes are outta whack and it's tough for owners to meet all the demands/red tape of the city as far as being legal is concerned. More units = better chance of breaking even.

I will say that since I've got a property manager to look after my investments, things have become much easier.

• the need is there for multi-unit properties and conscientious landlords to create smaller units for progressive change.

I agree with both @seancb,@jonathon and @Ryan B. I also look at my street and see two and three unit homes, in very poor shape. Rent is really low which I don't have a problem with, but then you have those struggling to survive, living in a house that is struggling to stand on it's own footings. Just because they are lower income, doesn't mean they should be subjected to living in a dump.

I have no problem with what this writer nad fellow ward resident discusses above and I embrace all ideas put forth in the article and the comments, but if you do not plan on rolling any of what you are making off the property back into the house, get out of the renting business. We don't want you in our neighborhoods.

I lived in a beautiful old home on St. Clair Ave and once it was sold to a woman in Mississauga who was not handy and knew little about rental properties, I only met her once in the remaining year I lived there. The toilet kept backing up, the yard looked like a jungle and I wasn't buying a lawnmower for a place I was renting, and many other things made it for a frustrating year of existance there. The weekend I moved, I actualy borrowed my parents lawnmower and cleaned up the yard and had a big barbecue. I finally got to enjoy the yard. If I knew I was gonig to be moving from there into my own house, I probably would have bought my own lanwmower but instead the exterior of the house becamse an eye-sore for what was a beautiful, friendly neighborhood ruined by unkept rental properties closer to King and Main.

This woman obviously was told the rental property business was a good investment in Hamilton because house prices were so low. Can we not have a course or something that potential multi-unit owners have to take to show they are certified and know the laws surrounding rental properties? An association that they need to belong to?

These types of rental units ruin a street. Sure, low rent can attract some questionable tennants, but if the house is kept in really nice condition and owners must either be local, or managed by a local multi-unit management group, than the bad tennants can be kept an eye on.

What if the front of the house has to have a sign with the number for the owner / management group so neighbors can complain about these tennants/condition of property, etc? It would show that these owners want to be a positive, contributing member of their communities. Nothing wrong with wanting to make money, but remember that there are 5 families next to and directly across from your 'business', that are immediately affected by what goes on at your 'money-making' venture. I actually wouldn't mind a sign that states that this house is a 5 unit home, or something to that affect. Shouldn't home-owners know or potential home-owners, what makes up these neighborhoods?

Then of course you have the developer who buys a property to build a new house and thinks he is doing such a service to your neighborhood (said so himself), by taking over a decrepid property and building a new home, only to have it unsafe during the build, always covered in garbage, and eventually shut down for not following building codes, and has been boarded up for over a year now.

A whole different story I know, but bottom line home/business/land owner accountability is very lacking in this city. I love Hamilton and my Ward specifically, but this article really hits on something we seriously need to address in our city.

Comment edited by lawrence on 2011-04-26 12:33:57

Very good points, Lawrence. I like the one about the association/course to take for future property owners. Most have NO CLUE what goes into it. And of course there are those who do not own anything, yet think that we, as owners, should just "throw more money into it, because you're all rich". There needs to be education all the way around.

And you're right; money must go back into the property. You don't buy a house to live in and expect to never have maintenance issues... same with a rental property. It's something that will make more for you in the long run the more you put into it (for the most part). The nicer/well maintained a house is, the more people want to live there. Period.

If this city was desirable to more people, then we would not have as much of a problem as people would be buying up these properties to live in and not rent out. Then the landlords would be a select fewer who really know their trade. But until people really desire to live in the downtown core, we'll always have this issue (I think).

What if the front of the house has to have a sign with the number for the owner / management group so neighbors can complain about these tennants/condition of property, etc? It would show that these owners want to be a positive, contributing member of their communities. Nothing wrong with wanting to make money, but remember that there are 5 families next to and directly across from your 'business', that are immediately affected by what goes on at your 'money-making' venture. I actually wouldn't mind a sign that states that this house is a 5 unit home, or something to that affect. Shouldn't home-owners know or potential home-owners, what makes up these neighborhoods?

As a tenant, I refused to even look at properties that I knew were managed by third-party rental companies. A lot of them aren't very good (and are used to treating tenants with suspicion) and I don't want visitors to see a sign on the property instead of a normal front entrance, even though there's obviously multiple units on my side of the building. I understand the need for some kind of way to find out (perhaps a map online) but to me as soon as I see that kind of sign I go "potential problems here!"

Funny thing though - my landlord only rents to employed people, because although it takes longer and is more frustrating, everyone keeps the units in better shape.

However, my family in St. Catharines used to rent - now they own, and inherited a rental property after my grandfather passed away. One of their tenants is on assistance and has been there for almost twenty years, keeping the place in good shape. Finding a consistent tenant for the other side has been the problem - and they've tried renting to a lot of different people. (I keep telling them to get credit checks and references and the parents' information if they try renting to students... it would help weed out potential problems earlier.)

Accountability based on safety, and making taxes more realistic, would make a lot more sense. I don't have a problem with the idea of a multi-unit conversion - I live in one and it's excellent. All units are 850-1300 sq. ft and spacious, and I have a landlord whose son lives on the property and attends to any issues promptly. Some other ones on my street are pretty good, but the next street over many aren't.

Especially along the major one-way streets just east of downtown like Main, Wellington, Victoria, etc. No one is going to fix up the 3000 sq. ft. homes for a single family and then have their kids living right on a highway. But, convert it into 4+ 750 sq. ft. units... then you've got something.

Comment edited by Meredith on 2011-04-26 12:49:42

As a tenant, I refused to even look at properties that I knew were managed by third-party rental companies. A lot of them aren't very good (and are used to treating tenants with suspicion) and I don't want visitors to see a sign on the property instead of a normal front entrance, even though there's obviously multiple units on my side of the building. I understand the need for some kind of way to find out (perhaps a map online) but to me as soon as I see that kind of sign I go "potential problems here!"

Makes sense, Meridith. Online if nothing else. Something I think a Real Estate agent would be encouraged to share with potential home owners. IF they want repeat business, anything they can do to ensure a home owner is happy with their purchase I think would bode well for them.

Subsequently, a welcome package for every new home owner form their councillor or ward residents association perhaps, would be a nice touch.

• Welcome to the neighborhood. Here are some numbers and websites that you should be made aware of. Now what's going on in your neighborhood, and what all makes up your neighborhood.

That sort of thing, but it should be readily available and commonly shared knowledge.

The only argument that I have is that only availalbe 'online' is not neccesarily acceptable - yet. Many from the older generation simply do not know their way around a computer and I am not totally sold that they should have to buy into this 'information age'.

WOW - let's create a cleaner ghetto for the less fortunate. Give me a break, people get into the rental busines to make money, not to provide affordable, dignified housing for the social assistance recipients. Here's a thought - leave them as single family homes. Why do they have to be carved up into rental units to begin with? An older home in the central city, left as a single family unit is affordable to purchase.
You can all speak completely for yourselves but as a 30 year resident of Ward 3 I am SICK AND TIRED of people that live in Ancaster, on the Mountain or in Stoney Creek buying up single family homes on my street and turning them into rental units. Go carve up your 3,000 square foot home in Ancaster and rent it out into 7 different units. Better yet, talk to the home owners that live around Mohawk College and have to deal with what used to be a 3 bedroom bungalow being converted into a 7 bedroom rooming house.

Andrea, your comment is unnecessarily accusatory and not at all constructive.

We are a young couple who moved to a solid brick home in the core a few years ago. The two of us collectively work five jobs, all part time (because that's the way things are these days). We also spend much of our free time getting our hands dirty volunteering with many groups and events throughout the year,both within the immediate neighbourhood and in the city-at-large.

We are an asset to the city and to the neighbourhood, and the work that we have done on our home has improved not only our own property value but that of our neighbours.

We renovated and now rent out the second floor of our home as an apartment. This secondary income is part of what makes it possible for us to afford the house - and especially the upkeep/upgrades which benefit our neighbours as much as they do us. By extension, that rental unit also enables us to give back to the community through our volunteer work which we only have time for because of our flexible work schedules.

If we had to work full time jobs just to make ends meet, our property condition would be stagnant and our ability to spend time giving back to the community would be negligible.

Additionally, we rent below market rate and only to people whom we know either directly or indirectly through the network of friends and acquaintances we've built through work, play and community involvement. In other words, our tenants are a positive part of the community as well.

It sounds like you have been bitten too many times by absentee landlords, but your wide brush is insulting to those of us who DO want to provide quality units to those who need them, in order to better their lives as well as better our own property and the community it is part of.

Kudos to you. I wish I had more neighbours like you. Keep in mind you are the exception, not the norm and an asset to your community. I don't have a problem with onsite landlords, in fact I would love to see more of it, but it's not reality.

If you think I came across as negative, then may I be so bold as to suggest you sound a tad bit preachy? Typical of this site, if you disagree you get labelled as unconstructive. My comment is just a releveant as any of the others on this site, and admittedly it is purely subjective; as is your personal story and the experiences of the other posters regarding this topic. You said yourself that you moved into the core 'a few years' ago..if you stay you will experience the cyclical nature of rental properties vs. family homes.

Comment edited by Andrea on 2011-04-26 14:59:09

I had some friends who lived in a divided old Ward 3 house last year. Spent many hours at the Landlord Tenant Board with them. The landlord was around almost daily (always requesting to enter) and nothing ever got fixed. The superintendent was a crackhead who eventually had to be fired because of all the screaming and police visits. The house was in awful shape and the work was well below substandard. Suffice it to say, we won money several times. But ultimately, other than a few months rent back, there was no lasting penalty against the owner - he just gets to do it again with new tenants. Much like the situation with the toxic barrels - residents can be evicted, poisoned, or threatened - property owners can at most face light fines.

I have sympathy for anyone crippled by government regulations, but the point of investing is to put money into things. There's a really popular myth these days that you can get into the housing market and the profits will roll in without you ever having to spend a dime of your own money. Some of us actually have to pay for our homes, and we only get to live in them, not profit from them.

I gotta say, I agree with you Andrea. I wish those ppl in Ancaster would carve up their own neighborhood into rental units instead of ours. See how they like it...

I'd love nothing more than for my neighborhood to be all single family homes; that's what I'm in the process of doing right now iwth my house (4 units slowly turning back into 1).

Even though I'm a landlord, I'd give it all up to have downtown Hamilton be back to single family homes like it was back in the day.

Last time I checked, the point of investing was to make money, not lose it.

Maybe an incentive program would be restricted to properties whose owners live on the premises and with a maximum number of units for a given square footage... At any rate, my brainstorm idea is in regards to existing multi family conversions - to encourage making them higher quality and safer accommodations - not to encourage further dissection of single family homes into dumpy flop houses.

However I do think that higher density and multi family dwellings are products of (and catalysts for) healthier cities, provided the apartments and dwellings are well kept and safe so we should not be scared to allow future conversions.

Absentee landlord-ism is a huge problem no matter what the scale of property - whether it's a modest duplex or the Connaught or Federal building - and we need a bylaw system that addresses this while still making it a reasonable proposition for good landlords and property owners to create high quality legal apartments.

let's create a cleaner ghetto for the less fortunate

But I don't think that is what this kind of thinking would create. If you look back at this piece, the article and comments are great examples of why people love these types of neighborhoods. They are all-inclusive. If an entire neighborhood is made up of low rent, absentee landlord housing than I agree and that should come to a stop immediately, but if our streets are a mix of housing types, I think it all comes together to make a very welcoming living experience.

You have certainly seen more in your 30 years than I have in the 10 years I have lived in Ward 3 and the time I spent there as a child, but this article and the comments within seem to pose some great solutions to the problems you face. Absentee landlords need to go. If you have an accountable owner who pays careful attention to how the tennants are treating their property and the neighbors, I would think a lot of your troubles if not all if this was heavily enforced, will go away.

I'm not trying to perpetuate the great suburb/City divide. But sometimes I feel like Clint Eastwood in Gran Torino. LOL

As a homeowner in Ward 3, and as someone who is woefully aware of the landlord and tenant laws in Ontario, neither the government of Ontario nor the City of Hamilton could offer me enough money to convert my home into several units. Not because I am opposed to offering cheap housing to those who need it, but because I oppose being financially destroyed by bad tenants that have the green light to do so by the Landlord and Tenant Board and the Residential Tenancies Act.

Landlord-Hopefuls beware, do NOT invest in residential housing in Ontario. Not until the RTA is brought up to equality for the small landlord. Those like me who would like to have some extra income by renovating to add a second or third unit to their SFH would soon find out that the nightmare tenant that they unknowingly rented to has more rights as an occupier than you do as an owner. It would soon become apparent how uncollectible those tenants on social assistance are. You could very easily become a hostage in your own home. You very well may end up paying for your tenant's stay while they skip out on rent and abuse the process at the LTB with delay after delay - even after you've received an eviction order!

Furthermore, you cannot "discriminate" on the basis of whether or not your prospective tenant can even afford the rent based on their income. Credit checks only tell you so much, and you could be accused of discrimination if you refused to rent to someone with a bad credit rating or none at all. Don't believe me? Visit "www.ontariolandlord.ca" and hear the horror stories from small landlords all over Ontario. No, this isn't a plug for the site that I only visit and am not affiliated with. This is an attempt to shed light on how bad it is in Ontario for residential Landlords.

If you want someone to blame for the mess we are in regarding a lack of affordable housing, blame the tenant activists and Liberal provincial government who made the business of being a residential landlord in Ontario COST (and RISK) PROHIBITIVE.

A few things.
1. Taxes. seancb and jonathan, you are both wrong if you think converting a house into a duplex (or tri-plex) will significantly increase taxes. MPAC considers a "multi-unit" property to be 7, or more units, http://www.mpac.ca/pages_english/residential_data_definitions/print_abutment_proximity_variables.asp

That means your house with 2 units (or 6 units for that matter) will be taxed at a residential rate, not multi-unit. Legalizing all these illegal multi-unit homes will not result in a tax windfall for The City of Hamilton. If you want a tax windfall then close all the illegal ones down and incent new apartment building with 7, or more units, to absorb the tenants.

2. Multi-unit homes are a contributing factor to the closure of schools in the innercity. You can't raise a family in a basement bachelor, first floor one bedroom, or 1/2 storey bachelor. And many families don't want to live in neighbourhoods with a transient population.

3. Most of the older homes in Ward 3 are not 3,000sq ft. The large majority are sub-2,000sq. ft or perhaps slightly larger if an addition has been added, and those additions have usually been done without a building permit. 4, 5, or 6 units in these homes are essentially human kennels.

4. The old homes should be intensified to only 2, or in the case of larger homes 3 (and those are the exception). Anything more than that is not in keeping with building healthy neighbourhoods.

5. Having absentee landlords adhere to rules is akin to herding cats. Ask Terry Whitehead how his drive to license landlords is coming along...

6. Allowing illegally converted homes to become "legal" is wrong, and incenting them is totally wrong. If they want to legally convert they should have to start from a position of being legal. That's what "law abiding" citizens do.

>> Allowing illegally converted homes to become "legal" is wrong

I understand what your saying but I don't think I agree with you here. Alot of places are illegal because the city makes it basically impossible to do it legally. I think it would be a good idea to have some kind of general amnesty on properties if the rules focus on what really matters (safety) and stop stupid stuff like cash-in-lieu-of-parklands fees.

You speak the truth, Micky. I've gone through some horror stories myself and you're right; the tenants have WAY MORE rights than the landlord. It's really quite disgusting.

It's these activists that are making it so difficult for anyone to have a even playing field when entering this industry. All the rights are with the tenants and if you save ANYTHING to the contrary, then you're a "capitalist pig" whose "against the poor"... such a joke.

I've had many tenants basically "live for free" because they refuse to pay, then clog up the system. And I can't get them out until it's official... but guess how long that takes? All the while they're living for free and I'm losing my shirt. How fair is that?

Tell you what... any independent politician willing to include an overhauling of the LTB and make it more fair FOR BOTH PARTIES in his/her platform,... well... you'll have my vote, forever.

I've lived in the city, Ward 3, as long as you have. I get what you are talking about, but let me assure you that Ancaster, StoneyCreek, et al are not glorious utopias. They are disconnected, lifeless, corporate places that you have to drive miles to get from one spot to the next. Are you implying that a concerned person can't make money, improve life for others without being a soulless slumlord?

I have 12 apartments all in Ward 3. I have been renting out units for 11 years. I can absolutely share your frustration over people of social assistance. Though to be clear, I have found the bigger issue is for people on Ontario Works (welfare) vs people on ODSP. Out of my 12 tenants, I have several on ODSP and they are the best bunch I have ever had. The ODSP tenants are ones who rented an apartment first and I've has all of them for years. They are neat and clean and very responsible.

That said an ancedotal evidence doesn't a trend make. I'm sure we can all bring up personal issues to prove points. I think a wide range of data is needed.

Comment edited by TnT on 2011-04-26 17:12:28

I have half of my units managed by a property manger as well now. My real estate agent. It cost me one months rent every year, but the collection is the biggest part. The other half I manage myself, mostly the long term ODSP ones.

There is a reason that the city has standards for converting older single family dwellings into multi unit residential income properties. Its because most of the time the people that purchase these properties with the intent of becoming real estate tycoons have no frigging clue of what they are doing and their prime motivation is profit, not providing adequate housing to anyone.

I live in Ward 3, in maybe one of the poorest median income neighbourhoods in Canada. Originally it was not by choice. Three years in family court pursuing a custody fight consumed my life savings, created a mountain of debt, and put me in a situation where I was not able to be fussy where I purchased a home.

Thats said, right now I wouldn't move if I could. My street is quiet, there are no problems, most of the homes in the area are owned by people who have lived here for years with a few exceptions. One of those exceptions is the shit hole beside me. It is owned by a 30 something son of an immigrant from east asia who would make the worst dirt bags in Slum Dog Millionaire look like a great guy. His prime motivation is greed. He lives in Satellite City in Stoney Creek in the typical center hall 4 bedroom with the 3 car garage. He owns 8 rental properties in the lower city. Every single one of them is a bed bug infested rat hole bordering on condemnable. I have reasoned with him, pleaded with him, and outlined strategies whereby he could actually make this property more profitable by actually giving tenants a nice place to live. We are walking distance to the General Hospital and the new $178 million rehabilitation center. There are employed people who work there who would love to live within walking distance of work.

I have instead been left with the strategy of putting property standards, by law enforcement and the police on speed dial. I will if I have to, cost this doosh bag as much money as I can until he "gets it".

As a contractor, I have on numerous occasions turned down work from similar "entrepreneurs" who have wanted me to invariably "half ass" something so they could turn around a rat trap, fire trap, shit hole as fast as possible so as not to interupt their cash flow.

The principle of this article sounds like a noble one. It is however largely a work of fiction. Unfortunately the vast majority of income properties in Ward 3 at least are owned by suburban elitist faux "investors" whose only motivation is padding their bank account and maintaining their consumption based life style.

As a resident of Ward 3, a renovation specialist who works almost entirely in the old city and works on century homes, I have some advice for any of you who might be looking to "invest" down in "The Hood".

1. Never buy and rent out a place that you wouldn't be willing to live in yourself.

2. If you give people a shit hole to live in..... you are going to get shit hole tenants.

3. If you can't afford to purchase a prospective income property, convert it legally, maintain it, and pay the property taxes on a properly assessed income property..... YOU PROBABLY CAN'T AFFORD IT PERIOD. Buy RRSPs instead.

4. Don't pretend to have philanthropic intentions when you pursue something like this as a business enterprise. There is nothing wrong with making money. I am an avowed capitalist, and love making money. But if you can't do it ethically, responsibly, and honestly.....PISS OFF. We don't need your bull shyte or your money down here.

5. There are plenty of century cottages, story and a half single family homes that can be purchased, renovated, assessed, insured and rented (as single family dwellings) for between $900-$1300 a month. Again if you cannot manage this and still make money..... you shouldn't be in this business. Quit watching HGTV and getting ideas about being a real estate tycoon.

6. Real estate is a long term investment, unless you have a lot of capital and know the market, can turn around a property quickly, YOU ARE NOT GOING TO GET RICH FAST, particularly in the Hamilton market.

Your comments are very respectful and your points are as valid as anyones. I obviously don't agree with the thrust of your points, but that is the reason we have these discussions. I think it is great that you have posted this, because I feel yours is the prevailing attitude in the ward (and probably a good reason Bernie Morelli is re-elected 6 times) and that is what we need to get away from.

A great model of us is Back-Of-The-Yards in Chicago that rejuvenated in this fashion. By morphing the downtown into single family homes, it will drastically reduce density and wither the up and coming creative change.

Allowing illegally converted homes to become "legal" is wrong ...

Sure so was expropriating land to widen residential streets into one way highways .. Fix that and perhaps the 'ghetto' will fix itself ...

But low density 'ghettos' like ward 3 are far healthier than high density ghettos ( like Jane / Finch in toronto) There is plenty of 'good' stuff happening in ward 3 ... plenty of good people as well, its just not noticed as people speed past between Dundas and Stoney Creek.

I think those dreams of the down town suburb like the good ole days are long gone. "Everyone wants a front yard and backyard" quote from Bill Kelly is what is causing major environmental and social harm to our society. We need to be near things, walkable and connected. Not reinvented into a dream that never existed.

"If you think I came across as negative, then may I be so bold as to suggest you sound a tad bit preachy? Typical of this site, if you disagree you get labelled as unconstructive."

sorry if you found my post preachy, but I don't think it is any less preachy than you saying that there is no need for smaller apartments and that all houses should stay single-family because they are affordable. Affordable to some but not to all. There will always be a market for quality rentals.

These single family homes were built back when families were huge - two adults plus an older grandparent or two and 4, 5, 6, 7, 8 kids... it seems to me that with today's smaller family sizes, it is totally appropriate to convert these houses into two or three units of one or two people each.

Your message should be spoken to absentee landlords who live in ancaster ---or further. But you've come to a forum frequented largely by urban dwellers so your words are not reaching the audience they should. I don't think you should be surprised that many people who read this site are interested in dense urban growth so I don't think you have to take the disagreement personally.

you speak of 3000 sq ft houses being divided into 7 units - I know you are exaggerating for effect but just as I may be an exception to the rule, so is the carving of the magnitude that you state. The truthful average lies somewhere in between.

You ask "Why do they have to be carved up into rental units to begin with?"

Because we are being mandated by the province to meet certain intensification goals - and it is for our own good to comply. Healthy cities are dense cities and unfortunately in Hamilton, the line up of developers willing to build large multi unit complexes is very short.

I also believe that more small scale intensification (2, 3, 4 unit houses and low rise apartments) are a more sustainable way to increase density than building huge apartment complexes. But I admit I am biased because I look at it from an angle that I personally find it more pleasant to live in a converted home than an apartment with an elevator.

And on top of this, many of them are already carved up - so shouldn't we be coming up with a way to make the existing properties safe and clean? I don't know what the answer is, but trying to eliminate multi family conversions doesn't seem like the right one to me. And in the long run, we should create a logical, easy to understand, and easy to execute path to creating more duplexes where the infrastructure can support it. We HAVE to intensify somewhere and I'd rather see a block of singles turned into duplexes than a block razed for a crappy apartment building with a surface parking lot (required because our city's parking requirements are arcane beyond belief)

many of toronto's most vibrant neighbourhoods have many many 3 and 4 unit conversions and the same can be said about any successful city!! These neighbourhoods are not simply clean ghettos, they are successful neighbourhoods

@Undustrial. I have enjoyed your comments on this site very much over the years, and I sense that you are a great advocate for urban renewal. I would argue that you, much like RyanB from the opposite perspective, are only seeing the worst of the lot. I think that the laws are harsh in the wrong application. Just a cursory reading of the RTA shows quite a bit of bias in the favour of tenants over owners.

"many of toronto's most vibrant neighbourhoods have many many 3 and 4 unit conversions and the same can be said about any successful city!! These neighbourhoods are not simply clean ghettos, they are successful neighbourhoods"

You're absolutely right. But I think that what you will find in a very large percentage of these properties is that the OWNER actually lives in one of the units. That is not happening in Ward 3 on a large scale as of yet.

This has recently come to light with the city council fighting against a proposed renovation to a detox center on Emerald St South.

Well, the suburbs keep talking about how they want more services for their tax dollars, we could offer them some of those. How would a halfway house look at Wilson and Rousseaux?

Ick, I would hate to see what happens to some idiot who watched too much TLC 4 years ago and tries to pull one of those housing-boom flips on a century home in ward 3.

"Because we are being mandated by the province to meet certain intensification goals - and it is for our own good to comply. Healthy cities are dense cities and unfortunately in Hamilton, the line up of developers willing to build large multi unit complexes is very short."

This might be the case. But that should not be taken as a cue for a free for all to cram as many units as possible into existing homes. They may have had large families, but they also usually had one bathroom, one car, one kitchen, etc. This should also not be used as an excuse to "grandfather" current substandard conversions. With respect to developer led multi unit projects, the trend is changing. Spallaci alone has done 3 projects in recent years representing over 100 units.

Hamilton, along with of course Toronto represent the two oldest urban environments in the province. The intensification goals referred to are province wide, not specifically directed at this city. Lower Hamilton, with its current density is near the targets set by the province. What we need is new development of condominiums on the numerous and illegal surface parking lots in the downtown core, not increased slip shod, substandard duplexes and triplexes shoe horned into neighbour hoods that neither want them or can support them. Further the intensification goals also refer to new construction and are intended to reverse the trend of "suburban style" developments with 50 and 60 ft wide lots, with 3 car garages and 75 foot long driveways. There is no reason a new development in Ancaster or Dundas can't be built more intense with narrower lots, alleys, and constructed with a mix of residential and commercial/retail uses so that people can actually walk somewhere to conduct their daily business.

1. Hmmm...interesting. I wasn't aware of the minimum classification on multi-residential, and was led to believe otherwise. This...changes things. The house I own happens to already be zoned in my favor...and the grandfather clause on a few things exempts me from some of the more absurd requirements (I didn't convert it; judging by some of the evidence I've found in my renovations, I'd date the conversion to the late 70's).

2. I...would have to disagree with you there. The leading cause of the closure of schools has much more to do with finances than attendance. With the numerous additional programs added to what once was a basic education, the pooling of resources has become a requirement, and thus, the pooling of schools. I could spend a lot of time on modern education...but that would be getting side-tracked.

3-5. The only argument from me would be that without these types of 'human kennels', we'd end up with a lot more people on the street. Even ignoring the tax portion of my assesment above...no-one on social assistance could afford to rent a unit following your criteria above. I'm certainly not a fan of them, but they have their purposes. Students would be the other large factor. They really do have to live somewhere, and their income vs expenses puts them in the same financial category as those on welfare. Whether you have someone renting individual rooms to six strangers, or three students splitting the rent on a 1/2 house unit, you end up with the same thing.

1. Many, many people purchase houses with rental units only to find that these are 'illegal' (though that's not my defense; I went in eyes wide open...apparently a little too wide...) While offering them incentives may be going too far, offering assistance (legal, loans, even just a friendly face) would certainly be in the city's best interest. After all, the city's primary concern is (or should be) safety. Better to help them legalize their units and ensure everything's up to snuff than simply ignore the problem.

Hmmm...too late to go back and edit.

In that case, regarding the above...Landlorded below points out that the multi-unit tax rate applies to seven-plus units. My apologies...

Based on that info...it's still not worth renting out a single-family home. Only by splitting it does it work. Though, as some have pointed out further down...is that really a bad thing?

Shempatolla, I don't think anyone here is advocating the encouragement for people to "cram as many units as possible into existing homes", nor to create "slip shod, substandard duplexes and triplexes" nor to "grandfather current substandard conversions" as-is without improvements.

What some of us are saying is: 1. We need to create a process based on logic and safety for future conversions in order to reduce the instances of "cramming". 2. We need to eliminate the unnecessary road blocks that prevent landlords from doing proper conversions. 3. We need to come up with an approach that will encourage owners of existing substandard conversions to take initiative to bring their units up to a reasonable standard.

If we don't do something, we will just see more and more conversions meeting NO standard, and the current stock of crappy ones getting worse.

downtownlandlord, I can only assume you are commenting to me. No nwhere did I mention cutting a home into 7 units, 3,000sq ft or otherwise. But, I can show you some 6's in probably only 2,000sq ft.

I know many of those Toronto neighbourhoods where homes are split into multiple units, and comparing Hamilton to Toronto is an apples & oranges comparison. I'm not so naive to think they are all different, but the people in the Beaches, Danforth, Trinity Bellwoods, Annex, College Street, etc areas of Toronto living in multi-unit homes, aren't the same as the people living on Stinson, Delaware, Barnesdale, Gibson of Hamilton.

jonathan, Every time they close a school in Ward 3 they use declining enrollment as the reason to start the review. I'm confident money ties in closely, but if all the schools were at 80% or greater attendance we wouldn't be seeing them closing. You can read that even last week here; http://www.thespec.com/news/local/article/520128--school-board-recommends-closing-king-george

Rewarding people who break the law is wrong, period. What example does that set and where do you draw the line? Do you turn a blind eye to all those building permits not taken out? Do you ignore the plumbing and electrical inspections not completed? Can't do those properly after the construction is complete? Does everyone who paid for permits, paid for zoning, did things by the law learn they should have just cheated?

If so, I guess the you believe that good guys do finish last. Not a city, or society, I want to live in. I aspire to something greater.

Agreed.

The process is called ENFORCEMENT.

The reason we have the messes out there we do is because people get away with it and there is no consequence.

Honestly, I don't know how people get these rat traps insured.

I'm all for government getting out of the way of entrepreneurs. But I definitely want government IN THE WAY of slum lords. People like that ruin neighbour hoods. Period.

I would encourage anyone out there living near or beside or dealing with a substandar/illegal multi unit conversion to get on the city's website and use the remote reporting system. Complain every day if you have to. It works. Use it to make property standard complaints, fire risk complaints, undue noise complaints.

When these slum lords start having to open their wallets frequently..... maybe things will change.

Comment edited by Shempatolla on 2011-04-26 20:02:56

Why should 5+ stories pay 3.8%? I live in a high rise and per person there's a lot of city services that we use less of. This is just subsidizing single family homes at the expense of apartment dwellers. Regressive festival.

SO you are a big shot landlord making money on the back of the poor and turning my hood into a rooming house slum. Your motives are suspect.

I think it's a standard assumption that the city always makes things 'basically impossible' to do legally. Although I agree with this at times, I also feel that many people don't bother to really look into what they automatically perceive will be 'red tape'.

In terms of 1-to-2 family conversions -- most don't really require all that much under city by-laws. Additional rules (building/fire codes) already do focus on safety and are not particularly onerous. Also, cash-in-lieu of parkland fees don't apply in these situations.

I agree with you LandLorder, particularly in the second to last paragraph which talks about rewarding people breaking the law/inspections not completed, etc.

To re-quote the original article: "Landowners who try to convert these properties legally face a huge list of red tape, codes and time constraints. That is not to mention the costs. It is for this reason many of these conversions are illegal. Blame shouldn't be placed on the owners of these places for working outside the law." ...I completely disagree with this. As I mentioned in a post above, it's not always correct to automatically assume an inpenetrable wall of red tape but yes, there is a process one has to follow and yes, that does take time and money that may cut a bit into your investment. I do think blame should be placed on those working outside the law. For every investor like those in this forum that say they've tried to do things legally and been frustrated (which I partly sympathise with), there are probably 10 that never made more than a token effort to figure out the rules and ended up just goin' for it, or either really didn't give a damn about anything beyond profit in the first place.

Well said, Shempatolla, on all counts. I hope we get more contractors like you in this city! I particularly liked 'Don't pretend to have philanthropic intentions when you pursue something like this as a business enterprise' -- I've encountered absentee landlords acting like they're giving us Hamilton rubes a great lesson in urban renewal by buying some dump and doing sub-par renos so they can stick a few more rent-payers in. Thanks!

Also liked: 'I definitely want government IN THE WAY of slum lords' -- consequences for illegal/unsafe units really are a joke. We generally don't hear anything about this kind of stuff except for the semi-regular news reports of 'Fire broke out at a multi-unit residence, no working smoke detectors, X number of people injured/killed, owner being charged for fire code violations.'

I must say, though I come from a far different perspective than Shempatolla, I really wholeheartedly agree with most of his comments here. In theory the whole "investment property" thing sounds like a licence to print money. In practice, it just doesn't work like that.

If you just want to put your money somewhere to grow, try something nice and easy like mutual funds or bonds. The downside is that you might actually have to invest your own money instead of going looking for a no-down-payment loan and some quick and easy tenants. The upside is that you won't be stuck legally liable for somebody's accommodations when a few thousand in urgent repair bills show up unexpectedly. Being a landlord isn't easy, cheap, or a very good get-rich-quick scheme. Just ask any landlord on here. And if you screw up, people suffer. Just ask any tenant.

I think that is exactly the point. It is not about crazy money making. It is at it's core about creating affordable units for people. Shempolas comments are particularly worrying. Have a chat with the owners of the Pearl company, The Brain, or any other place trying to be progressive. To covert a property into more than one unit and get the zoning can cost in excess of 100,000 dollars. Do a quick inquiry at city hall.

You are painting with a very broad brush. I see where you are coming from, but it reeks of sour grapes. You were forced to live here, your neighbor is a slumlord ( and an non-white which you make veiled racist reference to) and you've been opposed to half done renos. What you are doing is a hatchet job. You are not being a realist, you are being negative and a downer.

Excellent points. This can be seen as a continuation of unique change of properties. The struggle for multi unit conversions is the same fight owners of unique commercial properties face. The point here is that enforcement and obstruction are done on an arbitrary level and only effect those trying to do it legally. I have read on this site of the tough work that people have had dealing with red tape.

@TNT, Another apples & oranges comparison.

The $100,000 faced by The Pearl Company is based on changing the zoning of the property, something the owners feel is not necessary for their current use, but something the city feels is necessary. I'm not familiar with The Brain situation as I haven't followed it in the paper, or online.

The difference is that you don't have to change zoning to convert a single home into 2 units. It will still be considered residential.

Usually, all you need to do is get approval at the Committtee of Adjustment. That is usually an affordable fee, where you can represent yourself, or increase your odds of success by hiring a planner (more expensive). If you make unrealistic requests then you might lose and then you'll have to spend more. Either spend more or become resigned to the fact you have a property that wasn't really designed for the intensity you want for it.

Sour grapes about what? I also said I wouldn't move if I could. I like my house, and my neighbour hood with one exception.

I'm not being a realist? Where do you live? Every thing I spoke of is fact. Sorry if it doesn't jive with your world view. The fact that the jack ass that owns the dump beside me is East Asian is relevant. He comes from a culture where there are distinct class divisions and his views on poor people are archaic, and contribute to how he runs his "property management business". His attitude is that "these losers and white trash are lucky i give them a place to live". There is definitely racism going on here but it's not coming from me.

Yes I'm opposed to half done renos or poorly done ones. They are dangerous. I'm not a realist? Can I borrow your rose coloured glasses?

Comment edited by Shempatolla on 2011-04-27 09:08:03

AFAIK as soon as you go to three units it becomes a "multi unit dwelling" and all kinds of regulations and fees kick in.

Yes, at 3 units you need to have architectural drawings and a few other things to be in compliance. But still relatively low cost, and relatively easy when compared to the $100,000+ in cost for zoning change.

Comparing a zoning change to the legal conversion of a single family homes to a multi unit is not an accurate comparison.

If you want the real truth on rental properties , visit the site ontariolandlord
its full of imformation about the ups and mostly downs of renting in Ontario

Excuse me sir, but damning someone due to the culture they come from is very, very wrong. Many Indians and Pakistanis (myself included) do not have arachaic beliefs about poor. This one man does, and it has nothing to do with the shade of his skin, or culture.

Excuse me sir. Did I damn all people of your culture? No just one in particular. And I'm sorry but it's relevant and his attitudes and behaviour are clearly rooted in culture in this instance. If that offends you I'm sorry. But it doesn't change the fact.

Having read through ontariolandlord.ca for the last hour, I don't think I've ever read such an utter distaste for tenant's rights.

These are people's homes. And people have rights when it comes to their homes.

I fear they are coming from the same place of negative association.

this is hyperbole. They don't have more rights than you do as an owner, they simply have rights. And some landlords have no concept that a tenancy is an estate, a right in property. You are not just renting a lawnmower here, you are giving up some of your rights. If it's true that bad tenants sometimes cause problems, it's equally true that bad landlords, with much greater power to ride a month's lost rent, can make poor peoples' lives a nightmare. It's true that in some situations a landlord is reduced to nearly equal situations of need as a result, but this is not the norm, and in these situations the LTB often takes the relative impact into account. Landlords simply can't go into the business of renting thinking this is just any commercial transaction. You're entering a personal relationship and will have to bear some of the risks and burdens associated with that.

The cons already overhauled the RTA and made it much more landlord friendly. That was Harris. You can be sure Hudak will continue that trend. But they may also reduce welfare and increase need and lead to ever more of the problems you've discussed as being at the root of landlord- tenant disputes.

I fear you are greatly mistaken about what is involved. It is extremely exhaustive the process. Also you can wait for up to two years for a reply. I would like to hear from anyone who has successfully gone through the process and succeeded in getting approved for a legal tri-plex. I think you will have no response. It is easy to say you need this, or that, but show the proof.

The point I was making is "their fight is our fight too" in regards to arbitrary fees and regulations.

Absolutely. However, applying the simple mantra of "greed is good" to gathering up loads of wealth can cause serious problems. I have read some very negative comments above, and for the most part civil, about this type of housing conversion. This is the purpose of this article, to encourage legal, safe, and healthy homes for people. The purpose of investing in central Hamilton is a vastly different thing then other places because of the variety of people we have. It should be encouraged, not driven out like some pariah. Rental investment (for me) is about a long term improvement and benefit, not instant monetary gratification. If the city improves, by proxy my income should rise with it, but that is not the only goal.

Follow up: http://www.encyclopedia.chicagohistory.o...

This actually got upvoted? Wow.

The number one rule for making money on housing: don't spend a dime on the place and then run it to the ground until you can get the tax writeoff and pocket all the profit.

The number one rule for making money on housing: don't spend a dime on the place and then run it to the ground until you can get the tax writeoff and pocket all the profit.

I can assure you, sir, that there is nothing in South East Asian culture that perpetrates his behaviour and attitudes. As the saying goes, "there are bad apples in every batch". What exactly is rooted in culture?

There are two rules for a good tennant:

1. Pay up on time.

2. Shut your mouth.

The truth hurts, eh buddy? You wrote this fantasy piece to try and justify yourself abusing the housing rules. I have looked at your website. What exactly is a GuestHouse? A rooming house. I don't know what you are playing at, but I don't like it.

And just what penatly should he suffer? Government grabbing control of his house and then doing what with it?

comment from banned user deleted

FIrst of all, you don't need a license for a rooming house.

Secondly, I am not running a rooming house.

comment from banned user deleted

comment from banned user deleted

Honestly, when my girlfriend (now wife) were looking for our first place together I would've loved a landlord to take that hourecall approach. Instead we had a landlord who demanded endless documentation and cross-town trips for meetings (and it's hard to be punctual when getting across town by bus).

Hostels and rooming houses are not the same. Believe me when I say you do not want to test this issue it has support in high and low places. It does nothing but build up a city and should be supported.

comment from banned user deleted

My hope was to try and improve a city and a ward, but NIMBYism and negativity has conspired to destroy me. I may be leaving the city.

dear "say what",

you run an illegal rooming house yourself and yet you chastise others?

you are a joke and your opinions are based on lunatic visions.

hostels are not rooming houses.

hamilton's bylaws do not contain a definition for hostel because hamilton is still stuck in its 1950's vision of the utopian urban planning which has proved to destroy this city.

On May 01, 2011 at 16:56:42, Capital Idea said:
"You wrote this fantasy piece to try and justify yourself abusing the housing rules. I have looked at your website. What exactly is a GuestHouse? A rooming house. I don't know what you are playing at, but I don't like it."

After bravely anonymously chastising the Guest House on the internet, this petty troll - a small man with an even smaller mind - complained anonymously to the city in an attempt to shut the hostel down.

What's funny about this is that the press generated from the "shut down" has not only resulted in them being able to re-open, but it will likely be the catalyst for changing the bylaws, which could result in more hostels in this anonymous coward's neighbourhood!

Isn't it amazing the way assholes eventually get bitten back in the ass...

Try this site and speak to the small landlords who've lived this "hyperbole" for yourself:

http://www.ontariolandlord.ca/forum/