Saskatoon City Council approves condo conversion policy change
Saskatoon City Council approved proposed changes to policies governing the conversion of existing rental apartments to condominiums at last night’s council meeting.
City administrators presented their report which was prepared in response to a request brought forward by Councillor Pat Lorje during the meeting of City Council held on August 13, 2007 to “provide a report to the executive Committee on a review of our existing condominium conversion bylaw, together with suggestions for improvements to ensure an adequate supply of affordable rental housing while still maintaining an orderly investment market for multi unit accommodation.”
The report highlighted the positive and negative “implications” of condo conversions including the reduction in the supply of rental housing, the disruption and displacement of existing tenants, the creation of opportunities for affordable home ownership, investment and upgrading of older properties and the opportunities condo conversions create for small investors to enter the market.
The current condominium conversion policies offer the following protections for tenants occupying the apartments to be converted:
1) tenants must receive at least three months notice prior to an application being submitted;
2) tenants must receive a reasonable opportunity to purchase a converted unit in the building; and
3) tenants, at the time of application, may stay for up to two years after the date of application.
The report, written by Tim Stueart, Manager of the City’s Development Review Section noted, “In recent months, a number of investors have been undertaking measures to remove tenants from buildings in order to circumvent the requirement to allow tenants to stay in place for up to two years after the date of application. This has been done by giving tenants notice to vacate their units prior to condominium conversion application, or by significantly increasing rental rates.”
Both of these practices are allowable under Saskatchewan’s Residential Tenancies Act, in spite of the hardship that they can cause at a time when vacancy rates are low and alternate accommodations are difficult to find.
The new policy, approved last night brings the following changes:
1) increase the notice period for tenants from three months before an application is made for conversion to six months before an application is approved;
2) delete the provision which allows tenants to stay in place for up to two years after the date of application;
3) add a new clause which will provide that during the six month notice period, no rent increases shall take effect and no construction related to the condominium conversion shall be undertaken;
4) add a new clause which will provide that should the rent be increased or construction related to the condominium conversion be undertaken during the notice period, the applicant will be required to begin the notice period again from the date that the rent increases take effect or the date that the construction work is completed; and
5) add a new clause which will provide that where an applicant has vacated or substantially vacated a residential building prior to submitting a condominium conversion application, the application shall not be approved for twelve months from the date which it is submitted. This requirement shall be waived where a building is vacant as the result of significant damage or where t has been vacated as the result of a Health or Fire Order.
Clearly, these changes provide a strong disincentive for investors to attempt to circumvent policy. Hopefully, they will provide a fair balance for both tenants and landlords when it comes to notices to vacate.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
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Norm Fisher
Royal LePage Saskatoon Real Estate
21 comments so far. We'd love to hear your thoughts.
May 27th, 2009 at 11:24 AM
Playing devil’s advocate here, but isn’t this a huge inhibitor to a free market? To me it sounds like one would have a most difficult time getting a condo conversion accomplished! Would some people consider this as an overextension of government?
Back to my normal views – this is awesome. Now, for why I played devil’s advocate…
If this is not considered “too much”, then why can’t more be done to ensure housing remains affordable? House flippers and investors drive the market up artificially, this is no secret!
Being put out of your home is just as bad as being put out of the opportunity to have a home. Who would actually think that someone forced to endure higher rental rates or eviction could handle the current prices of homes?!
Even two years down the road – both the trends of house prices and income dictate that the situation will only be worse when the time comes to leave.
May 27th, 2009 at 11:24 AM
Lol!
I don’t ever remember suggesting that the “free market” should resemble the wild west. You have to have some orderly way of managing these things and turning 192 tenants loose with thirty days notice is probably not the way to accomplish that.
While the benefits to tenants are obvious, there are also some good provisions for landlords (the two year thing being dropped). Now property owners can actually plan a project within a reasonable time frame while tenants enjoy quiet possession of their homes for a reasonable period of time.
This strikes me as a good policy change which respects the rights of tenants and property owners.
“Artificial” increases are unsustainable. Why not let the market handle what it traditionally handles fairly well.
What do you think will happen if an additional 3,000 condos come on the market next year? Renters would have a selection of many improved projects to choose from, prices would likely come back to where they should be and Saskatoon residents would be gleefully picking the pockets of “investors” who thought they were pretty smart.
If you place controls on the disposition of property, who gets to decide who is allowed to buy, and how much they should pay? Does that not seem like a scary idea to you?
If you believe in this position so strongly, throw out some ideas that could work. The “stop the rich” thing really isn’t a solid and workable plan.
You always seem to forget that we need people who are willing to buy property and rent it to others. If you eliminate all incentive to do so you will ultimately end up with more homeless people, and property that you can’t give away.
May 27th, 2009 at 11:24 AM
Using the past as a cursor, you can identify that there were more satisfied people than there are now. The frequency of people who are able to afford a home is decreasing.
Oddly, I generally support the expansion of suburbs. A friend of mine and I had a discussion about this and he very strongly spoke out against suburbs.
I told him that his concerns were valid and easily visible.
Amongst them were concerns about the types of mentalities suburbs breed (and I’m sure these popular generalizations are a worthwhile concern), as well as effects on the downtown core of any city.
The only thing I countered with was that they can alleviate the increase in price of existing homes in a city – they can make room. Instead of people with many years over younger buyers taking old properties and putting extra in to fix them (which is nice, no doubt!), they can purchase a clean, new more modern home.
I don’t have any facts and you know how I feel about such things. Shoot the idea down if you’d like, but I feel like the demand needs to be shifted where it belongs. Such that it ceases to displace everyone and upset a whole system that has been working with much less complaint for at least 20 years!
But this can’t be predatory and I can’t emphasize that strongly enough. You don’t expand a city in an attempt to grant exclusive and lucrative opportunities – only to find out they have been poorly implemented. There need to be checks and balances that ensure that we aren’t building a cardboard society WHILE GROWING.
Does that help at all? I had a hard time putting this together….
May 27th, 2009 at 11:25 AM
Alex,
You make some excellent points and I hear where you’re coming from. I know that you wouldn’t know it by the way I’ve spoken to you from time to time, but I really do care about many of the issues that are of concern to you. I have a 22 year old daughter and a 19 year old son. I want them to have a future in Saskatoon and I want them to be happy in a home of their own someday. I would gladly give up half of the value of my home to know that they could someday have a place of their own. Whatever market conditions exist at the time, they are going to have to be able to carry the majority of the burden themselves. This is a big concern for me.
I want you to have a home as well and there are three things that I’m feeling very confident about.
1) You will own a home of your own some day, and probably not too far down the road. People half as intelligent as you are managing to do it. Just get out and meet some of your neighbours.
2) You will accomplish that like most other people do. You’ll make it a priority. You and your fiancé will mutually agree on some sacrifices which will be made to accomplish it. You’ll work hard to make it a reality. The first few years will be the hardest of your life but once you achieve the goal things will get progressively easier for you.
3) When you have accomplished the goal, you will be very much opposed to the government messing with your property rights by telling you when you can sell the home, to whom you can sell it, or how much you can sell it for.
Your point about new developments is a good one. There’s no doubt that “supply” has contributed to the problem in a big way, especially in Saskatoon. If you want more people to come, you have to have homes to put them in, otherwise it’s hellish out there as we have all witnessed this past year. If you had a pocket full of cash and wanted to build a brand new house it would be a challenge to get a possession before fall of next year. That impacts the availability of resale homes and leaves us all in a prime position to be screwed over big time. I’m all for whatever it takes to bring the supply up (watch the condo market as supply continues to increase).
All that said, you should know that home ownership rates have been steadily climbing for years in Canada. Saskatchewan has always enjoyed higher rates of home ownership compared to any other province. I know things look bleak right now but overall, large numbers of Canadians have been fortunate enough to own property.
http://realtytimes.com/rtcpages/20050310_canmarket.htm
http://allaroundthehouse.com/lib.pqr.r1.htm
http://www.chba.ca/news/policy/homeownership%20rates.pdf
BTW, some of the predators are about to become prey.
May 27th, 2009 at 11:25 AM
Norm,
Do you see 1 bedroom condos ever coming back down to sub 150,000 pricing? With all the new condos coming on the market, do you think this will drive prices down? Some people I have talked to say that in real estate prices typically don’t drop, and that these new units will probably be priced similarily to what we are seeing now, but will just appreciate slower. I know that in the past month I have done drawings for about five 60+ unit condos in and around the Willowgrove area. This combined with all the other condo conversions will add a huge inventory to the market come next year. One would think this would have an effect on the pricing of condos here in Saskatoon.
May 27th, 2009 at 11:26 AM
Jason,
There are currently six 1 bedroom units in area 1 which are offered below $140,000.
I agree with the notion that historically most market corrections have been experienced through slower growth, as opposed to price drops. However, over supply has seldom been a problem in Canada. Your comments are correct in that there is a great likelihood the Saskatoon could find itself flooded with condo options over the next couple of years. On top of the 1000+ applications which the city has already received, there are many other building which have been purchased with conversion in mind. The gentleman who just received approval to convert Duchess Court claims to own 2,000 units in Saskatoon. These things are all over the place. Personally, I wouldn’t touch them right now. Even at $140,000, I think one needs to consider the benefits of renting. Considering the difference in monthly carrying costs between renting and buying, you probably end up much further ahead renting assuming that you can save the difference.
May 27th, 2009 at 11:26 AM
I have a buddy up you way, now I can tell him I know someone to refer him too if he buys a house!
I also noticed your on the Canadian RE Alliance on the TOREAL blog as he just added me. I added you to my site, could you please link me back as “Sarnia Real Estate” Thanks!
May 27th, 2009 at 11:26 AM
I have to agree that the number of homeowners are decreasing but we have to emphasize as well that 10 years ago, people doesn’t have other options than buying a home (or renting an apartment, which makes buying your own home more palatable) now there are a lot of condos and smaller land area to fill with houses, people won’t be making anything if there’s no demand for it so… Anyway, about the provisions, I think the updated policy striked the balance, the tenants are secured and so are the landlords, now we only have to be wary of people who loves to look for loopholes in these kinds of things.
May 27th, 2009 at 11:27 AM
Interesting story in today’s SP regarding landlords attempt to “squeeze” tenants.
Read it here
May 27th, 2009 at 11:28 AM
With the amount of space we have in Canada and amount of growth we see happening with only the government to block it – there is no reason why we can’t ensure everyone who wants a home can have a home.
Again – should they be something people use as leverage over each other? I don’t think so. A home is one of those few things everyone needs an equal un-competitive shot at.
Imagine if driving were allowed to be “competitive”. It’s the same as all other things, there are people who can afford what it takes to be better off. Those advantages need to be leveled off.
May 27th, 2009 at 11:28 AM
Alex,
I agree with your point but tell me, why does my boss get to drive a Mercedes? All I have is a Chrysler, but hey, it gets me around.
May 27th, 2009 at 11:29 AM
Norm,
Remember, you’re distinguishing between the two highest positions when it comes to home/car ownership.
What I’m pointing to is more a comparison of the bottom two.
Why can’t I have a home when a few years ago I could have and the only reason I can’t now is because corporations aren’t paying enough? This is a difference between have and have not. Not have and have it damn sweet.
May 27th, 2009 at 11:30 AM
Alex,
I think Norm’s comparison has merit here. If the Mercedes is like living in Erindale or Briarwood, then Norm’s Chrysler would be like living in Buena Vista or Hultain. If someone who is starting off would be willing to buy a used car for lets say $2000 (King George or Mayfair). Even though it’s not the nicest “car”, it will get them around for a few years until they can upgrade.
Yes, most incomes earned doesn’t get you a nice house on the east side anymore but it still can get you a house if you’re willing to sacrifice some things. I don’t want to start an argument here but I would suggest that corporate pay isn’t “all” that’s keeping you from owning a house.
Again, not trying to start an argument here but just a question. What stopped you from buying this time last year?
May 27th, 2009 at 11:32 AM
Northstar,
“Sacrifices” that need to be made are artificial and bordering on arbitrary. I’ve already made a comment regarding the new expectations all sellers seem to think they can impose on others. I find it very convenient that they start suggesting all of these wonderful ideas of lowered expectations A) in the light of their investments and B) in a country that has never once EXPECTED people to make such ridiculous changes.
Quite frankly I think it’s pompous and arrogant that you would even put forward that I am the one who needs to change. The market was fine until greedy buggers came along and started wringing it for their Solstices.
Your suggestions come off as patent coincidental greed. You just want to fuel a little stupidity – thanks but no thanks.
When I tell people that in Saskatoon, people are expected to rent out part of their home in order to afford it, do you know what their reactions are? They laugh. They think it’s ridiculous because the market has allowed its normal prices to reflect that expectation. Nobody I talk to seems to think it’s something that is justifiably expected, yet in Saskatoon – sellers know they can exploit that because it’s become the “norm” (no, not Norm).
My house is MY house thank you and I will not have it on YOUR TERMS just so that YOU can turn a quick buck faster.
Why didn’t I buy? Because I wasn’t in Saskatoon this time last year. I was in school. When I graduated, I got an opportunity in Saskatoon which I took and I walked right into a wall.
Won’t be making that mistake again.
Regarding incomes earned, they don’t get you anything on the west side anymore either. Businesses are not paying enough and I think you need a reality check if you think they are – try living on 2200 a month when you need a car and tell me if a house is a “wise” investment…
The standby excuse of “well what about a condo” just becomes downright insulting. Not only are they overpriced, but I may as well stay in an apartment for what little space they get me.
Again, spare me your “times have changed” bullshit, it is a complete lie used to further fuel market pressure. Times have not changed, there’s just a lot of greedy people running around who need to be collared before the damage they do to the middle class is permanent.
Houses are for living in. Any claim otherwise just goes to show you only have an interest in gouging honest citizens for your own pathetic and insecure materialism.
May 27th, 2009 at 11:33 AM
Well,
I tried to have a civil conversation with him. I’m done with the “poor me” drama and constant personal attacks.
“Quite frankly I think it’s pompous and arrogant that you would even put forward that I am the one who needs to change.”
Your right Alex. It couldn’t possibly be you. It’s everyone else that has to change.
It’s funny how the negative that people see in others is actually what is inside themselves.
May 27th, 2009 at 11:33 AM
Northstar,
I like the holstered “I tried to” argument. Spare me the sanctimonious garbage. Who exactly were you talking to – “I tried to talk to him”, is this a popularity contest for you or a cheap way to mill dishonest profit?
Some of us are interested in homes because we want to live in them. Not as some capitalist sport.
As I have yet to get involved in houses aside from LOOKING accusing me of anything is about as effective as accusing a newborn child.
Get off of it bud, nobody is going to accept the obligation to be screwed!!
May 27th, 2009 at 11:36 AM
Alex
Oh, you’re still a brat!
You know that I’m not a big “investor” guy, but I think you’re far too hard on Northstar. I had the pleasure of meeting him once, at one of my listings. He is a pleasant, clean cut young man who is doing his best to build a future for his family. I’ll bet you would actually like him. I do.
I appreciate your passion and conviction Alex. I wish I would have had an opportunity to meet you before you left Saskatoon. I would love to know where you are and how your new gig is going. Drop me an email sometime if you can find the time.
Have you actually been “looking?”
Northstar,
You are right. You should not talk to Alex anymore.
I know his words can be sharp. I actually found it helpful to pretend he wasn’t talking to me, even when I knew he was. If you can get past the personal attacks, there are usually some words of wisdom to be found (Sorry Alex. Don’t mean to talk about you like you’re not here).
It’s just too easy to say, “what kept you from doing it last year?” The bigger question is “what can I do to make it a little easier for someone that didn’t do it last year to do it next year?” It’s a tough question, but it needs to be addressed. I know you’d agree that everyone should have the opportunity to own a home of their own.
Guys, almost every day someone tells me how much they love the “exchanges” and “discussions” which take place here. Thank you both for being so willing to share your opinions. Don’t go changin’, more than a little bit.
May 27th, 2009 at 11:42 AM
Norm,
“what kept you from doing it last year?” wasn’t intended as a sarcastic comment. I was asking a question. That’s why I started it with “Not trying to start an argument”. I wanted to know the reason. I can understand not being in a position to buy and working hard to get to that position, only to have the market take off on you. However I find most of the complainers to have no intention of buying regardless of the market. Most just need something to complain about.
Moreover I don’t doubt that Alex is an intelligent guy with good points from time to time. My beef with him has rarely been his points of view (even though I don’t neccessarily agree). My beef is this:
“is this a popularity contest for you or a cheap way to mill dishonest profit?”
“Quite frankly I think it’s pompous and arrogant that you would even put forward that I am the one who needs to change. The market was fine until greedy buggers came along and started wringing it for their Solstices.”
“Your suggestions come off as patent coincidental greed.”
” Northstar’s jabs and shameless self appointed representation of popular opinion gets old. The grandstanding really shows how desperate he is to fuel greed.”
“Winnipeg won’t be host to this insanity no matter how much bravado and arrogance you flaunt on a blog.”
“Arrogant and disgusting, you make me sick.”
“Any claim otherwise just goes to show you only have an interest in gouging honest citizens for your own pathetic and insecure materialism.”
This is all garbage that brings down his credibility. Without this nonsense I might actually respect his view points.
As far as being greedy, next time Alex is back in Saskatoon I can prove in 5 minutes that he is a lot more attached to money than I am.
“I actually found it helpful to pretend he wasn’t talking to me”. That sounds like great advise and I will try to take it. Maybe you can create an ignore button?
May 27th, 2009 at 11:43 AM
Lol! He can be hard to talk to.
May 27th, 2009 at 11:45 AM
(My captcha is “I’ve rampant”, hee hee)
Suit yourself but I make enough predictions here about the outcomes that are now coming true.
Notice how only a select few actually predict about the people all this is hurting and not the limited windows for investment opportunities?
I find it so frustrating that the people making the killing here think that because their actions lack opposition that they are somehow condoned. That because no group en masse says “no”, that the obvious can be assumed.
This is just not the case. In fact, it is totally opposite and the middle class by definition is so hard to elicit any sort of response from because both its high and low boundaries are subject to interpretation. But don’t be fooled, we are all caught in the storms that ensue from greed eventually…
I think the moral compass is spinning around for these people because they live in a totally different world of values.
The endless accumulation of wealth by obvious extrapolation ends in the endless deprivation of wealth.
Think hard.
May 27th, 2009 at 11:46 AM
Reading that star phoenix article about renter suspecting that they are ramping up to kick him out are correct. I’m in one of the colliers mcclocklin buildings on 104th street that had the same thing. Offered me my 1 bedroom 1960′s NOTHING UPGRADED apartment for $155,000. Now after the rent went up, they are doing handrail, milk box removal, bringing stuff up to code yes but it’s crooked.
Steer clear of Colliers McClocklin if you ask me.