September 16, 1999

To:Planning and Transportation Committee

From:Acting Commissioner, Urban Planning and Development Services

Subject:Registration of Second Suites

Purpose:

To report further on an implementation plan for the registration of second suites, as requested by Council at its meeting of July 27, 28, 29 and 30, 1999, and on a series of motions arising from the Council debate on the registration of second suites.

Funding Sources, Financial Implications and Impact Statement:

If Council institutes a program for the registration of second suites (referred to as two-unit houses in S207.3 of the Municipal Act) and endorses a strategy that relies solely upon complaints and voluntary compliance, the impact on staffing should be minimized, with the greatest impact in those former municipalities where second units were dealt with solely as a zoning issue, and housing and property standards within the illegal unit were not actively enforced. With the legalization of the units, the issues of housing and property standards within the unit will have to be addressed. However, if Council adopts a strategy that includes pro-active enforcement, the need for additional staffing could be significant.

Recommendations:

It is recommended that:

1. The City Solicitor be instructed to prepare the necessary by-law to institute a program for registration of two-unit houses, and that authority be granted to introduce the necessary Bill in Council to give effect thereto; and

2. Council endorse an enforcement strategy based only upon responding to complaints and voluntary compliance by property owners;

3. Council request the Province of Ontario to undertake the legislative changes necessary to permit the City of Toronto to pass a by-law for the licensing and regulating of two-unit houses.

or

4. Council receive this report for information, and not adopt a program for registration of two-unit houses.

Council Reference/Background/History:

Council, at its meeting of May 11 and 12, 1999, requested that the Commissioner of Urban Planning and Development Services and the City Solicitor report on an implementation plan for the registration of second suites, including a draft by-law and outlining what resources may be required, if any, to support the plan.

That report was presented to the Planning and Transportation Committee at its meeting of July 12, 1999. Committee, at that meeting, recommended that Council not adopt a program for registration of two-unit houses.

Council, at its meeting of July 27, 28, 29 and 30, 1999, referred back to the Planning and Transportation Committee, the issue of a program for registration of two-unit houses together with a series of motions arising from the Council debate on the matter.

Comments and/or Discussion and/or Justification:

The issues surrounding the need for the registration of two-unit houses and the motions referred back to Committee pose the following:

1.Should a program of registration of two-unit houses and the by-law necessary to implement the program be adopted?

2. What is the appropriate fee to be charged upon registration?

3. Can annual inspections be required and an annual renewal fee be charged?

4. What is the appropriate enforcement strategy and staffing requirements?

Should a registration program be adopted?

Section 207.3 of the Municipal Act, R.S.O., 1990, c.M45, as amended, authorizes the municipality to pass by-laws providing for the registration of two-unit houses or such classes of them, as are set out in the by-law. It should be noted that the use of the phrase: two-unit houses as opposed to second suite arises from the definition in the above-noted section which defines a two-unit house as a detached house, a semi-detached house or a row house which contains two residential units.

A registration by-law may provide for:

a. the registration of two-unit houses and the revocation of the registrations; and

b the appointment of a registrar to register two-unit houses, to revoke registrations and to perform such other related duties.

A registration by-law:

a. prohibits any person from operating or permitting the occupancy of more than one residential unit in a two-unit house unless the house is registered;

b. specifies the standards which must be met to register a two-unit house;

c. requires such inspections of two-unit houses as are necessary to determine, before registration, if they comply with the prescribed standards;

d. designates the inspectors for the purposes of the by-law; and

e. fixes fees for the registration and inspection of two-unit houses.

It is important to note that the Act specifically provides that a two-unit house, once registered, remains registered without payment of any renewal or other fees, unless the registration is revoked.

The primary purpose of registration of two-unit houses is to institute a program to better assure compliance with all by-laws, codes and regulations applicable to two-unit housing within the City. The implementation of such a program may also serve to promote safe, healthy and habitable housing conditions in rental housing units, to help reduce deterioration of rental housing units and to encourage responsible management, maintenance and use of rental housing units by the inspection and inventorying of these units.

Committee, at its meeting of July 12, 1999, recommended to Council that a program for the registration of two-unit houses not be adopted.

In considering the implementation of such a program, the Committee took into account the following considerations:

- The former City of Toronto, with the longest experience of second suites, did not have a registration system;

- The former City of York and Borough of East York implemented registration systems but these were discontinued;

- An onerous registration system could act as a barrier to the creation of second suites;

- Registration is a 'one time' process and does not improve rights of entry;

- Inspections happen at the time of registration and only provide a snapshot at the beginning;

- Registration and enforcement are not the same thing. Enforcement of the Building Code, Fire Code, Property Standards By-laws and Zoning By-laws will continue regardless of registration.

As further background, discussions with staff from the City of Brampton, which has had a registration by-law in place since May, 1996, have indicated that less than 10 percent of the second units (approximately 1,000 out of an estimated 10,000) in Brampton have been registered since inception of its program.

What is the appropriate fee to be charged upon registration?

If a program is to be implemented, Council has the authority to fix fees for registration and inspection in the by-law.

At Council, the debate surrounding the appropriate fee ranged from no fee for registration in order to ensure that the fee would not pose a barrier to registration to full cost recovery in order to ensure sufficient enforcement staff are available for enforcement of the registration by-law including the Building Code, Fire Code, Property Standards By-laws and Zoning By-laws.

For reference purposes:

In the former City of York By-law the fee schedule was as follows:

1. Inspection Fees

(A)$150.00 plus the cost of a building permit, where a building permit was required.

(B) $250.00, where no building permit was required.

If additional inspections are required, an additional fee of $50.00 per inspection will be charged and will be payable at the time of registration.

2. Registration Fee

A Registration Fee of $400.00 is payable at the time of registration and prior to registration.

In the former Borough of East York By-law the fee schedule was as follows:

1. Inspection Fees

(A)$0, where a building permit was required.

(B) $150.00, where no building permit was required.

If additional inspections are required, an additional fee of $50.00 per inspection will be charged and will be payable at the time of registration.

2.Registration Fee

A Registration Fee of $150.00 is payable at the time of registration and prior to registration.

For comparison purposes, in the City of Brampton By-law, the fee schedule is as follows:

1. Registration Fee:

PART IApplication Processing (due upon initial application)$450.00

PART IIFinal Inspection and Registration

(due upon final sign-off and registration)$450.00

TOTAL$900.00

Clearly, the notion of full cost recovery for the enforcement would be dependent upon the nature of the enforcement strategy endorsed by Council.

If the strategy endorsed is one which relies solely on complaints and voluntary compliance, the impact on staffing should be minimized, with the greatest impact in those former municipalities where second units were dealt with solely as a zoning issue, and housing and property standards within the illegal unit were not actively enforced. With the legalization of the units, the issues of housing and property standards within the unit will have to be addressed.

If the strategy adopted is more pro-active in nature, such as employing sweeps of designated areas or a city-wide survey, the staffing impact would be significant with an estimated 100,000 existing units to be inspected and registered.

In addition to the staff time involved in responding to the complaints, and/or going door to door in any area sweep or city-wide survey, the Chief Building Official has indicated that each unit, whether existing or new, that requires a building permit, would require approximately two-person days to complete the necessary reviews to issue the building permit and the necessary inspections to confirm the work is completed in accordance with the approved drawings and the Ontario Building Code.

In the case of pre-existing units, a Fire Prevention Officer would also have to inspect to determine compliance with the Ontario Fire Code. This would require an additional one to two person days to complete the necessary reviews and inspections.

If an average of four person days is used as an estimate of the staff time involved in the investigation and inspection of an existing unit, and premised upon an estimated salary of $50,000 for an FTE, the inspection costs associated with an existing unit would be approximately $550.00.

If an average of two-person days is used as an estimate of the staff time involved in the building permit plan review and inspection of a new unit, and premised upon a estimated salary of $50,000 for an FTE, the inspection costs associated with a new unit would be approximately $275.00. It may be appropriate to charge no inspection fee for new units on the basis that a permit would be required and the collection of the building permit fee would cover all associated plan review and inspection costs.

In addition, a registration fee may be charged for the cost of administering the registration documentation and associated clerical duties. It is estimated based upon the experiences from the administration and issuance of business licences that a fee of approximately $100.00 is appropriate for the registration fee.

Can annual inspections be required and an annual renewal fee be charged?

Section 207.3 (4) of the Municipal Act clearly states that a two-unit house, once registered, remains registered without payment of any renewal or other fees, unless the registration is revoked.

The requirement of an annual inspection and the payment of an annual fee would change the nature of the program from one of registration to one of licensing. In order to accommodate a licensing scheme for two-unit houses, changes to the Municipal Act or Special Legislation would be required. This can only be accomplished with the assistance of the Legislature of Ontario.

What is the appropriate enforcement strategy and staffing requirements?

i. Inspection/investigation

The enforcement of this by-law and the registration program requires inter-departmental coordination among the inspectors and officers of the Building Division, and Municipal Licensing & Standards Division of Urban Planning and Development Services, and the Fire Services Division of Works and Emergency Services.

Approaches to initiate inspections/investigations to identify two-unit houses include:

a. complaints;

b. voluntary compliance (requests for registration by homeowners);

c. sweeps (targeted areas); and

d. city-wide surveys.

Complaints

I. ormal first step in a compliance program.

II.Reactive, not pro-active.

III. Limited impact on total community.

IV. Addresses individual concerns at an individual property.

V. Lowest impact on staffing

Voluntary Compliance (Requests for Registration by Homeowners)

I. Normal first step in a registry program.

II. Reactive, not pro-active.

III. Limited impact on total community.

IV. Addresses individual concerns at an individual property.

V. Ensure safe, healthy and habitable housing conditions prior to occupancy.

VI. Low impact on staffing

Sweeps

I. Pro-active program specifically targeting defined areas.

II. Aids in public education/information regarding applicable standards.

III. Large resource commitment across departmental lines.

IV. Results in targeted neighbourhood can be significant; however limited rights of access into occupied units will impact on success.

City-wide Surveys

I. Pro-active program.

II. Highest level of staffing required.

III. Eases necessity for neighbourhood complaints.

IV. Enforcement process can be equitably applied throughout the City.

V. Limited rights of access into occupied units will impact on success.

In 1996, the Fire Chief in Scarborough initiated a formal inspection program.

The Scarborough Fire Department visited 2803 homes - 155 had two units. The program was revised because of residents' complaints (of intimidation four fire fighters showing up at the door). In the revised program that targeted known or suspected properties with second suites, the Fire Department visited 416 homes - 197 had two units. The program was terminated in 1997.

The former City of York policy was not to be pro-active on illegal units. With the enactment of the registration by-law, property standards sent out letters to the known illegal properties (about 700). There were 42 registrations in 1997, and in 1998 buildings staff stopped registering second suites to cut costs (high administrative costs for inspections and registration, budget and staff cut backs).

Increase awareness/knowledge

A key component to the success of the registration program will be the development of a campaign to increase the knowledge and awareness of the tenants, landlords, mortgage lenders and insurance companies, and the public in general of the new requirements and obligations associated with a second suite in a two-unit house.

This can accomplished by a coordinated approach using several communications tools including:

a.Press releases and information published in local newspapers;

b. Mass mailing of information in conjunction with tax bills directed at property owners;

c. Bus shelter advertising program directed at second unit tenants;

d. Public service announcements on community cable TV;

e. Community meeting with community associations and tenant advocacy groups; and

f. The development of a small landlord education program.

Compliance/Prosecution

Rights of Entry

The rights of entry and inspection are specifically delineated in s. 207.3 (6), (7), and (8) of the Municipal Act. These rights of entry mirror those provided in the Building Code Act for enforcement of Property Standards By-laws. An inspector may, at all reasonable times, and upon producing proper identification, enter upon land and into buildings without warrant to inspect a building for compliance. However, an inspector shall not enter any room or place actually used as a dwelling without requesting and obtaining consent of the occupier, having first informed the occupier that the right of entry may be refused.

Actions to Gain Compliance:

a. A verbal request (persuasion techniques) to correct violations.

b. A first letter is a written request to correct violations. It does not legally bind the responsible party to carry out the work but it does point out to the contravenor that this is initial action and continued non-compliance will result in further action.

c. An order is a formal legal request to correct violations within a stated time limit. Non-compliance with the Order results in fines, either using the Provincial Offences Ticket (provided short form wording and set fine amounts have been approved) or legal action through the Provincial Court.

Resources

Staffing impacts will vary with the strategy for enforcement that Council endorses.

If the strategy endorsed is one that relies solely on complaints and voluntary compliance, the impact on staffing should be minimized, with the greatest impact in those former municipalities where second units were dealt with solely as a zoning issue, and housing and property standards within the illegal unit were not actively enforced. With the legalization of the units, the issues of housing and property standards within the unit will have to be addressed.

If the strategy adopted is more pro-active in nature, such as employing sweeps of designated areas or a city-wide survey, the staffing impact would be significant with an estimated 100,000 existing units to be inspected and registered.

In addition to the staff time involved in responding to the complaints, and/or going door to door in any area sweep or city-wide survey, the Chief Building Official has indicated that each unit, whether existing or new, that requires a building permit, would require approximately two-person days to complete the necessary reviews to issue the building permit and the necessary inspections to confirm the work is completed in accordance with the approved drawings and the Ontario Building Code.

In the case of pre-existing units, a Fire Prevention Officer would also have to inspect to determine compliance with the Ontario Fire Code. This would require an additional one to two person days to complete the necessary reviews and inspections.

If an average of four person days is used as an estimate of the staff time involved in the investigation, inspection and registration of an existing unit, and it is assumed that one FTE works 235 days in a year, one FTE would be required for approximately 60 units to be registered. If just 1% of the existing stock, 1000 units came forward for registration in the year, it would require approximately 16 FTE's to process the work load.

If an average of two-person days is used as an estimate of the staff time involved in the building permit plan review, inspection and registration of a new unit, and it is assumed that one FTE works 235 days in a year, one FTE would be required for approximately 120 units to be registered. If 1000 new units were created in the year, it would require approximately eight FTE's to process the work load.

Conclusions:

The adoption of a by-law to institute a registration program may assure compliance with all by-laws, codes and regulations applicable to two-unit housing within the City. The implementation of such a program may also serve to promote and ensure safe, healthy and habitable housing conditions in rental housing units, to prevent deterioration of rental housing units and to encourage responsible management, maintenance and use of rental housing units by the inspection and inventorying of these units. However, the costs associated with the staffing requirements needed to deliver the program may make it prohibitive to operate other than on a complaint and/or voluntary compliance basis, and since enforcement of all by-laws, codes and regulations is presently done on those bases, there may be little value added by a registration regime.

If Council wished the introduction of a licensing regime by the City to address two-unit houses as opposed to a registration program, this can only be accomplished after legislative changes are enacted by the Legislature of Ontario.

Contact Name:

Frank Weinstock

12th Floor, East Tower, City Hall

fweinst@toronto.ca

392-0404 (tel.); 392-8805 (fax)

Reviewed by:

__________________________________________________________

Harold BrattenJames Ridge

Acting Executive DirectorActing Commissioner

Municipal Licensing and StandardsUrban Planning and Development Services