Item - 2024.PH16.4

The Planning and Housing Committee recommends that:

1. City Council establish a new chapter in the City of Toronto Municipal Code substantially in accordance with the draft bylaw attached as Attachment A to the report (October 16, 2024) from the Chief Building Official and Executive Director, Toronto Building, to regulate the licensing of renovations for residential rental units in the City of Toronto and require that the provisions apply to all rental units in Toronto unless exempted in the bylaw, with the following amendment:

a. delete Section 2.1, subsection B(1) and Section 2.1, subsection B(2).

2. City Council direct that the new Municipal Code chapter come into effect on July 31, 2025.

3. City Council amend City of Toronto Municipal Code Chapter 441, Fees and Charges in accordance with the draft by-law in Attachment D to the report (October 16, 2024) from the Chief Building Official and Executive Director, Toronto Building, by creating and adding a new fee for a Rental Renovation Licence of $700.00 (plus Harmonized Sales Tax) per rental unit, effective July 31, 2025, and adjusted yearly for inflation.

4. City Council direct the Chief Building Official and Executive Director, Toronto Building to include the staffing and resources, and introduction of a new Rental Renovation Licence user fee required for the implementation of the bylaw to address renovictions as described in the October 16, 2024 report from the Chief Building Official and Executive Director, Toronto Building " Implementing a Rental Renovation Licence Bylaw to Address Renovictions" through the 2025 Operating Budget process.

5. City Council direct the Chief Communications Officer, Strategic Public and Employee Communications, in consultation with the Chief Building Official and Executive Director, Toronto Building, and the Executive Director, Housing Secretariat to develop a communications strategy with appropriate funding established through the 2025 budget process. This strategy should include a multilingual public education campaign for Toronto tenants, landlords, and other interested parties, focusing on the following:

a. Informing tenants of the Bylaw.

b. Informing landlords of the new licensing standards and their obligations under the Bylaw.

c. In partnership with Toronto Building and the Housing Secretariat informing relevant advocacy and industry associations about the Bylaw to enable their support for both tenants and landlords; and

d. Implementing the strategy in two phases: 1) The initial rollout of the new bylaw, and 2) A continued program to educate landlords and tenants.

6. City Council request the Chief Building Official and Executive Director, Toronto Building, in consultation with the Executive Director, Housing Secretariat and Chief Communications Officer, Strategic Public and Employee Communications to develop publicly accessible communication materials to support the effective administration and enforcement of the bylaw, including multi-lingual guidelines for landlords and tenants to support the bylaw requirements for a Tenant Accommodation Plan or Tenant Compensation Plan.

7. City Council direct the Chief Technology Officer, Technology Services, in consultation with the Chief Building Official and Executive Director, Toronto Building to support the effective administration and enforcement of the Rental Renovation Licence Bylaw, by ensuring that any required technology enhancements identified by Toronto Building are implemented and a searchable online registry for Rental Renovation Licences is available prior to July 31, 2025.

8. City Council request the Chief Building Official and Executive Director, Toronto Building, in consultation with the Executive Director, Housing Secretariat and Chief Technology Officer, to monitor and provide a status update to City Council on the implementation of the Rental Renovation Licence Bylaw by July 31, 2027, including key indicators such as the number of licences issued, tenant inquiries received, enforcement actions taken, communications strategies implemented, and recommendations for any amendments to the Bylaw, technology resources and support, or staffing levels, in order to strengthen its effectiveness in addressing tenant evictions in the City of Toronto related to the illegitimate use of N13 notices to end tenancy.

9. City Council authorize the City Solicitor to introduce the necessary bills to give effect to City Council's decision and authorize the City Solicitor to make any necessary clarifications, refinements, minor modifications, technical amendments, or bylaw amendments as may be identified by the City Solicitor and the Chief Building Official and Executive Director, Toronto Building.

The Planning and Housing Committee:

1. Directed the Deputy City Manager, Development and Growth to report directly to the November 13, 2024 meeting of City Council on any interim measures and associated resources to protect tenants and prevent renovictions before the by-law comes into force.

The Chief Building Official and Executive Director, Toronto Building gave a presentation on Implementing a Rental Renovation Licence Bylaw to Address Renovictions.

This report responds to the June 26, 2024, City Council directive to staff to develop a “Hamilton-style” renovictions bylaw (Renovictions Bylaw) and implementation framework to protect tenants and prevent "renovictions". A renoviction is when a landlord illegitimately evicts a tenant by alleging that vacant possession of a rental unit is needed to undertake renovations or repairs. Renovictions can include refusing to allow a tenant who has exercised their right of first refusal to return post-renovation, illegally raising the rent on a returning tenant, or not undertaking major renovations after evicting renters. This results in the displacement of tenants, the permanent loss of affordable market rental housing, and contributes to rising homelessness in Toronto.

As rent policies and landlord-tenant matters fall under provincial jurisdiction, the City of Toronto has urged the Province to take action against renovictions, including enforcing the Helping Homebuyers, Protecting Tenants Act, 2023 (Bill 97), improving Landlord and Tenant Board processes, introducing vacancy rent control, requiring temporary relocation assistance during renovations, and creating a centralized data system for rental properties and evictions. In the absence of these provincial changes, Toronto has developed local solutions. In 2022, City Council adopted a Renovictions Policy to guide the development of a bylaw to curb evictions done under the pretext of a renovation, protect tenants, and preserve affordable rental housing.

The City of Hamilton was the first Ontario municipality to pass a bylaw requiring landlords to obtain a licence before undertaking renovations that necessitate tenant eviction. In June 2024, the Planning and Housing Committee reviewed a staff report analyzing Hamilton’s bylaw and directed staff to undertake consultations with affected stakeholders and recommended a similar approach for Toronto. Over August and September, the City undertook a multi-channel consultation program consisting of focus groups with housing advocates, tenants rights experts, landlord and tenants associations, six city-wide in-person consultations and one virtual consultation, and a public survey. The results of this feedback, and analysis by City staff, have informed the Renovictions Bylaw proposed in this report that will require landlords to:

• Apply for a Rental Renovation Licence within seven days of issuing an N13 notice to end tenancy

• Obtain a building permit before applying for the Rental Renovation Licence

• Obtain and submit a report from a qualified person identifying that the renovation or maintenance work is so extensive that the tenant must leave the unit, and pay a Rental Renovation Licence fee of $700.00 per unit

• Post a Tenant Information Notice at the subject unit to inform the tenant of the licence application and to enable the tenant to seek information about their rights

• Complete a plan to provide tenant(s) who choose to return to their units with temporary, comparable housing at similar rents, or provide monthly rent-gap payments (based on post-2015 average market rents) to cover the rent difference, with tenants finding their own temporary housing

• Provide moving allowances to all tenants

• Provide tenants with severance compensation where the tenant is choosing not to return to the unit after the renovation or repair work is complete

• Post the issued Rental Renovation Licence on the door of the unit

This report recommends the Renovictions Bylaw take effect on July 31, 2025, allowing staff sufficient time to undertake appropriate education and communication efforts. The Toronto Building Division will implement and enforce the bylaw. Toronto Building staff are well positioned to inform landlords of their obligations under the bylaw early in the building permit process and will develop clear, understandable and multi-lingual public-facing guidelines to support compliance.  Staff heard clearly during public engagement of the importance of proactively updating tenants on the status of renovation licence and building permit-related work. Toronto Building will be actively monitoring building permits on units where renovation licences have been issued to support the timely completion of work and facilitate the ability of tenants to return to their rental unit as quickly as possible.

The proposed framework is intended to balance the need to address the misuse of renovations as an excuse to evict tenants, with the need for renovations and repair work that are necessary in Toronto with its often aging, existing rental housing stock. Adopting Toronto’s Renovictions Bylaw will significantly improve health, social, and economic outcomes for tenants and support the HousingTO Plan.

This staff report has been written in consultation with the Housing Secretariat, Municipal Licensing and Standards, Legal Services and Strategic Public and Employee Communications.