10 Rules of Owning a House

Student housing has been a lucrative venture for landlords for decades. There are estimated to be around 900 houses that are rented exclusively to students and having 4 or more tenants sharing the house. A large portion of these houses are considered by definition, to to be lodging houses, but are not registered. Here is the official definition of a lodging house cording to the City of Guelph:

Lodging House Type 1 means any place including but not limited to a dwelling unit used to provide Lodging Units for hire or gain directly or indirectly to persons and containing 5 or more Lodging Units.

Lodging House Type 2 means a townhouse development or apartment building where one or more dwelling units are used to provide Lodging Units for hire or gain directly or indirectly to persons and containing 5 or more Lodging Units. (Note: this Type 2 use is subject to a Zoning Amendment).

So What’s The Fuss About?

The concern for investors is that the City is staring to crack down on the existence or at least registration of these types of homes.  The main concern has been brought forth by residents who have seen their neighbourhoods become over run with with student housing.  This creates an eye sore during the summer months with over-grown lawns from absentee landlords.  Not to mean the issues during the school months.  Tho address these concerns the City has tried to register these properties so that more control could be attained, however it was quickly discovered that landlords would not cooperate and the logistics of managing the bylaw was costly, so over time it seemed to be abandoned.  Some landlords found loop holes in the bylaw, of which news spread and more student rentals pooped up around town. Today there is very little that the City Appears to be doing to control this, but behind the scenes, there is talking.  Talking has found its way to paper and soon will be law.

What is Happening?

The details have not bee laid out in full or made public (to my knowledge), but what the City is doing is trying to make the registration of properties where the sole purpose of the unit is to generate income.  If there are 5 or more units in one house, then it will be considered a lodging house and therefore be subject to registration. The problem is not with the registration but with the number of unit allowed in a said area.  The current bylaw allows one lodging house for every 100 meters.  There are streets where 50-80% are used for student rentals.  In straight language this means that landlords may be forced to rent only 4 of the 5 bedrooms, and thus lose 20% of their income.  This makes the venture a losing proposition in most cases.  Property values will decrease.

Do you want to know more about student housing is Guelph?  Contact Andrew Somerville at 519-821-7325.

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