Waterloo Downgraded as Investment Choice
May 11, 2011 Jeff Outhit, The Record
WATERLOO — Waterloo has lost its top spot as a place to invest in real estate due partly to concerns over the regulation of rental housing.
A new ranking of Ontario’s leading investment towns downgrades Waterloo to fourth spot, two spots behind Kitchener and Cambridge.
“The new licensing situation is going to have some major unintended consequences on that marketplace,” said Don Campbell, a Calgary-based analyst whose Real Estate Investment Network advises on the best places to invest.
“You’ve made rents more expensive, you have an affordable housing issue. You want to attract students to your city, . . . but you’re not willing to house the students”
A rental bylaw approved Monday is the first in this region. It comes into effect next April.
It exempts apartment buildings, but requires owners of houses, duplexes and townhomes to buy licences costing up to $550 and pay annual fees reaching $300 to rent bedrooms. They must submit to inspections, file plans and undergo criminal record checks. Costs are expected to raise rents by up to five per cent.
Council contends regulation will improve tenant safety and property standards and help preserve neighbourhoods in campus areas.
“I’m not happy with hearing we’ve been downgraded,” Coun. Melissa Durrell said. “That said, I do believe this bylaw is important for the vitality of many of the uptown neighbourhoods.”
The bylaw is supported by some landlords and by university student leaders. It’s opposed by other landlords, realtors and the Ontario Human Rights Commission, which is concerned it may limit housing choices.
Realtor Bill Keay says a client has told him he no longer wants to invest in Waterloo real estate but wants to focus on Kitchener and Cambridge. He expects the bylaw will make Waterloo properties less desirable.
“When you put a tax on something, there’s going to be less demand,” he said. “Gradually over time, prices will go down.”
Waterloo bylaw director Jim Barry understands investors may be anxious. “I can see that uncertainty causing some flux in the market,” he said. He does not expect regulation to damage the rental market.