# John Orr Tower ­— Queen’s Community Housing

To potential new tenants in John Orr Tower (or An Clachan, or other “core” Community Housing properties), I offer this advice: keep looking.  You can find a better apartment at a better location at a lower price with a landlord who, unlike Queen’s Community Housing, won’t be able to take advantage of you when it comes time to renew your lease.

I’ve been living in John Orr Tower, operated by Queen’s Community Housing, for 2 years, 10 months, and 23 days, as of this post.  I’ve served over that period as the building representative for Community Housing, and as such I have some notion of the planning and internal decisions made behind the management of John Orr Tower (and other Community Housing properties).  That position carries no actual weight towards any decision—meetings are entirely a one-way source of information from Community Housing to representatives.

Up until about a year ago, I was relatively happy living in the building; I have a decent view of Lake Ontario and Wolfe Island, there’s a bus every 15 minutes to main campus, the apartment isn’t too expensive, and the walls are thick so I’m never bothered by neighbours.

But during my time here things started changing, in part due to larger Queen’s fiscal problems.  Community Housing stopped treating its properties as a benefit to students, and started trying to extract as much money as possible from students, while being as cheap as possible on building repairs and upgrades, lying to tenants (and myself, the “representative”) about changes, and using its status as a university to exploit legal loopholes regarding rent termination and increases.

## Rental termination clauses

Community Housing has made no effort to hide its exploitation of Ontario’s exemption for universities from many of the rules in the Ontario Residential Tenancies Act (RTA).  Rent increases, for example, for an existing tenant in Ontario are limited to annual published guideline amounts, which are based on inflation.  (“Guideline” is a misnomer: these are rent increase limits).  The RTA, generally quite favourable to tenants, also specifies conditions under which tenants can be evicted, preventing landlords from arbitrarily kicking out tenants without significant justification.  It also specifies that tenants automatically move to a month-by-month rental basis at the end of a year’s tenancy.  Termination clauses—that is, agreements by both parties to terminate a lease at a given time—are void if agreed to (or required) when the tenancy agreement is entered into.  (Unrelated to this post, but near and dear to my heart, the RTA also declares “no pets” clauses void).

All of that about rent increases, termination clauses, etc. is fine and good, of course, until you notice this little gem:

Subsections (4) and (5) [the clauses declaring termination clauses void] do not apply to rental units occupied by students of one or more post-secondary educational institutions in a residential complex owned, operated or administered by or on behalf of the post-secondary educational institutions. 2006, c. 17, s. 37 (6).

I understand the theoretical reason for this exemption: without it, someone who was once a university student could stay around in a university-maintained building indefinitely.

In practice, however, it lets Queen’s ignore all the legislation about rent increases, eviction rules, month-to-month rentals, and a whole lot else: because termination clauses are automatically and universally added to every Community Housing lease, Queen’s Community Housing has the option of increasing rents by arbitrary amounts, for not renewing a lease for any reason it sees fit, even if such renewal would be prohibited by the RTA.  It also allows itself to require new 1-year leases at the end of a year, even when it is the same tenant staying in the same apartment.

Moreover, it also completely circumvents the usual renewal process.  For a normal apartment that the tenant has been in for at least a year, tenants can give two months notice of leaving; thus they can look around for apartments that they have a chance of actually taking before having to give notice of moving out.  Community Housing, on the other hand, forces tenants to sign lease renewals more than 4 months before the end of the lease (this year, for instance, lease renewals happened in March, for a leases renewing on September 1st).

The thing is, what Community Housing uses aren’t really termination clauses, that’s just what they call them to satisfy the RTA’s legal loophole requirements.  I’ve now had three separate leases, for the same apartment in the same building, with the same termination clause.  In that time, my rent increased by 2.4 times the guideline increase in 2011, and more than 7 times the guideline increase in 2012, and would have increased by double the guideline increase had I renewed my lease.  My lease didn’t terminate in any meaningful way: it simply continued with a new 1-year lease at whatever rent Community Housing decided to ask for.  The presence of termination clauses in every lease is mainly about giving Community Housing significantly more ability to increase rents and force longer leases.

Queen’s Community Housing exploits this legal loophole to the maximum extent possible: while other landlords are unable to evict (except in egregious cases of misbehaviour), unable to increase rents beyond inflation, and unable to force tenants of more than a year to renew for more than month at a time, Community Housing gets it all.

The thing is, Community Housing doesn’t have to operate this way, even though the law permits it.  They could, for example, make the termination clause based on student status.  They could voluntarily commit to guideline increases for renewing tenants.  But they don’t: there is more money to be made by being allowed to act like just the sort of landlord the Ontario RTA was designed to protect tenants from.

## Rent increases

When I first came to Queen’s (and John Orr Tower) in September 2010, my rent for my 1 bedroom apartment was $673/month, plus$40-something a month for parking.  That was a decent price: the location isn’t great, but it’s close enough (about a 20 minute walk, or 5-20 minutes if I take a bus) to campus that it worked.

In discussions that year, Community Housing revealed that because the university was in bad financial shape, it was squeezing every area to cut costs and increase revenues as much as possible.  Thus they decided to increase rents, particularly for west campus properties (John Orr Tower, my building, and the nearby An Clachan complex) “to market value.”  In order to determine what the market value of a 1 bedroom apartment was, they turned to the CMHC housing survey, and determined the target market value to be the average of similar apartments (i.e. 1, 2, or 3 bedroom apartments) in the CMHC housing zone.

## Summary

I used to be positive about John Orr Tower; it wasn’t that close to campus, but it wasn’t too far either, it was reasonably well maintained, and rent was decent for a 1 bedroom apartment.

I no longer feel the same way.  The distance hasn’t changed, but bus options have become worse.  Where there used to be a city bus that stopped in the mornings at about 8am, the nearest bus stop is now a 5 minute walk away.  The nearby shuttle bus had its hours (but not its price) cut as of May 1st.  Parking isn’t included in the rent, which seems ludicrous given that the nearest grocery store is 2km away (even the nearest convenience store is about 1km away).

Serving for 3 years as the building representative has made me realize how Community Housing’s priorities have changed: it no longer attempts to provide good housing at a decent price, it no longer maintains any façade of trying to break even.  Instead the new Community Housing is all about extracting as much as possible from the students living in it, while being as cheap as possible in maintenance and repairs.

To new graduate students coming to Queen’s, while once I would have recommended John Orr Tower without reservation, I now offer the advice I started this article with:

Keep looking.  You can find a better apartment at a better location at a lower price with a landlord who, unlike Queen’s Community Housing, won’t be able to take advantage of you when it comes time to renew your lease.

## Aside: Rents, economics, and all that

As an economist, I am generally in favour of prices reflecting market value.  The undergraduate, first-year textbook justification is that increasing prices serve as a signal to potential entrants that there are profits to be earned, which should (over some definition of “long term”) induce entry.

Similarly, in a perfect world, termination clauses should be perfectly acceptable: no one would agree to them if they aren’t worthwhile, and competition among landlords would either reduce prices or reduce the incidence of termination clauses, or both.

Renting an apartment really isn’t like buying bread at all: I’m stuck with my choice for a year.  All sorts of things can go wrong in that year (see later in this post), but I’m still stuck there.  At the end of the year, I can choose to move, but only at significant moving cost; even if faced with a 10% increase, many of us would choose to stay in our current apartments rather than go through the hassle of moving.

The problem is that the relationship between landlord and tenant is not equal: landlords generally have an ability to extract more surplus from tenants than tenants have to extract surplus from landlords.  An example can help illustrate one reason why rental increase limits are useful.  Suppose that moving will cost me about (in terms of direct cost—boxes, truck rental, etc.— plus indirect costs—such as the value of my time) $500, or a little over$40/month spread over a year.  Also suppose that rental prices are increasing by 2% per year, and that my current rent is $750/month. An opportunistic landlord (without legislation limiting rental increases) would then offer me a lease at the market price,$765 ($750 plus 2%), plus just enough to prevent me from moving, i.e. about$40, for a total rent of $805. I can either agree to that, or leave, finding an apartment for the market rent ($765), but paying \$500 to move.

Legislation like the RTA is designed to prevent that, and other abuses, by providing a stronger bargaining position for tenants.  Tenants and landlords aren’t prohibited from mutually agreeing on an above-guideline rent increase, or from agreeing on a new rental term (i.e. first terminating the current one), but the landlord cannot force either on a tenant: presumably the landlord would have to offer something of benefit to the tenant in order for the tenant to agree to the changes.  It’s legislation like the RTA that helps tilt a landlord-favouring “free” market back towards equal footing between buyers and sellers.

The problem here, with Community Housing, is that by allowing universities to include a termination clause (which non-university landlords can’t use), the RTA undoes all the bargaining power it is designed to impart to tenants, and the end result is exactly what you’d expect: the landlord uses its power to extract as much as possible from tenants, and tenants have no ability to avoid getting screwed other than moving away (but they can only do that once per year).

## One thought on “John Orr Tower ­— Queen’s Community Housing”

1. Elena says:

Just want to thank you for this post. I’m facing the difficult issue with looking for apartment for September 2015 when I start my graduate school and being international student doesn’t make it any easier.Thanks for detailed information.