cityscape DineSafe Worked for Restaurants—and It Will Work for Landlords, Too

Renters undergo a slew of background checks before they move into an apartment. Who's checking out the landlords?

Toronto has a food scene like no other. In a city where 51 per cent of the population hails from somewhere else, a cultural synthesis of flavours works to offer the best of everything. Hailed by no less than Vogue magazine as a paragon of cool, it wasn’t always this way. Back in 2000, an investigative series focused public attention on the truly dirty underbelly of Toronto’s (then nascent) foodie revolution: rodent and cockroach infestations, filthy food preparation surfaces, and unsafe food storage and handling. Compliance with health and safety regulations was as low as 42 per cent, and enforcement was opaque. A chronic offender faced almost no penalties: fines were rare, closures even rarer. And the public was kept in the dark.

So Toronto introduced DineSafe. Every single restaurant would be inspected and the results would be made public. A simple “pass,” “conditional pass,” and “fail” rating would be given, and the results would be posted at the restaurant (and later, online).

Predictably, Toronto restaurants objected: the problem was being inflated; it would penalize good restaurant owners as well as bad ones; it would increase costs and harm the city’s evolving food scene. In retrospect, these objections were nonsensical, and the program was implemented less than a year later. The result? Compliance skyrocketed to 90 per cent, individual cases of food-borne illness plummeted, and Toronto has one of the most vibrant food scenes in the world. The DineSafe program became a model for North American cities.

Toronto is again at a crossroads and has a chance to lead on an issue of public health and public good: landlord licensing.

The proposal, recently approved by committee for further study and now proceeding to public consultation, would create a system of mandatory inspections for all multi-unit residential rental buildings with more than 10 units or higher than three stories. A new fee of $12 to $15 per unit per year would cover the cost of hiring the necessary inspectors to run the program. Results would be posted in building lobbies and online. The cost for a 100-unit building would be about $1,500 per year.

Predictably, the Greater Toronto Apartment Association, a group representing Toronto’s landlords, objects. They argue that the system is unnecessary, will penalize law-abiding landlords, and will increase the costs to tenants. Sound familiar?

More than 50 per cent of Torontonians live in rental housing—a number expected to rise as the cost of home ownership moves further and further out of reach for young Canadians. For low- to moderate-income households, the cost of rent can be as high as 70 per cent of their net income. And what do these renters get for that money? A lopsided market with no transparency and little to no enforcement of existing housing regulations.

When you sign a lease a landlord usually requires substantial background information about you: income and employment verification, credit history, references. But what do you know about the landlord and building you’re moving into? Is there a history of rodent infestations? Bedbugs? How well is the building maintained? Is there mould? Once you find out, it’s often too late.

Tenants face a complaint-driven enforcement system that is both underfunded and toothless. The cost of inspections, when they occur, are paid by the taxpayer. And while follow-up inspections are billed to landlords—at an average of $500 per inspection—these are exceedingly rare. When serious violations are found, there are no fines. The only recourse with non-compliant landlords in multi-residential apartment buildings is to seek to prosecute them through the courts—an expensive undertaking, the costs of which are, once again, paid by taxpayers. In effect, landlords are the beneficiaries of a publicly funded regulatory system whose weak enforcement and even weaker outcomes amounts to a public subsidy. The whole thing would be laughable if it weren’t so sad.

How bad is the problem? It’s difficult to say because the City doesn’t collect or analyze comprehensive data, but take a walk through any low-to-moderate income multi-unit residential complex and tenants will point to broken windows; lack of heat in winter; rodent, cockroach, and bedbug infestations; mould; and worse.

The landlord licensing proposal would permit the City to assess the compliance of all multi-unit residential rental buildings on an annual basis. What’s more, it would bring transparency to the residential housing market and incentivize repairs. Landlords that fail to properly maintain their buildings would face not only fines and further inspections, but decreased tenancies as the information becomes publicly available. Instead of a taxpayer funded oversight regime, landlords will be asked to bear the cost of their own regulation—like everyone else. And the proposal will be prohibit them from passing these costs on to their tenants through rent increases.

In tandem with the inspection regime, the proposal would also create a cost-recovery system for repairs—if a landlord fails to take action after repeated violations and warnings from the City, the repairs will be carried out anyway and the landlord will be billed. And that’s where the objections of the GTAA start to make sense. It’s not the $1,500 per year that has them worried; it’s the possible $50,000 bill for mould remediation.

It’s important to remember that landlords are businesses; and in the case of large multi-unit residential buildings, they are typically large property portfolios with investors and governance structures. The property managers, too, are large corporate entities. Both are driven by profit and under the current enforcement regime are not properly incentivized to maintain their buildings for their tenants—low-income Torontonians with little economic power and even less political power.

Councillor Josh Matlow (Ward 22, St. Paul’s), chair of the Tenant Issues Committee summed it up best: “Toronto renters deserve protection from illegal living conditions. Landlord licensing will help ensure that all tenants live in bedbug free homes, with adequate heat and functioning appliances. In short, the basics any resident should expect in exchange for their rent.”

The move to landlord licensing represents a once-in-a-lifetime opportunity for Toronto to use its regulatory heft to drive significant improvements in quality of life and safety for a large number of its residents. We wouldn’t accept a system that only inspected airplanes after they crashed, or restaurants after people get sick. Why do we accept it for our renters?

Yale Fox is the CEO of Rentlogic and managing director of Landlord Watch.