Tuesday, January 22, 2008

Death by a thousand regulations

The $219,000 cost of hiring and equipping two full-time "Property Standards Inspectors for the Implementation of Licensing Rental Properties" for London will be "cost-neutral," according to Orest Katolyk, a London bylaw enforcement manager. Cost-neutral to the municipal government, that is, but not to landlords who would be required to pay new licensing fees to cover the cost of mandatory property inspections, or to their tenants who will have the costs passed on to them as much as provincial laws governing rent increases will allow. Even where tenants are protected from having those costs reflected in their rent, regulatory burdens on landlords such as the proposed item in London's 2008 budget (PDF) constitute a net penalty to tenants by deterring landlords from providing discretionary upgrades when regulatory costs must be assumed instead. Under burdensome regimes, the availability of decent and mid-priced units tends to be sacrificed either for cheap units in which upgrades are kept to an absolute minimum or to luxury units where high prices can absorb the regulatory costs.

In defense of what would be Ontario's first municipal licensing system for landlords, and replacing complaint-driven inspections with mandatory ones, Katolyk offers only the highly anecdotal claim that "tenants won't complain because they fear retribution." Even if that were true in any more than a few cases, other courses of action could be made available to both tenants and the City without applying an indiscriminate punitive levy on all landlords.