Mayoral candidates in Sault Ste. Marie agree there are no quick and easy solutions to address the issues stemming from an influx of out-of-town real estate investors who have been buying up hundreds of properties in the municipality over the past two years.
SooToday has been looking into the phenomenon after a number of tenants and local contractors came forward with a series of complaints about property owners and property management companies surrounding ongoing property and rental issues. So far, SooToday has identified well over 300 properties purchased by real estate investors from southern Ontario since 2020, with documents showing that at least a couple of investors are using several companies in order to do so.
But Robert Peace and other mayoral candidates say the municipality can’t simply ban out-of-town companies from coming in and acquiring properties. Peace is proposing a made-in-the-Sault solution, because “just complaining about people from out of town coming in and buying is not going to solve the problem.”
“If we want to take care of our community, then maybe we have to as a society look at investing in our own community or others will come in and do it, and that happens everywhere,” said Peace, speaking with SooToday Monday. “It’s one option to look at, rather than always just looking at the outside investor — how about looking at the investors in our own community to say hey, let’s do something locally.
"Let’s sit down with people who are the successful people in the Sault, and sit down and talk about how can we tackle this.”
Peace also believes that it may be time to review city bylaws and have a discussion about providing more resources for bylaw enforcement in general.
A lack of affordable housing, Peace adds, could be addressed through partnerships between the public and private sectors “where you make it a little easier for the private sector to come in, bring up the quality of the housing stock and then maybe some kind of way to transition the rents.”
But Peace acknowledges that housing is a complicated and nuanced issue to tackle, and doesn't want to label all people and companies owning multiple properties as "slumlords."
“It’s not as simple as just saying, ‘bad guys coming in, buying up everything and leaving them to rot.’ Like, that’s an easy news story, so to speak, for people to think about — but the research [SooToday] is doing, I think, slowly unravels that it’s more complicated than that,” he said.
Donna Hilsinger says the most effective way “protect our real estate from rampant speculation” is to own more real estate locally via the Sault Ste. Marie Housing Corporation (SSMHC), which handles social housing in the municipality as part of the District of Sault Ste. Marie Social Services Administration Board.
“The owning and operating of market rent apartment buildings by the SSMHC has already created a dividend and protected the affordable rents in some buildings around our community,” said Hilsinger via email Wednesday. “Now that we know it works, we should be doing more!”
The next most effective tool at the municipality’s disposal, adds Hilsinger, is bylaw enforcement, which consists of bylaw officers and the city’s legal department.
“Without officers enforcing standards in a timely manner, buildings get worse faster,” Hilsinger wrote. “We have to keep the pressure up on these companies so that they understand Sault Ste. Marie is not a place where they can passively squat on an asset without any plans or action to invest, rent or sell.”
Hilsinger says the city must also ensure that a “robust homelessness prevention plan and team” is in place so that residents are “housed safely and securely in housing that meets their fiscal and health care needs.”
“An expanding stock of vacant buildings, coupled with a growing population of homeless people who have mental health and addictions challenges is not good,” said Hilsinger. “We must work diligently to ensure we are battling the vacancy at the same time as we are supporting the vulnerable. We can and should do both!”
But Hilsinger concedes that the enshrinement of property rights in the legal system makes it difficult for “lower levels of government like municipalities to directly intervene in a property market.”
“The Municipal Act has not been updated to deal with this problem. It is still written as though we are trying to prevent folks from losing their homes versus companies who appear to be squatting on what they hope will be an inflating asset,” said Hilsinger. “Without local RCMP presence to investigate possible money laundering, we are left with a limited set of tools within city departments.”
Matthew Shoemaker says local housing woes are a “big problem” without an easy solution, as the City of Sault Ste. Marie can’t prohibit people or corporations from buying property.
But what it can and should do, he says, is “tighten the screws on these repeat property standards violators and owners that leave properties vacant.”
“We can require, for example, proof of insurance with a high coverage amount. If proof of coverage was not provided, the owners would be charged under the property standards bylaw. This would require the owners to spend money on a court process,” said Shoemaker in an email to SooToday Monday. “We could also change the enforcement of the property standards by-law from a reactive enforcement to a proactive enforcement for repeat offenders/absentee landlords.
“All of this, combined with looking at what other cities are doing with similar issues would tighten the city's grip on these absentee landlord and make it cost them real money to own a house here, which, we hope, will either make them sell the property, or, alternatively, take care of it and rent it.”
Tobin Kern says there have been a number of unfortunate outcomes in the wake of the Canadian housing market becoming an “investment casino for high rollers” — inflated prices, a housing shortage, underutilized housing resources and the potential for “nefarious rental practices.”
He says the “Sault could explore implementing a vacant property tax like other municipalities are implementing, or at least monitor their implementation and outcomes to see if that might be the right approach for Sault Ste. Marie.”
Kern also floated the possibility of a landlord licensing program that would be conditional based on certain criteria such as property maintenance and payment of contractors.
“As part of the licensing, you could include a green-yellow-red landlord status indicator sign that had to be posted at a rental property, including notes about type of infractions,” said Kern in an email to SooToday Tuesday. “This could be beneficial to both prospective tenants and good landlords, with tenants receiving fair warning about their potential landlord’s past performance, and could allow exceptional landlords to charge a little more for their efforts.”
Kern adds that the Sault could look at leveraging some underused property assets to get some units of affordable housing built.
“That effort, along with steadfast public advocacy for more funding for housing from the province and the feds, might get either level of government to want to hitch their wagon to a municipality that’s addressing the issue,” he said.
Mayoral candidate Ozzie Grandinetti initially expressed interest in participating, but did not respond to questions posed by SooToday.