Student rent costs to surge?
Owners face tax hike, insurance woes
By Allison Buchan-Terrell
Although increased enrollment at Western due to the double
cohort will not put a strain on the amount of housing available,
industry insiders are warning of the possibility that rents
will increase significantly over the next few years.
Despite a surplus in available housing, students might see
a rise in rent as London city council announced a residential
tax increase of 10.4 per cent last month.
Scott Chambers, manager of financial planning and policy for
London city council, said the increase is based on an assessment
that re-evaluates the current taxes on residential, industrial
and commercial properties.
“Council is going to work — go through a review — to
bring a lower increase without cutting back on services,” Chambers
said, explaining the increase is subject to change and may
be as high as 12 per cent.
“Anytime there is a tax rate or increase in utilities,
landlords look at cutting operating costs or passing on those
costs, but there is only so far you can go with rate increases,” said
Paul Kappa, president of the London Property Management Association.
Other than tax increases, another problem exists: some student
property owners are facing insurance problems as well.
Mike Baldinelli, a student property owner, said his insurance
company dropped his student rental properties after saying
they no longer covered.
“[The insurance company] said they re-evaluated portfolios,
and anything that was a risk they dropped,” Baldinelli
said. Students were assessed as a risk and the company decided
not to insure them.
Baldinelli called 12 brokers to replace his insurance only
to find the cost was raised from $450 per year to $1,600 per
year, an increase of 400 per cent.
Insurance companies contacted by The Gazette declined comment.
Kappa said the increase in demand expected from the double
cohort did not materialize. He predicted the impact of the
double cohort will be stagger before the full effect is felt.
“I don’t think there will be a problem at this
point,” said Glenn Matthews, Western’s off-campus
mediation officer. He said with a high vacancy rate and anticipated
decrease in enrollment next year, there should be plenty of
Baldinelli is president of the London Student Property Owners,
which formed recently to address the insurance issue. The group
plans to gather 100 to 200 houses in London to lobby insurance
companies and the government.
On Feb. 15, the LSPO will be holding a meeting to discuss
the issue. The meeting will take place at the Jewish Community
Centre at 536 Huron St. at 6 p.m. and is open to anyone interested.