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Feb 5, 2010|Article

Condominium Conversions: A Legal Pendulum

1. Introduction

According to the Oxford English Dictionary, the word condominium is defined as, “1. Joint rule of sovereignty.” By its very name, the concept evokes an inward inconsistency. As opposed to singular ownership and control, condominiums are owned and governed by a collective. Within their very makeup are the seemingly irreconcilable concepts of private and communal ownership. True to form, condominiums also evoke many outward inconsistencies. They are often thought of as a novel method of homeownership as evidenced by the fact that Ontario’s Condominium Act was first passed in 1967. That said, “[t]his system of individual space ownership coupled with co-ownership of common property has a long history; the ancient Hebrews, Babylonians and Romans all referred to it. By the Middle Ages, this unique type of housing had become widespread in Europe.” In addition, condominiums have become an incredibly popular choice of homeownership forming 36% of all new homes built in Canada in 2006. The widespread and increasing popularity of condominium ownership, however, is sharply contrasted with the considerable opposition to converting rental accommodation to condominiums. These ‘conversions’ have been the focus of much study, debate, and legislation in Ontario over the past twenty years. True to their inconsistent origins, despite the frenetic pace of new condominium construction, condominium conversions evoke controversy and opposition.

This contrast is seen perhaps no where in Ontario in sharper focus than in the City of Toronto. Obvious to even the most causal visitor, condominium construction has become widespread. With the push for more intensive land development, condominium living appears to be the ‘new normal’. Somewhat surprisingly, however, the City of Toronto has waged war against condominium conversions. With the increasing demand for rental accommodation, coupled with a traditionally low vacancy rate, and cemented by an unofficial moratorium on private sector rental accommodation construction, the City of Toronto has viewed condominium conversions as a threat to the supply of existing rental housing. Although this opposition has been consistent, the legal ability to oppose conversions has not. In fact, the ability for any municipality in Ontario to prohibit conversions has ebbed and flowed, akin to a clock’s pendulum. At times municipal powers have verged on the omnipotent, at other times they have been in outright doubt.

As background, this paper shall first explore the challenges that have faced the City of Toronto’s rental housing market in order to develop an understanding of the policy considerations opposing conversions. This will then be followed by charting the pendulum’s movement over the past twenty years, examining how the legal ability to oppose conversions has dramatically shifted. This paper will explore the new provisions within the City of Toronto Act, 2006, S.O. 2006, c.11, Schedule A, concluding that the pendulum’s arc has moved to its greatest height. Finally, this paper will discuss whether the current ‘zenith’ or ‘nadir’ of condominium conversions could actually solve the challenges facing rental housing in Toronto, and will then discuss whether further or alternative options are available to both the Province of Ontario and the City of Toronto.

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Robert Mullin