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This episode of the Sync or Swim Podcast is incredibly exciting as we are joined by Rentsync’s CEO, Max Steinman, for the very first in-person episode! Tuning in, you will hear all about the amazing changes that have happened at Rentsync over the last year, namely the integration of ChatGPT, before we delve into how AI impacts the housing industry as a whole. We discuss how Rentals.ca has evolved, its new network, Rentsync’s tours module, and so much more! Next, Max shares his wisdom about the supply issue in the housing industry, what’s causing it, how to get rid of it, and why rent control is a huge issue. Financialization, according to Max, is just another word for capitalism, and in this episode, he tells us why we shouldn’t demonize it and why rent evictions are a problem. Finally, we end on a positive note as we discuss how commercial space is being transformed. Thanks for listening in!
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Links Mentioned in Today’s Episode:
“We've also continued to go down funnel with our offering, so we've always been looked at as traditionally a list to lead service. We have tons of tools that make advertising more efficient and effective, so GPT plays into that.” - Max Steinman
[0:00:30] ANNOUNCER: Hello, and welcome to Sync or Swim, a weekly podcast brought to you by Rentsync, where we take a deep dive into the prop tech, multifamily, and the rental housing industry. In each episode, we uncover the technologies and strategies used to help overcome operational challenges and increase the value of your multifamily investments. Let's get into our conversation today.
[0:00:42] MH: Welcome back to another episode of Sync or Swim, the podcast where we take a deep dive into the multifamily, prop tech, and rental housing industry. I'm happy to be joined in person with Max Steinman.
[0:00:55] MS: Thanks for having me back on the show.
[0:00:57] MH: In person, first live podcast, for anyone listening audio. Go to YouTube, check out the full clip. But we're filming in Toronto today. It's a beautiful sunny day. Happy to have our CEO onboard.
[0:01:11] MS: Yeah, thanks for having me right here in the head office. This is experimental, but I think it should work out, and hopefully, we can start bringing a video format to this podcast on a go-forward basis.
[0:01:22] MH: 100%. Very excited. We're back after a little spring break, a little hiatus. Wanted to bring Max on. It's been a while since you've been on the podcast, a little over a year. I know a lot's changed with Rentsync, the rental housing industry. I know you've got a lot of thoughts and opinions, so we wanted to have you on to discuss a lot of changes. First and foremost, let's start with the tech side of things. Rentsync is a leading player in the prop tech game. We have a very innovative platform. We've made a lot of changes over the year. Why don't you take us through some of the exciting changes that have happened at Rentsync?
[0:02:02] MS: Yeah. Where do I start? Maybe with acknowledgement that you called me opinionated. I agree. I agree. I'm opinionated. I'm excited to share my thoughts and opinions on the podcast today. Rentsync's had a fantastic year. We've had some really awesome and recent announcement to our platform, one of them being ChatGPT. We've been working on our brand from a rentals.ca perspective, really working at growing that brand across the country. We've had a lot of effort focused towards that. We've continued to focus on bringing a better customer experience forward for multifamily marketers just in general throughout all sorts of tweaks and changes to the product, but also to our team to provide better customer service.
[0:02:53] MH: Let's go back to the one point you just made, ChatGPT. We've talked about it on the podcast a few times, with our friends at Main Streets. It's a big topic right now. It's impacting many industries. We like to see it as a positive. As you mentioned recently, we've integrated with ChatGPT. Why don't you take us through a little bit more about that and how it can affect some of our clients, future clients, and how it can make life a little bit easier for property managers?
[0:03:22] MS: I was very much encouraging of our platform team to be at the forefront of the industry on this. It's one of those trendy topics. There's been many in the last few years, whether it's crypto, or blockchain, or NFTs as a tech company, as those things are coming at you, you need to evaluate them and think, what is applicable to our business and should we jump on that bandwagon? With GPT, it was the first time where the answer was absolutely. It was just so immediately available. We heard almost right away from our own clients. As you mentioned, we had Main Street on the podcast, four or five weeks ago that came out now. Great episode, by the way. Shout out to Addie and the team over there. Go check out that episode if you've got a little bit of time.
We started to hear from clients right away. They're using GPT. That's a signal. We have to look at this. We have to figure out how to incorporate it into our product. Validating with customers, figuring out how they're using it, how they think it's going to be used in the future. Immediately, the first and easiest and most applicable use case was in the creative space, helping to write property descriptions. We looked at what we have in terms of data in our platform. We have all the amenities, we have the pricing, we have the area, the neighborhoods. We thought, why not create some automation with leverage GPT's power and allow that to augment the average marketing manager, marketing coordinator to more efficiently write property descriptions, perhaps more effectively as well.
Not to replace, but to just provide a faster, more effective way to bring a really quality property description forward. That's where we're starting with it. Full integration, you won't have to log into GPT separately. You'll have access to this right in the back of the platform. You'll be able to generate property descriptions using your own data and some additional prompts to create these gorgeous, beautiful property descriptions. I've tried it a few different times and the results are honestly incredible. I'm really excited for that to be unlocked for our clients and for them to start using it.
[0:05:48] MH: That's pretty much in beta stage right now, right?
[0:05:50] MS: Yeah. We're just taking on our first couple beta clients. Honestly, we should have this out in three to four weeks to a wider audience. Maybe even by the time this podcast episode does air, hopefully, we've got more and more clients on there.
[0:06:04] MH: Yeah, it's very exciting. Rentsync aside, what are your thoughts on ChatGPT in general and AI and maybe how you see it impacting other aspects of the rental housing industry?
[0:06:16] MS: It's hard to say, it's evolving very quickly. I think the immediate application is more on the creative side. That doesn't necessarily just lend itself to marketers. It could lend itself to leasing agents as well and how they craft emails and lead nurturing through their sales processes. At the end of the day, it's probably not going to throw the entire rental housing space for some massive 180, or loop. It's not going to be that disruptive overall here in the next year or two. We don't quite know where it will go. In the next year or two, it's more about augmenting the functionalities that are out there now. Not on the end of this. Just because Rentsync is at the forefront, and one of, if not the first prop-tech company and multifamily to have an integration with ChatGPT, doesn't mean that we're all in on thinking that GPT is going to replace everything. That's not really our theory right now. We just want to bring the most useful tools to our clients that we possibly can.
[0:07:26] MH: Very exciting. As Max mentioned, this podcast will be out in a week or so. Hopefully, we're a little bit farther down with the ChatGPT integration. If you go to rentsync.com, there will be a place where you can inquire about how you could possibly add that to your platform. Definitely check that out. Moving on, you mentioned another very exciting, major achievements in the company. That's really the growth of the rentals.ca brand. We hired a brand ambassador, which I'll let you discuss a little bit more, but yeah, take us through the evolution of rentals.ca over the past year.
[0:08:02] MS: Yeah. I mean, rentals.ca for the last four or five years has been this growing organic brand in the country. I think it has been the leading brand in terms of ILS’s rental listing sites. But it hasn't taken that quantum leap to become a household brand name. That was our goal this year in 2023. It was, let's turn rentals.ca into a full-blown household brand. You're here in Canada and you think of household brands. You think of La Bloc Corporation and Shoppers Drug Mart, and you think of also, La Bloc Corporation. You think of Air Canada and you think of TD and Scotia Bank. When you stop people on the street and you say, “Hey, name the biggest pharmacy in Canada,” they say Shoppers Drug Mart. You stop people saying, name the biggest airline in Canada and they say, Air Canada. That's our goal. we're starting to do a lot of brand surveys like that. We are in that lead position right now, but creating that delta, and creating that gap, where it's just so obvious to everybody. That's where it's moving. There is brand recognition, but it's taking that next step.
We brought in a brand ambassador for the first time this year, that's Jack Armstrong, Voice of the Toronto Raptors. Very beloved character in Toronto, but also nationally. Really nice guy as well. Had the benefit of going for a lovely dinner with him downtown in Toronto a couple of weeks ago and shared some great conversation and laughs. He really believes in his vision as well. We've put together a number of television commercials, YouTube commercials, and received unbelievable feedback. I think one of our YouTube videos is well over a million views now. This is all coupled with out-of-home advertising and offline marketing initiatives, such as billboard advertising. We've hit Toronto pretty hard, and we're going to hit a lot of other cities in the coming months during rental season. It's all about building up those brand impressions, which is a little bit of a deviation from our more traditional strategy of digital, which we're continuing on really heavily, but building a brand goes beyond Google search. That's what our focus is on now. I think to our clients and to the renters out there, they're going to see this quantum leap this year, or at least that's our hope. Imagine, we're going to play a big part in that as well. We're excited for that.
[0:10:34] MH: Max buried the lead there a little bit, too. He does a really, really good Jack Armstrong impression. I don't know if you want us to unleash it right now, but maybe if you ever cross paths with him, he can bring it out for you.
[0:10:44] MS: I don't know if anybody does a good Jack Armstrong impression. But he does the, well, I do that, “Rentals.ca.” That's as good as it gets.
[0:10:54] MH: We'll take it. We'll take it. Now, those were two really good achievements for the company in the last year or so. Thinking a little bit broader, what are some other trends, or anything that you're excited about, or have your eye on for the company the next year?
[0:11:12] MS: Yeah. This is all in coordination with a launch of what we call the rentals.ca network. That's taking a number of sites across the country and creating packaged listing services that you can buy together, what we call a bundle. Our sales team says, “Bundle up.” That's in coordination with this on the B2B side. In the US, the ILS space is quite consolidated. There's three or four leading brands, and under those brands are networks of several listing sites. That's essentially where we're bringing it now. We have five or six different listing sites that are really strong in certain markets. Lewe.ca out on Quebec, literally translates for those who aren't bilingual, including myself, translates to rentals.ca, essentially, in Quebec. Then we've got RentFaster out in Alberta; has pretty much been the market leader in that, in both Calgary and Edmonton for the last decade. Including RentBoard as well, which is a really great rural brand. A lot of roll markets still use RentBoard. Torontorentals.com and RentCanada, which has always been really popular in Winnipeg, right in the center of the country.
Bringing all these together to create a national listing site network and bundle package, that's something that's going to be a huge part of 2023 for our growth and a really great value proposition for our clients and how they buy advertising. Look out for that. We're very, very excited about that initiative. It all comes under that umbrella of creating this unified household brand under the lead brand, which is rentals.ca. Definitely, that's probably the other huge factor out there, or a huge thing to look out for.
[0:13:06] MH: Would you say there's anything else on more of the Rentsync platform side that you'd be letting people know to keep an eye out for?
[0:13:13] MS: Yeah. I mean, we've also continued to go down funnel with our offering. We've always been looked at as traditionally a list to lead service. We have tons of tools that make advertising more efficient and effective. GPT plays into that. The fact that you can control your ad layouts, your listing layouts within the platform. Syndication has always played into that, moving to a faster syncing as well is something that we've been doing. We're also going down funnel past the lead. We just launched a phenomenal tours module, really took a step forward. We had one, but we just relaunched it. Of course, it's Google and Outlook Calendar, synced and integrated. Just the workflow that this has been providing to the first few clients who are on it, we're getting tremendous feedback. We're going to continue down that funnel, which means next step after poking a tour is applying, next step after applying is online, or digital leases, security deposits, first and last month rent payments, and eventually, into resident portals as well.
That's where we're heading. It's the right strategic direction for us. We'll continue to make strides towards that in 2023. It's really important for us strategically, we do it in order. We tend to find, we have a lot more success when we do things in order, first out of order. But it's also tough, because we get a lot of inquiries and clients who want us to do specific things now. In order for us to deliver a really good package, we have to move in order for sure.
[0:14:56] MH: On the tours note, we actually have a webinar later this month where our product team is going to walk us through the new tours booking app. If you want to sign up for that and learn more, there's a spot on the Rentsync website where you can register for the webinar. Definitely check that out. If you don't get a chance to, we will offer the recording afterward. Stay tuned for more on that. It is a very exciting app. As Max says, it's been in the works.
[0:15:20] MS: Yeah, it's kickass. It's honestly kickass. The product team did a wicked job on it. Even if you have something now, you should go just check it out and benchmark it against this, because I think it's probably the best in Canada for sure for this purpose.
[0:15:33] MH: Yeah, definitely check that out.
[0:15:36] ANNOUNCER: Like what you hear so far? Make sure you never miss an episode by clicking the subscribe button now. This podcast is made possible by listeners like you. Thank you for your support. Now, let's get back to the show.
[0:15:51] MH: Now we want to move on to some more industry related questions. As I mentioned off the top, it's a podcast that talks about the rental housing industry. I know you're very opinionated when it comes to this topic. You're a little outspoken on social media, but that's just because you're really passionate about the industry and you want to see positive changes happening. A lot of people throw this word around; housing crisis. Really, as we've talked about on this podcast over the past few months with guys like Tony Irwin from FRPO and Peter Shawn Taylor, who came on and really shed some light onto some of the issues going on. It's a supply issue, first and foremost. We're experiencing a bit of a supply issue in major markets, really across Canada. There isn't really a major market that's not experiencing a slowdown with supply. When you hear that, what do you think about, or when you're talking with clients and colleagues, how do you start the conversation with why we're facing a supply issue and how you can see us getting out of it a little bit?
[0:16:54] MS: Yeah, and it's something that I've changed my opinion on through the last two years. The word housing crisis, I actually didn't really believe in that for a period of time. Maybe that was me being naive. Or, it's the definition of what is a housing crisis? I do think we're in a crisis state. Maybe not full-blown yet, but based on what's happening, we're well on our way to a very large problem. As you said, every major Canadian market, even in rural markets secondary and tertiary markets are going to a place that is not sustainable, not affordable. The reason I've changed my mind and I actually do call it a crisis now is because it's a policy crisis. The policies that are in place today by all three levels of government have created a crisis. That's the crisis part. I do think it is a crisis now. There has been a slowdown in supply, which is extra scary because that is the exact opposite of what needs to be happening.
We've got a total ramp-up in immigration. We had immigration and population growth last year that was the highest in the G20 and outpaced most developing countries. We all understand economically why the government, the federal government is looking to do that, but to not match it with a serious national housing strategy and to not have all levels of government aligned, that's the crisis part. It's a disaster. You can't already take a market that is unbalanced with a supply deficit, add a million people, and expect that things will just work itself out.
What's causing it to be more specific about policy is that housing developers, whether it's for sale, purposeful rental, condominiums, subdivisions, they can't make enough projects feasible. When I say feasible, they can't make the numbers work to attract the investment. They can't do that, because 30% of the costs that they're facing on average are development charges and taxes. Interest rates have risen so far as well in such a short period of time that they cannot make the performers work. They just can't make it work. Otherwise, they'd be doing it. They'd love to do it. Believe me. All of our clients would love to be developing more housing right now, but they can't make it work. The reality is everybody looks at rents and they go, “Well, with rents rising 20%, 30% in some areas, how does that not make the numbers work?” The reality is 20%, 30% is nothing compared to the level of increase that they've experienced on the taxes side, on the development costs side, capital cost develop, construction costs, and the financing costs have gone up way more than 20% to 30%.
Going from interest rates where you get financing 2% to financing of 5% is one more than a 30% increase. These performances just don't work. They don't work. There's not enough margin. You can't force private developers to do things that don't financially work out. The fact that the public sector and the government has been so slow to respond to those changing economic environment is the reason that now we're facing a slowdown in supply when there's a huge increase in demand. That's the scary part. That's the crisis part. Then you start getting policymakers who don't quite understand the situation but look at it at face value, and that's where you start to hear a financialization of housing. You start to hear calls for more rent control and things that actually run counter, higher development charges. Things that run counter to the private sector being able to create feasible projects and deliver more housing. That's my thoughts at a really high level. That's the problem we're facing right now. I think, Tony Irwin, when he was on, described a similar scenario, and he did a really great job of doing it as well. Shawn at Urban Nation really has a strong understanding. The people who are fully understanding of the situation and study this, we have to look towards them for leadership and guidance and carry their message forward to try to help educate policymakers, but also just the general population.
[0:21:53] MH: Now, you said that's high level. Let's dig into it a little bit more. You touched on two things there that we're going to get into. I’ll let you decide which one you want to talk about first. That's the concept of rent control and this ideology of financialization. Both are problematic in their own rights. Financialization is really people pushing that ideology. They're really demonizing the REITs out there and the private sector of the rental housing industry. Then rent control is just misunderstood for many different reasons, and not everyone understands the consequences of it. Both you mentioned there. I'll let you decide which one you want to talk about first. But yeah, let's dig into those a little bit more.
[0:22:41] MS: Rent control, why don't we start there? The challenge is I don't blame anybody who's a renter, or somebody who's not in this industry who looks at rent control and says, “That's a good idea. Why not even ramp it up?” Rents are rising. Renters are vulnerable. Most of the working-class folks in Canada are renters at some point. Why not ramp it up? Maybe even talk about rent registry, which controls how much rent can go up when you actually have a turnover unit. I don't blame them. They're out there trying to protect renters, looking at the situation in a hole going, this is unaffordable. But either they just haven't had somebody properly explain it to them, or they just don't know. Or they haven't sat down and really looked at it. It's essentially a paradox and that's why I don't blame them. It's hard to understand if you're not thinking about it all day and you're not living in it. Then explaining it to them in a concise way is also really difficult. The real challenge with it is the paradoxical called nature of it. We've had inflation now that arguably has been 10%, 7% to 10% over the last 18 months.
In-place rents have rent control in most major Canadian cities and have only been allowed to increase 2%, 2.50% in some provinces. You have this growing delta between in-place rents, people who signed leases four or five years ago, and market rents, people who have units where somebody's moved out and that landlord has the opportunity to put the unit on the market. That delta exists because the landlord's costs have all gone up. There's a huge surge in demand, immigration, unaffordable housing market, for-sale housing market, keeping people in the rental space. Landlords just do what any business owner would do, which is charge what the market can bear. That's just a standard economics principle. You charge what the market can bear. The market can clearly bear 30%, 40% increases in some markets. That's normal. You can't blame the landlord. Just doing what they do. They're doing what any business would do. The reason that you have this huge supply issue, it's not even vacancy-driven. Vacancy's been low for a really long time in Canada. The last two decades, vacancy has been unbelievably low in the rental housing space.
There was a bit of a spike during COVID, but that was just artificial. There's no supply because there's no turnover. There's a massive delta between in-place rents and market rents. If you're renting a place in Toronto, downtown, and you're paying $1,800 a month for a nice one-bedroom and a purpose-built rental, and you've been thinking about moving to the east end, you've got more friends and family out there and you're checking out some of the places online, hopefully, rentals.ca. Everything's $2,700, but you're locked in at $1,800 and you're rent controlled and worst-case scenario, you're going up two and a half, 3% a year, you're not moving. If you're not moving, that means your unit's never hitting the market. Somebody who's looking for that downtown space, that's one less opportunity. There's just not enough movement in the market and rent control is creating that scenario. It's very paradoxical. It's actually creating the problem. I don't think it's easy for people to understand that.
I also think that people think in the now and what works for them in the next year, or two years, or even three years, it's pretty radical to say, scrap all rent controls. Your average renter would be like, “Hell, no.” And I get that, too. Scrap all rent controls and see what happens in five years, seven years, eight years to housing supply, turnover, investment dollars coming in for additional developers. It would be amazing, but who wants to sacrifice those next two, three years where it could be really, really painful and there could be some serious consequences to that? It's a very hard policy to unwind. Somebody very, very smart has to figure that out.
[0:27:27] MH: Yeah, that's really good. I think a lot of people don't realize that rent control is actually affecting supply. A lot of people, I don't think – like you said, can't blame the renters for not thinking that way. They're not developers, but it is the way it's going right now. It's a little bit unfortunate and there's not going to be an overnight solution to it. It's going to take a little bit to unwind. Are there any other countries, or other areas that you've seen success with rent control, or the opposite that have seen success with no rent control?
[0:27:57] MS: Rent control, it's a consensus among all economists that rent control has negative consequences in the long term. There's no market I'm aware of on earth where rent control has worked out where the renter actually wins in the long run. It always comes back to hurt the rental industry from the renter's side. Quite the opposite, there are markets in Canada that don't have rent control and have some of the most affordable housing situations, Alberta being one of them. You just have to look at the supply-demand, and it's healthier. It's much healthier. Things have even tightened up there, but you're still looking at 3% to 4% vacancies, not sub-2%. There's still healthy turnover. That's a dream here. That's a dream in Ontario and a dream in BC. I don't know why we can't just look to them and emulate the policies, but it's a good place to start, I guess.
[0:29:01] MH: Definitely. Now you touched on one other thing there. The renter is losing in the long run, because of rent control, which is supposed to in theory, help them. Another topic that we just talked about, financialization, is something else that is being proposed, taking away the private sector, putting the onus more on the government to provide affordable housing. This in theory is supposed to help renters in the long run, but there's many reasons why this idea won't help them. That's a lot to unwind there. Let's start a little bit at the beginning with financialization. I'm going to read you a headline. “Financialization, the battle over the future of rental housing heats up.” When you hear that, what are your initial thoughts on the idea of financialization?
[0:29:47] MS: I don't know if it's an idea. I think it's just a synonym for capitalism. But as you put it, it's got a connotation that's demonized. Of course, housing as an industry and rental housing in particular is financialized. Of course, it's a free market somewhat. Of course, you got things like rent control. That's how industry works. We do live in a capitalist society. Probably not one of the freest markets in the G20, but a pretty free economy, free-market economy in general in Canada. Probably taking some steps back in the last decade or so in terms of all of our industries, across all of our industries, and how free market we are. But comparatively to the rest of the world, free-market economy. The things that we love about living in a free-market economy and living in a capitalist society, high standard of living, high life expectancy, average life expectancy, great level of happiness and entertainment and lots of awesome things that we can do on the weekends. Safety. We have these things because we have a strong business environment that creates wealth.
It's actually scary to hear people say, “Oh, well, maybe housing shouldn't be so financialized.” I don't even know what that means. There are examples of times in both Canada, but in other economies where housing has become more public, or there's been an attempt to make it more public and that has just never worked out. It's absolutely insane. Just look at Toronto Community Housing. Look at a lot of the community housing programs across the country, they're very rundown, they're very inefficient. They're the recipients of some of the worst criticism, even from the very same people who are demonizing the financialization of housing. It's just not appropriate to think that we can have this fundamental shift towards more and more public housing. That's just not a good idea. That doesn't mean we shouldn't have affordable housing strategies, but it needs to be facilitated in partnership with the private sector. Otherwise, you're just looking for essentially, a disaster.
That's my thoughts on it. I think we have to be very careful not to demonize the very industry that we need to partner with in order to avoid a total, total housing crisis. These are our friends. These are the people who give us any hope of pulling ourselves into a balanced market again in three, four, five, six, seven, eight years. However long it takes. If and when we get there, it's going to be because of the private sector. They have the right to earn profits. The other funny thing about it is, everybody always gets upset at large corporations. A lot of these REITs, some of these are public REITs. The owners of the REIT are the public. These are publicly traded stocks. They exist in people's mutual funds. The middle class, in many ways, owns these corporations and benefits from them profiting. It could be easy to demonize corporations. At the end of the day, they're just creating wealth in the economy that flows back in.
[0:33:12] MH: It's very well put. When I think a lot of people don't realize either, well, you mentioned a little bit, Toronto housing, community housing. There's really bad examples out there. You can just search them of how it's collapsed, really these buildings have collapsed. On paper, it might make sense. Sure, let's take away the for-profit. Let's let the government build affordable housing. As you mentioned, it's these REITs that have the capital that are going to maintain these buildings. They're going to actually invest money into it. People want a nice place to live. They're the ones that are going to renovate when somebody moves out. They're increasing their portfolios’ worth, but they're also increasing the living conditions. That's what I think a lot of people don't understand when they think about, “Oh, government-funded housing, sounds great on paper.” But in reality, I don't think it's ever worth anywhere in the world. I can't point to one example.
[0:34:06] MS: Probably not. Challenge you to point to an example and send Matt a message. It's funny you mentioned renovations as well. There's a trend going on right now in the industry where, well, there's the Toronto mayoral race going on and a huge topic, but this is across the country as well, is the concept of rent evictions and how do we protect tenants from rent evictions? It still leads back to supply. The reason that rent evictions are on the rise is because landlords are stuck in a position where they have tenants who have signed leases five, seven, eight, 10 years ago, have only been able to raise the rent to two and a half percent a year, while all of their costs, their energy costs, their water and waste costs, their maintenance costs have all gone up 30%, 40%, 50%, their taxes. A lot of these people are just small business, or mom-and-pop landlords. They rely on this income to put bread on their table.
Of course, if they're not able to charge a reasonable rate, they're looking to try to replace the tenant. It drives a wedge that rent control issue. Once again, it drives a wedge between the best interest of the tenant and the best interest of the landlord. It's just not natural market dynamic. Normally, you're out there trying to, in most industries, have a good customer service experience with your customer and retain customers. When you have these counterintuitive policies, like rent control, it actually does the opposite. It's like, “I want to be a bad landlord. I want my person to just move out. I don't want to have to do the rent eviction thing if I don't have to. Let's just be such a jerk that the person eventually moves out.” That's the best-case scenario. Worst case scenario, “Okay, I'll renovate my kitchen and my bathroom and main floor and we'll get this personality here.” That sucks. It sucks for everybody. These policies are leading into their next problem that they're trying to solve for now. It really is this cascading effect.
[0:36:17] MH: Yeah, not really good for anyone, is it? Now, there's a lot of people fighting the good battle for us right now. Our friends at FRPO, Tony Irwin, friends at CFAA, John Dickie. We're recording this May 4th. May 9th, there’s supposed to be a hearing and they're fighting the battle for us. If anyone's interested in voicing their concerns about financialization and this battle between the federal housing advocate and the private sector, there's some places on there. If you go to FRPO's website, CFAA, where you can join the battle, leave your opinions. That's going on as we're recording right now. Stay tuned on that. Good luck to those guys. We love them. Hopefully, we can keep fighting that battle and make sure that we're not seeing any more negative feedback from the federal housing advocates. Moving on to a more positive note, I think there are some things going on in the industry that are trying to maybe not solve the housing crisis but steer in the right direction. I know we've talked offline. There's been a few interesting, innovative trends that you've been seeing that are helping solve the supply issue. Why don’t you take us through maybe a couple of those that you've seen recently?
[0:37:35] MS: Yeah, for sure. Maybe just a second before jumping into that, I think it's important to establish why I'm passionate about the supply crisis and the policy crisis and why we care so much at Rentsync and rentals.ca. We are biased towards it, but we're very aligned with both the renter and the landlord. We're biased, because our job is to facilitate and market the transaction of rental housing. To watch that stifled generally by bad policy is bad. It's bad for the renter and it's bad for the landlord. I don't know a happy person on either side right now. It's also bad for us. It's a bad for us. We want there to be more movement in the market. We want there to be more opportunity to create unique marketing experiences. That's a challenge for us for sure.
Moving on to something positive, one thing that we're seeing is this transformation of the commercial, particularly office space occurring right now in the real estate market. Obviously, that goes in line with what we experienced with the pandemic and this remote work environment that has been created in a huge portion of the economy. We're seeing record high office vacancies across the country. There was a report today that came out in stories, stories.com, I think it is, that there are 25,000 office buildings across Canada, Canada alone, that have the potential to be converted to purpose-built rentals, or residential. We're already seeing certain municipalities get pretty aggressive around this. One is Calgary. Once again, a beacon of a good example, basically, for the rest of the country to follow. They set a goal as a city to convert 6 million square feet of office space to rental housing. I think that was in a three, or four-year stretch. They're probably going to ramp that up from what it looks like. They're already halfway to their goal. It's really impressive. They're putting these great incentive packages in front of private developers to come in and do these conversions and make them feasible. It's very forward-thinking. They understand that if they sit there with empty offices in four or five years that aren't creating tax revenue, in fact, potentially creating losses, you've just got a downtown core that's debt. It's not good for businesses in the surrounding area. It's harmful towards the economy. You can flip that around and you can turn it into something positive that we need. We're seeing more and more municipalities explore that area. We're seeing more and more of our clients, developers, explore that area.
The other cool thing about it and something that goes to the heart of the problem, we always talk about nimbies, but not in my backyard folks. We think that's a huge practical issue within the whole housing space, which is just that when you own a property, or you live in a certain neighborhood, you're pretty anti-development for the things around you. That's also just gotten normally. You don't really blame people for that, right? An office tower is different. It's already there. I think there's a bit of a fundamental, or psychological difference there and less of a hurdle that you have to go through to say to a neighborhood, “Hey, we're going to take this office tower, we're going to turn it into homes.” Than, “Hey, we're going to take this block of duplexes and triplexes that are 25-feet near and turn it into an 80-story building.” That's a more difficult discussion.
In fact, there's a totally positive spin to that and a spin around rejuvenating neighborhoods. I'm really big on this topic. You see me post about it all the time, but I just think this is something that is really positive that's occurring. I haven't seen much of it from Toronto yet. There's a mayoral race and I haven't heard a single candidate even really mention this. They're mostly focused on rent evictions, of course. This is something that I think is going to be huge. There's a transformation happening in office and there's a desperate need in housing. Those things just should line up. Governments have to get behind it. It's one tool. It's one potentially hopeful way that we can contribute to solving this issue. It's also not completely new. We've done projects. We've got clients who've already done this, built websites, done marketing campaigns. We know it works and really successful projects. We've seen hotel as well. We're starting to see retail. It's not even just office, but we have to think this way. We got to grab every available tool in our tool chest to try to solve this problem. That's something positive to end on for sure.
[0:42:51] MH: Yeah, I appreciate that. Yeah, like you said, it's something that'll contribute to this. Definitely not the solution, it's just one thing. But it's not even out of the box thinking. Just a little bit more creative thinking on how we can accomplish this supply issue. Yeah, let's end on a positive note. We covered a lot there. Max, thanks for joining us for our first-ever Sync or Swim in-person podcast. I think it was a smashing success.
[0:43:15] MS: Smashing success. Yeah.
[0:43:16] MH: Hoping to have you back on again.
[0:43:18] MS: Yeah, let's not wait as long this time.
[0:43:21] MH: Let’s not wait long this time.
[0:43:22] MS: So many opinions to share, you know.
[0:43:23] MH: So many opinions. If you want those opinions, make sure to check out Max Steinman on LinkedIn. Of course, follow Rentsync, Rensals.ca, the entire rentals network. We're really pushing the limits with marketing over the next six months through a year. We've got a lot of exciting things coming down the queue, so keep an eye out. Again, Max, thanks for joining us.
[0:43:42] MS: Awesome.
[0:43:43] MH: All right, thanks everyone.
[END OF INTERVIEW]
[0:43:45] ANNOUNCER: You've reached the end of another episode of Sync or Swim. Make sure to visit us at rentsync.com/podcast to access show notes, key takeaways, and where you can sign up to our newsletter to receive free bonus content. If you found value in the show, please, also remember to rate, review, and subscribe. Don't forget to join us next week for another episode. Thanks for listening.
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