Smoking is not only deadly, it can kill property values as well.

According to a recent survey of Ontario realtors, sponsored by Pfizer Canada, smoking in the home can reduce the value of a resale property by up to 29 per cent. A resounding 87 per cent of respondents said it lowers resale value, and nine in 10 real estate agents and brokers surveyed said smoked-in homes are more difficult to sell.

Multi-residential landlords know all about the impact of smoker smell. Renting a unit that was previously home to a smoker is no easy feat. Unless the new renter is a smoker as well, the unit will need to be “detoxified.” While the cost can vary, a landlord should expect to pay $650 or more to detoxify a one to two-bedroom apartment – $450 on a fresh coat of paint, $100 or more on carpet cleaning and another $100 to clean all other surfaces, including windows, mirrors, balcony doors, closet doors, kitchen cabinets and appliances.

In extreme situations, a landlord may also have to replace or repair countertops, carpeting, appliances and other surfaces that have been marred by cigarette burns, and possibly even electrical sockets where tar and nicotine can accumulate.

Add in the possible loss of the insurance deduction for a smoke-free building, complaints from neighbours and loss of tenants who won’t rent in a building due to health concerns, and ask, “Is the headache really worth it?”

Smoking is risky business
The Council of Canadian Fire Marshals and Fire Commissioners report that smokers’ materials and open flames (cigarettes, lighters and matches) remain the number one ignition source in fatal residential fires. Between 1993 and 2002 (the most recent figures available), 9,414 fires, more than $231 million in losses, 688 injuries and 94 deaths were caused by lit smokers’ materials.

Landlords and property managers may be concerned that rejecting smoking tenants constitutes discrimination or will increase their vacancy rate. However, the former is incorrect and statistics for the latter suggest otherwise. According to the Non-Smokers’ Rights Association and its sister organization, the Smoking and Health Action Foundation, a landlord can legally include an enforceable no-smoking policy in its lease agreement. Health Canada’s 2011 Canadian Tobacco Use Monitoring Survey reports that only 14 per cent of Canadians smoke daily, while four per cent smoke occasionally. Daily smokers consume an average of 14.4 cigarettes per day.

Striving for a smoke-free future
In 2007, the Ontario Tobacco-Free Network commissioned a report on exposure to second-hand smoke in multi-unit dwellings. Two in three Ontario respondents surveyed said they would prefer to live in a smoke-free building if such a choice was offered.

This means a landlord can either:

• Rent to the minority market of smokers (14 per cent), try to attract the 22 per cent of renters who appear to be indifferent to smokers and pay the additional smoker-specific cleaning costs when re-renting a unit; or
• Rent to smoker-intolerant tenants (64 per cent), try to attract some of the same smoker-tolerant renters tenants – for a total of 86 per cent of the market – and save the average $650 smoker-specific cleaning costs.

Chris Seepe is a commercial real estate broker and broker of record at Aztech Realty Inc., Brokerage in Toronto. He can be reached at 416.525.1558 or cseepe@aztechrealty.com.