Posted March 20, 2017
Why Ontario Rent Control Laws need to be changed:
While the Residential Tenancy Act was touted as having a hard rent control cap that is tied to inflation (2016 rents can go up 2%), it has three major loop-holes that undermine its purpose:
1) Vacancy Decontrol: When the unit become vacant (when the tenant moves out) the landlord can raise the rents to whatever amount they want.
2) Above the Guideline Increases: If a landlord does any repair to the building (called a capital repair) they can apply to the Landlord and Tenant Board for an above the guideline increase. If the landlord can prove the repair is going to be done they are approved of the increase to cover the amount of the repair.
3) Rent Control only for buildings built before 1991: While this covers the vast majority of rental units, any tenant living in a building that is built in or after 1991 is not covered by any rent control laws.
How bad policy on rent control exacerbates the housing crisis:
Vacancy Control: By allowing landlords to raise rents once a tenant moves out, the Ontario rent control laws give an incentive to the landlord to get tenants out of their units. This can come in the form of not doing repairs for longer term tenants, and in some bad cases, even harassment. These laws have directly led to the displacement of thousands of Ontario families.
Above the Guideline Rent Increases most often happen on repairs that are essential to the tenants (e.g. fixing the heating system, repairing the roof of a building that is leaking, replacing elevators, even just painting common areas of a building). As the housing stock ages, these repairs are something that the landlords need to do, and are investments that they will profit off of in the long term, and increase their property value in the short term. By allowing landlords to pass on every cost to the tenants in permanent rent increases, the Provincial Government is giving a blank cheque to landlords.
No rent control laws on buildings built after 1991 was a policy developed on a false assumption that having no rent control laws will get developers to build rental residential housing (something that federal tax laws used to incentivize in order to build rental buildings).
Once rents rise, they will not come down. Rent Control laws with loop-holes as wide as these are not rent control laws at all.
1) Rent control needs to be put on units, not on leases
2) Above the guideline increases for basic building repairs needs to end
3) Rent control needs to be for every rental building in Ontario