By ANTONELLA ARTUSO, Queen’s Park Bureau Chief
Last Updated: January 2, 2011 5:20pm Ontario rents will be allowed to edge up by only 0.7% in 2011.
It is the lowest increase in the 35-year history of the province’s rent guideline — the maximum annual rent increase allowable without seeking special approval from the Landlord and Tenant Board for a heftier hike.
“The McGuinty government is providing real protection for tenants by linking the rent increase guideline to the Ontario Consumer Price Index which prevents routine rent increases above the rate of inflation while ensuring landlords can recover increases in their costs,” said Liberal cabinet minister Jim Bradley.
Stuart Henderson, a moderator with the Ontario Landlords Association, which typically represents property owners with less than five units for rent, said the tiny increase has many of the group’s members wondering if they can afford to stay in the business.
“We’re the ones that are paying all these new costs — the price of gas, hydro, the HST — and then we kind of get kicked in the stomach with a 0.7% increase,” he said. “It leaves kind of the worst landlords in the market, people who are renting out fire traps, illegal places.”
The next provincial election will be held in October, and Henderson said the McGuinty government is clearly currying favour with tenants.
“It’s political opportunism,” he charged. “We feel that the McGuinty government is trying to protect against a backlash from tenants in Toronto.”
Geordie Dent, executive director of the Federation of Metro Tenants’ Associations, said landlords may be complaining now but they weren’t protesting when the province allowed yearly increases in the range of 5% in the 1990s.
The recession has been very hard on many tenants, and unemployment in Toronto continues to hover at about 10%, he said.
”It’s not renting out a movie at Blockbusters — it’s people’s housing,” Dent said. “Any increase right now during this difficult time is hard for any tenant.”
Also, Ontario does not have “real” rent control because the landlord is only obliged to follow the guideline for an existing tenant, he said.
“If you move into a unit, though, a landlord can charge you whatever he wants,” Dent said. “The last tenant could have been paying $500 a month and they can charge you $2,000.”
In the long run rent controls hurt tenants. Many small landlords are not aggressive when it comes to raising rents – opting to keep the tenant. Tenant turnover is very costly. This past year the McGuinity government has inflicted both the HST and increases in hydro on landlords. Yet, for the purposes of political posturing they are “demonizing landlords” in an election year. The immediate outcome will be a larger than usual number of applications for “above guideline” rent increases. There is no doubt these increases will be approved.
If you want to see another way that governments hurt tenants see the Toronto tenant tax:
First a correction about the OLA. The OLA does not typically represent landlords with less then 5 units.
There are many landlords on that forum that have well over a hundred apartments. The trick is that most of the landlords own smaller buildings. There seems to be no distinction between a small landlord with a couple units and a landlord with over a hundred units as long as each building is relatively small.
More importantly though is about rent control.
Without rent control there may as well not be any guidelines or rules about terminating tenancies. Because withot rent controls a landlord would simply have to increase the rent to an impossible to afford level resulting in the tenant movign. Then the landlord could reduce the rent back to reasonable market values for the next tenant.