Last week, Ontario’s Minister of Finance announced that rent control rules will no longer protect tenants that will move into new residential units coming on the market. If you move into an apartment, a condo unit, or a basement unit that was first occupied as a residential space after November 15, 2018, there will be no legal limit set on how much your landlord will be able to raise your rent. In other words, the rent for the brand new basement apartment unit that you’ll be moving into next month (the one you chose to rent because it is more affordable than apartments or condos) could become unaffordable for you in a year if your landlord wishes to raise your rent to make more profit. People in Toronto and other unaffordable cities in Ontario will once again face economic eviction in an unregulated rental market.
The good news is that unless a unit was first rented as a residential space after November 15, 2018, restrictions on rent increases will continue to apply once a tenant takes occupancy. Even for the new residential units impacted, rent can only be raised once a year and 90 days’ notice will still be required before any rent increase can be taken. So, you will have time to give 60 days’ notice and move out – if you can find another place to move to that is affordable. This announcement does not have a direct impact on any existing tenancy agreements. It will not change landlords’ right to charge any rent they can get for a vacant unit (a policy called “vacancy decontrol”) when a tenant moves out
So why did the government make this change?
Not long ago, Ontario used to have this exemption to rent control. It was dubbed the “1991 loophole”. The governments of both PCs and the Liberals backed this exemption, justifying the lack of tenant protections as a necessary incentive for developers to build rental housing. For 25 years, these governments argued that the 1991 exemption works. It must because the landlord lobby is telling us so. Right?
Wrong. Developers did not build rental housing. In fact, less than 9% of all housing units built in Ontario from 1990-2017 were rental housing; 91% of housing built were for homeownership/condos. So for over 25 years, the supply of rental housing shrunk and tenants were squeezed to pay more rent. When the rental affordability crisis started to creep into the lives of Ontario’s middle class – an experience that those living on lower incomes already knew too well – the provincial government of Kathleen Wynne said enough and recognized the utter failure of the “1991 loophole”. There was very little new rental housing supply created in those years and none of it can be directly connected to the unlimited right to raise rents. As tenants demanded fairness, Liberals announced that all private rental units would fall under the rent control rules effective April 20, 2017. Tenants were happy. No more economic evictions. Developers didn’t care. They weren’t building rental housing anyway. Landlords were mad. How will they squeeze tenants for more profits?
But it was a short-lived victory for the millions of tenants in Ontario. A year and a half later, the PC government is using the same excuse to bring back a failed policy. Do they really believe it will work? Probably not. But it sends a message – protection of housing rights is less important than getting rid of rules that may stop business from doing what they want. Apparently, this is what “Open for Business” means.
Tenants are already in trouble. Our recent report “Where Will We Live? Ontario’s Affordable Rental Housing Crisis” shows that nearly half of Ontario tenants pay unaffordable rents. This hits people in the 25 – 34 year-old age bracket the hardest. These are also the people who are most affected by the freezing of the minimum wage and other measures by the provincial government to keep the incomes of working people down.
Tenants must continue to organize and speak out to protect themselves. In a democracy, governments depend on the support of those they govern to stay in power. Let the Ontario Government know that you do not support weakening your protection in order to help the businesses that own your home. Contact your MPP and let them know. You can also sign a petition to Tell Doug Ford: no unlimited rent increases.