Credits: VERONICA HENRI/QMI AGENCY
TORONTO - Ontario will cap rent increases next year at the second lowest rate in more than two decades.
Tenants who live in buildings completed on or before Nov. 1, 1991 will see a maximum hike in their rent of 0.8% in 2014 which works out to $6.40 on an $800 monthly rent.
The lowest rate in the 23-year history of the rent control program was 0.7% in 2011 -- a provincial election year.
Mike Maka, a spokesman for Municipal Affairs and Housing Minister Linda Jeffrey, said the rate is linked to the Ontario Consumer Price Index (CPI).
The rental increase is based on a CPI average from June to May.
“And then the average for that would form the rent guideline for the following year,” Maka said. “It’s basically a reflection of inflation in Ontario.”
In 2012, Premier Kathleen Wynne’s government brought in a 2.5% ceiling for annual rent increases.
“The belief is it provides certainty for the tenant, where they understand that they will have a rate that’s consistent and in line with what they can actually pay,” Maka said.
There are exceptions for property owners who can prove to the Landlord and Tenant Act that they need higher rents to cover, as an example, the cost of a substantial renovation.
NDP MPP Rosario Marchese said rental control should be expanded to include the many condo buildings constructed after 1991, noting residents in his riding of Trinity-Spadina have been shocked by double-digit rent hikes that are legal.
“Some tenants report huge rent increases after they demanded repairs or pointed out poor safety standards in their unit. Anti-poverty activists call this ‘economic eviction,’” Marchese said in a statement.
“Tenants should not have to live with such uncertainty, not knowing if they will be able to keep living in their home once their lease expires. Rent increases should be affordable and predictable, allowing tenants to budget accordingly,” he added.
Bill Blake, of the Ontario Landlords Association, which represents private, small residential landlords throughout the province,
said most of their members have older properties and are impacted directly by rent control.
It has been difficult for these owners to absorb the 2010 HST hike and normal expenses with CPI-tied rent increases which don’t necessarily reflect the true cost of property management, Blake said.
Ontario also does not allow landlords to demand a security, damage or pet deposit so there is no financial incentive for a tenant to leave a place in excellent condition, he said.
“We’ve seen a lot of members who are landlords ... actually just get out of the industry,” Blake said.
Rent control lapses when a tenant leaves, allowing the landlord to boost the rental fee to the market rate.
Blake said this is more of a benefit to bad landlords, with turnstile tenants, than good owners who tend to attract long-term tenants.
Ontario Rent Control Annual Increases
- 2014: 0.8%
- 2013: 2.5%
- 2012: 3.1%
- 2011: 0.7%
- 2010: 2.1%
- 2009: 1.8%
- 2008: 1.4%
- 2007: 2.6%
- 2006: 2.1%
- 2005: 1.5%
- 2004: 2.9%
- 2003: 2.9%
- 2002: 3.9%
- 2001: 2.9%
- 2000: 2.6%
- 1999: 3.0%
- 1998: 3.0%
- 1997: 2.8%
- 1996: 2.8%
- 1995: 2.9%
- 1994: 3.2%
- 1993: 4.9%
- 1992: 6.0%
- 1991: 5.4%
Average rent increase in Ontario: 2.8%