“Vancouver was the first to see it; and now, a long line of rental shortages is happening all across the country. One reason for this is because of the good conditions in the housing market. As home prices continue to rise, more and more people are finding renting a more viable and affordable option. The rise in rentals is concerning for those trying to find a home (even if it comes with a monthly rent payment instead of a monthly mortgage payment.) It’s also concerning for Ontario’s provincial government, who has announced this week new rental guidelines that will ensure properties stay affordable to renters, while maintaining fairness towards landlords. However, not everyone sees that as being the case.
It was on Tuesday when the Liberals introduced a new Bill at Queen’s Park that changes the current rental guidelines from the maximum of 3.1% provincial rent increase for 2012 to 2.5%. Kenn Hale, spokesman for the Advocacy Centre for Tenants Ontario spoke about how pleased he was with the new legislation, saying, “In the real world, tenants are losing their jobs, facing demands for wage freezes and rollbacks or living with a 1% increase in their social assistance cheques.”
But while the new guidelines may make renting much more affordable for Ontarians, landlords in the province are not so happy. Vince Brescia, president of the Federation of Rental-housing Providers of Ontario, said, “The government is unilaterally imposing a cap without any discussion with an entire industry and is initiating a policy that will be particularly devastating for small landlords,” indicating that lowering a landlord’s future rental income could cause those with only a few small properties to lose the property altogether, or have to take out a 2nd mortgage to maintain the property. And that’s despite the Ministry stating, along with the announcement, that “for landlords, this would ensure a fair return so they can properly maintain rental properties.”
To this Hale pointed towards renters that move around a lot from place to place, due to employment and other obligations, “when tenants move there is no limit on the rent increases that a landlord can charge an incoming tenant in any private-market building.” This would suggest that landlords could at this time make up their rental income and save them from any further action with the property; while still insinuating that this is another area where tenants need protection.
Currently, there are 1.3 million households in Ontario that consist of renters. And if the housing prices stay up, and the guidelines stay down, that could be the case for some time. The only question is – would that lead to a similar crisis the province experienced 25 years ago when low rental prices caused such a huge surge in the rental market that homelessness skyrocketed, as well as the rate of evictions because there was such high demand, and landlords were pressed for every dime they could get from tenants. It is good to keep in mind however, that at that time the rental guidelines were set at 1.7%, well below the 2.5% that was announced this week.
With these new rental guidelines, do you think Ontario will be headed for a crisis in the coming years, or do you think this is an ingenious social initiative that makes housing affordable for all? “
