OTTAWA—Giant loopholes in Ontario’s rent control system mean tenants are paying average rent increases that are three times those allowed under the provincial rent increase guideline, a new report from the Ontario office of the Canadian Centre for Policy Alternatives (CCPA) shows.
“Over the last decade, Ontario’s rent control guideline has allowed landlords to increase rents by 16.5 per cent,” said Ricardo Tranjan, co-author of Rent Control in Ontario: The facts, the flaws, the fixes. “Over that time, average rents have actually increased by 54.5 per cent.
“You could drive a very large truck through the loopholes in our rent control system,” he said. “While the guideline is keeping rents in check for hundreds of thousands of tenants, landlords have too many ways to get around it. We need to close those loopholes and get back to the central purpose of rent controls, which is to keep rents reasonable.”
The CCPA report’s city-by-city analysis shows Hamilton, Oshawa, and Toronto census areas seeing the highest rent increases, with Guelph, St. Catharines-Niagara, Kitchener-Waterloo-Cambridge, and Windsor close behind.
In the report, Tranjan and co-author Paulina Vargatoth point to three loopholes in particular that are helping Ontario landlords raise rents dramatically:
- The rent guideline does not apply to new units that have come on the market since November 15, 2018;
- The rent guideline does not apply to vacant units, so that when tenants move out, landlords can charge the new tenants whatever they want; and
- Above-Guideline Increases (AGIs) let landlords hike rents when they renovate.
The calculations involved in AGIs frequently allow landlords to increase rents by much more than the actual cost of the renovations, the CCPA’s analysis shows. “AGIs are not primarily about recovering costs,” said Vargatoth. “For landlords, especially large corporate landlords, AGIs are profit centres, first and foremost.”
For more information and to arrange interviews, please contact Amanda Klang, CCPA Senior Communications Specialist, at [email protected]