A private member's bill to be put forward by NDP MPP Peter Tabuns aims to make rental housing more affordable in the province. It calls for the end of an exemption that removes rent control from nearly all rental units built after 1991.
Tabuns, MPP for Toronto-Danforth, spoke about his bill at Queen's Park at 10 a.m., but previewed its contents Thursday on CBC Radio's Metro Morning.
Tabuns said his bill, which he will table on Monday, will call for rent control to be extended to units that came on the market after 1991.
"People deserve protection against unreasonable rent increases," Tabuns told Metro Morning. "The exemption that exists now for buildings built after 1991 needs to go. It isn't helping people anymore. In fact, it's putting people in a very difficult position."
In response, Housing Minister Chris Ballard said Thursday it is "unacceptable" that Ontarians face skyrocketing housing costs.
"That's why my staff are already developing a plan to address unfair rises in rental costs by delivering substantive rent control reform in Ontario as part of an ongoing review of the Residential Tenancies Act," Ballard said in a statement.
"Our government is serious about reducing the pressure of housing costs felt by Ontarians, as well as providing more affordable options for people to choose from."
Details on this plan will come "in the days ahead," the statement said.
Jim Murphy, president and CEO of the Federation of Rental Housing Providers, said Thursday that rental regulations help to maintain some security for investors, and changing the rules will create uncertainty.
"Now is not the time to make changes that would adversely impact investor confidence," he said in a telephone interview.
That uncertainty will creep into what he called the secondary rental market, or condo units owned by individual investors "who have also provided an important source of housing."
"If the rules keep changing what does that do to the confidence to provide the housing that's required?" Murphy said.
The developments follow weeks of reporting by CBC Toronto on the city's rental-market crunch, including the struggles of many would-be tenants to find affordable housing.
The issue of the 1991 loophole has been at the forefront of the discussion, with dozens of readers, listeners and viewers sharing their own experiences.
Nicole Meredith, 25, has been forced to move out of her one-bedroom condo-apartment on Queen Street West after her rent jumped $425 per month.
"Nothing that is younger than I am in Toronto is even covered by the regulations in place," Meredith told CBC Toronto last month.
Steven Twigg, a freelance illustrator, has found a creative way to live in the city without paying any rent. He house sits.
"People just think, 'I have to rent, so I have to get a job I don't want,'" Twigg said.
"You can find other ways, if you're creative."
'This policy has failed'
The rent-control change was brought in back in 1997 under then-premier Mike Harris in the form of Bill 96. At the time, the idea was to encourage developers to build more rental housing by removing restrictions on the rent they could charge.
The move didn't spur rental property development at the required level, rental advocates argue. Kenn Hale, a lawyer with the Advocacy Centre for Tenants Ontario, said that Ontario needs at least 10,000 new rental units every year to keep up with population growth. However, rental housing completions have averaged less than 3,300 per year, he said.
In Toronto last year, 18,000 condo units were built. In comparison, just 1,700 rental units were completed.
"The result is the tightest rental market in 15 years," Hale told reporters at Queen's Park. "This policy has failed."
But Murphy disputed this, saying there's "project after project after project" being built in the downtown core. He pointed to a development at Bay and Gerrard streets with 600 new rental units; more than 1,000 proposed rental units as part of the redevelopment of the Honest Ed's site at Bathurst and Bloor streets; and a development on Isabella Street that includes some 225 units.
"We've never seen before the number of purpose-built rental units that have been constructed and that are being planned," he said, adding that the federation is working on a report that will provide an overview of the projects, which will be ready in the coming weeks.
But as Tabuns sees it, the policy has created what he called a "two-tiered" rental system.
He said under his bill, landlords will still be able to set their rents at market value. However, it will just give tenants a degree of certainty about the rent increases they can expect in the future.
"Really, it's not ending the whole range and ability for developers to set market rents in the first place," Tabuns said. "What it just means is that people who are anxious and worried that they won't be able to stay in their unit will have some protection."
Rental market squeeze
Meanwhile, landlords with older buildings say they face increases to their tax, water and hydro bills and need to be able to raise rents.
Last month, Toronto landlord Frances Newbigin told CBC Toronto that the 1991 issue creates a problem for landlords who own older buildings: How can they cover spikes in their costs without being allowed to adequately raise rents?
The 2017 rent increase guideline set by the Ontario government this year is 1.5 per cent.
Newbigin said that doesn't keep pace with her rising costs as a landlord.
The rental-market squeeze is a growing problem in the city. With housing prices skyrocketing, more people are getting priced out of the homeowners' market and renting for longer periods.
With more people in the renters' market, open houses and bidding wars, once a hallmark of the buyers' and sellers' market, are now commonplace for rental units. There's also a supply squeeze: the majority of new builds in the city are condo units, not purpose-built rentals.
The average monthly rent for a one-bedroom condo apartment in Toronto hit $1,776 in the last quarter of 2016, up 7.4 per cent from the same time in 2015.
The condo apartment vacancy rate is now 1 per cent, the lowest it has been in seven years.