Ontario housing minister vows to boost rent control after CBC Toronto tenancy series

1 / 4
Ontario housing minister vows to boost rent control after CBC Toronto tenancy series

The Ontario housing minister vows that the province will soon unveil new "rental controls" to address the skyrocketing cost to lease a home in and around Toronto.

Minister Chris Ballard spoke about the upcoming changes on Thursday, following the announcement of an NDP private member's bill promising much the same thing — and a CBC Toronto series focusing on the fallout the limited safety net for renters has created for young professionals in this city.

"It's absolutely unacceptable that renters are facing the pressure that they're facing today," Ballard said in an interview with CBC Toronto's Dwight Drummond. "So we'll be bringing forward legislation that expands on the rent controls that are currently in place."

- Tell us your renting woes by joining our Facebook group, a forum for conversation and insight

Staff within the housing ministry have been consulting with tenants and landlords across the province since Ballard took over the portfolio last spring, the minister said in an interview.

He couldn't commit as to when the changes to the Residential Tenancy Act could be tabled in the legislature, saying only that he's pushing his staff to have it ready shortly.

1991 loophole

Ballard's comments come a few hours after NDP MPP Peter Tabuns said he would table a private member's bill that calls for an end to the so-called 1991 rule, which exempts property built after Nov. 1, 1991 from provincial rent control.

Younger renters and those in lower socioeconomic brackets appear especially vulnerable to the law's recent effects. They're being priced out of buying a home and pushed into a competitive rental market with a one per cent vacancy rate for condo apartments, something CBC Toronto documented in a series of profiles.

According to the Toronto Real Estate Board, in the last quarter of 2016, the average monthly rent for a one-bedroom condo apartment in Toronto hit $1,776, up 7.4 per cent from the previous year.

That comes after successive year-over-year increases of 7.2 per cent, 6.4 per cent and 4.8 per cent for each of the previous three quarters.

The lack of supply

Former premier Mike Harris's Tory government made the 1991 loophole law in 1997, saying that it would spark developers to create more apartments to address what was considered a stagnating rental supply.

But tenancy advocates argue that the move didn't spur the necessary level of rental property development —  and Ballard told CBC Toronto that he agrees. 

The minister said that he's "absolutely" open to revisiting that particular segment of the law.

"With the number of people we have moving to Toronto and the GTHA every year, clearly it's not working," he said. "There's such pressure for people looking for a good place to call home."

Properties built before November 1991 are subject to limited rent control; they can only increase the rent once every year and can only do so by Ontario's annual increase guideline.

That increase has been set at 1.5 per cent for 2017. And a landlord must provide 90 days notice before the increase can legally come into effect. Currently, there are no such regulations for properties built after November 1991.

A number of landlords' and tenants' associations that reached out to CBC Toronto as part of the No Fixed Address series say the 1991 rule has created a "two-tiered system." 

Ballard didn't say whether that same annual increase guideline that affects pre-1991 properties could blanket newer rental properties as well.

"There's a number of things on the table," Ballard said. "One of them is [looking at] how do we expand that rent control so that we can capture and help as many people as we possibly can."

Landlords warn changes could hurt dwindling rental supply

Earlier Thursday, Jim Murphy, president and CEO of the Federation of Rental Housing Providers, said 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.

But the housing minister said that any changes would balance the issue of limited rental supply with the need to increase protection for renters. 

The number of condo apartments rented through the Multiple Listing Service (MLS) during 2016 in the Greater Toronto Area dropped by two per cent to 26,602 units, according to a January report released by Urbanation, a real estate consulting firm. That's the first annual decline since it began monitoring the data in 2011. 

"I know that supply is still an issue in Toronto — it's still a big issue — so I don't want to do anything that's going to put too much of a chill on the building marketplace," Ballard said. "Something has to be done and the focus right now is taking some of the pressure off of our tenants."

He noted that the province made changes to the Planning Act in 2011, which encourages municipalities to create bylaws that allow homeowners to rent out a basement or secondary suite. When the change came into effect, the province said it would help with the supply issue for renters and reduce the burden on homeowners. 

Right now, the condo apartment vacancy rate in Toronto sits at one per cent — the city's lowest in seven years.