This Space For Rent

With apartment vacancies in Toronto at record highs, landlords are throwing all sorts of incentives at potential tenants to rent or current tenants to stay on--a month or two of free rent, free parking, free cable and internet access, and so forth.

Now with the return of rent control in Ontario, landlords are going to see profit margins thinned by rising property taxes and energy costs shaved down even more:

New restrictions on "above-guideline increases." Currently, landlords may increase rents by more than the government-mandated percentage to cover the costs of capital projects, such as major renovations. The new legislation will make it clear that the costs of routine maintenance cannot be passed on to tenants this way.

Restoration of the "costs no longer borne" clause. Under this clause, landlords who get above-guideline increases for capital projects would have to roll back rents once the project is paid for.

Restoration of "orders prohibiting rent increases." The legislation will give the rental housing tribunal the power to freeze rents on apartment buildings that are subject to outstanding work orders from the municipality.

Elimination of "default eviction orders." Now, if a tenant does not dispute a landlord's claims of non-payment of rent, the tribunal may issue an eviction order without a hearing. The legislation will require a hearing.

At least one of the more objectionable proposals--rent controls--will not be in the legislation. The Federation Of Rental Housing Providers-Ontario has a collection of articles explaining how rent controls don't actually benefit the great mass of tenants and disadvantages decent landlords--not slum lords--at the same time.

Artificially holding rents down doesn't help poorer and newer tenants in the long run, but it certainly allows longer-term tenants a great advantage and landlords a disincentive to improve their properties or keep current tenants satisfied.

And deadbeat tenants will be able to game the system a little longer. Instead of having to actively pursue an appeal of an eviction order, they can sit back and wait for the appeal to be scheduled, and keep on defaulting.

And if capital projects do significantly increase the value of a rental property, shouldn't a landlord be able to charge more for what has become a more desirable property?

I rent myself, and I've known good landlords and bad, but my sympathies have generally been with the landlords in this market. With interest rates at record lows and all sorts of new mortgages being offered at easy terms, this is not a landlord's market, and it won't ever be again if this legislation goes through.

Source: Toronto Star