Despite landlords' objections, Ontario caps rent increases at 2.5%
To ease the squeeze on tenants facing big rent hikes, residential rent increases are now capped at 2.5 per cent starting in 2013 under legislation passed last week by the Ontario government.
Click here for a historical view of previous rent increase guidelines. The average from 2004 to 2012 was 2 per cent whereas it was 3.1 per cent from 1993 to 2003.
Landlords started to howl about this ceiling months ago, of course: “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," according to Vince Brescia, president of the Federation of Rental-housing Providers of Ontario.
Landlords are concerned that such price caps could replicate the devastating housing market conditions seen in Ontario 25 years ago, when fixed rent controls were out of whack when compared with rising housing costs.
Tenant groups, of course, don't see it that way at all and have been slamming the government for not doing enough to help renters.
“In the real world, tenants are losing their jobs, facing demands for wage freezes and rollbacks or living with a 1 percent increase in their social assistance cheques, Kenn Hale, spokesman for the Advocacy Centre for Tenants Ontario said when the guidlines were first proposed.
Nor is there adequate protection in place for those who move around a lot, maintains Ottawa Sun columnist Anthony Furey, since the guidelines only apply to occupied units.
"Once a unit becomes vacant, a landlord could up the amount they’re listing the property for by a considerable amount. Knowing that they might be caught facing cost increases that greatly exceed 2.5 per cent, they may want to factor that into the initial rent."
"So instead of passing on the real cost of increases to the renter year-by-year — which is more like what happens now — they will pre-emptively pass on their exaggerated fears of what the increases will be," he maintains.
Is this recent ceiling reasonable? Or do such caps keep properties off the market and deter new construction?
By Gordon Powers, MSN Money
Posted by: Frank | Jun 28, 2021 11:51:45 AM
Rent control ......... very fertile ground for the NDP to plant seeds of discontent. Great way to buy votes. Funny how people can find money for cigarettes, beer, liquor, casinos, lottery tickets and vacations but when it comes to paying the rent they need government enforced laws to keep the cost of housing suppressed. Landlords have to listen to all the compliants about how the tenants pay good hard earned money and the building isn't clean enough, the snow isn't removed promptly, the place needs a paint job, and on and on and on. Bottom line rent control is a joke!!!
Posted by: Sir Realist | Jun 28, 2021 12:23:48 PM
I have to say I really do shake my head at the provincial Liberals (although I like the federal Liberals). Anyone who has taken a first year Economics course knows that rent and price controls may provide short term benefit for tenants but at long term heartache for them...after all who is going to rent out a property to tenants if you can't make a profit doing it? This will just decrease the supply of rentable suites in the long run and leave tenants with fewer options. Remember when this province used to elect Progressive Conservative governments election after election and we were the economic engine of Canada? Life was so good then. Now it's Alberta who elects Conservatives and they are the rich province...we've become a have-not province and now rely on equalization subsidies from BC, Alberta, Sask and even Newfoundland. We're becoming the new Quebec. All my kids have moved to BC and ALberta for a better life and who can blame them? We are only getting what we deserve.
Posted by: felicia | Jun 28, 2021 1:10:22 PM
I m thinking that the fact that rent increases are stabilized would help cool down the craze re buying a property at all costs, because there IS a bubble already in Canada.
If the bubble bursts, the speculators shwould pay the price, and they can afford it, not the regular working people who could not save any money and so they have to pay rent. ALL prices went up in Canada, much more than the inflation rate, and to be able to have a roof above your head should be a right, and the government should do something about it, as it just did.
Posted by: ray larder | Jun 28, 2021 1:13:26 PM
I don't mind a small increase, based on other increases. (water, grass cutting, mainenance, etc.)
But Landlords increase beyond their needs.
I lived in a townhouse complex (1979 to 1980) in london Ont. the rent went from $180 per mo. to $350 per mo. in the 10 yrs i was there, that was a lot of money for me to pay as a tradesman.
You have to have some fair rules.
Where i'm at now you have to paint your own place and buy your own paint. A one-bedroom in another building down the street is $850 per mo., pay your own utilties.
Posted by: habit | Jun 28, 2021 2:12:36 PM
ya well the cap is okay, i rent a place and the landlord doesnt do crap puts bandaids on everything, the building is unsecure we have ppl sleepin in the hallways, light are out all over the place, the wiring and various other cables in the building are way over do for revamping, when i moved in they didnt even clean the place up i had to wash and remove all this myself and had to pay for paint to fix the place up, the bathtub is all peeling and rusting, the stove and fridge where filthy and all for this tajmahal i i pay 850 bucks a month for and my rent was increased 4 percent again,
i know they trying to make a buck like everyone else but hey you want ppl to pay thier rent ontime atleast give them a decent place to live in.
and last time the hotwater went out it was gone for almost 2 days, they where not going to let me use thier shower to get it fixed. so looks good on them slum lording landlords, you want whats its worth fix your damn places.
Posted by: Greg | Jun 28, 2021 3:20:53 PM
I work in the rental industry in one of the largest rental property owners in Ontario, and I can tell you right now that 2.5% is still too high. There are many units that dont need an increase for at least 5 - 10 year. This is because there is nothing done in that unit or in that building that is large enough to warrant an increase every year or every two years.
Profits are large as is. The continued squeezing of the tenants for more and more, while the general economy gets lower and lower, and salaries plummet more and more, will lead to nothing but a complete housing crash.
I have warned the company I work for that the reverse needs to happen, rents need to be lower 2.5% per year, until the economy truly rebounds. Failure to do so, will simply lead the rental and housing market to cause its own demise.
But greedy fools will remain fools and will fail to see it until its too late.
Posted by: Economics people | Jun 28, 2021 4:24:09 PM
Rent control is stupid unless we are taking about public subsidized housing.
It's economics 101 - supply and demand. If a landlord can't cover his costs (at a bare minimum) then why be a landlord? They are people too trying to make a living and don't rent property for fun - it's an investment to MAKE money. The government should let market forces drive rent - the landlords costs are increasing more than 2.5% and at today's housing prices it's cheaper to rent than buy. And you don't have the responsibility to pay the property taxes, maintain the property - or pay a mortgage on it for 25years - which can (and certainly will) go up. Bottom line - there should be no cap. Market forces will dictate price. Free market. And if you have a cap - then don't complain when the landlord doesn't maintain the property to your desired standard - because they will lose money in the current rental market if they did. 2.5% cap breeds slum lords. You pay for what you get!!!!
Posted by: FrankTalker | Jun 28, 2021 6:46:56 PM
In reply to Sir Realist who wrote: "who is going to rent out a property to tenants if you can't make a profit doing it? This will just decrease the supply of rentable suites in the long run and leave tenants with fewer options."
Ontario's rent control laws only apply to older buildings (pre-1991), most of which would be totally paid off by now. Your argument that it discourages new rental construction is therefore completely baseless.
Posted by: Nick | Jun 28, 2021 6:54:56 PM
I have been a renter all my life and I can tell you rents have been out of control for years. There are far to many mogul wanna bee's that think that some poor sucker of a tenant should pay their mortgage and a nice profit to boot. I cant wait until interest rates rise and anybody who thinks that landlords have not already factored in their ownership costs into their rental rates is nothing short of ignorant. Frank your comment is stupid and without facts or merit. Greg knows what he is talking about, I moved out of Toronto because of the ridiculous costs of living. And for your information the reason Ontario is a have not province is because of the policies implemented by past conservative governments i.e free trade, the sale of profitable government assets i.e the 407 highway, the break up of Ontario hydro after it was grossly mismanaged. The have provinces have oil as their saving grace or they would be in the same boat as us if not worse.
Posted by: rose | Jun 28, 2021 7:04:39 PM
Maybe people should look at what they are getting for square footage of the property. Some landlords are great and others are slumlords. But we do have a goverment that has help for both landlords and tennants. Yes the rental market and the prices they are asking for theese properties are outrages sometimes. As long as the market demands theese prices your going to have to pay for it. As for mortgage changes don't that didn't help it just left a smaller group of people that can now purchase and more now are going to have to rent. Always comes down to supply and demand.
Posted by: whatisacnc | Jun 28, 2021 7:26:25 PM
The Pareto Principle states that 80% of the results are from 20% of the causes. Why is it a home owner renting an apartment that requires limited maintenence can charge a person half of the wages they earn.
It is obviouse that the rich get weathier as the average joe struggles to pay for basic neccesities, like a roof.
Please explain why wages stay the same but everything else gets more expencive, please tell me where that extra 2% goes, is it just profit?
What do I get for paying that extra money every year, and when does it end?
If you rent and you pay $1200 a month, next year you will pay $1224 per month, and the year after that 1248.48 a month, and it just compounds.
Now if money is suppost to be used for the exchange of goods and services, what other services are you getting for that $24?
It is about time a cap has been set in place, however I think it is time the housing market be regulated, the government should be monitoring the landloards, making sure they provide a quality home for people and that only a certain percentage be taken to make a persons wallet fatter.
A good example is "Bentall" how can they justify charging a business 7$ per sq foot for a warehouse? It is no wonder the cost of everything is so high, look at the overhead!!
If things keep going, we will have problems, or at least the 20% that own everything will get a wake up call when the little guy pushes back because he can't pay his/her rent.
Want to fix the economy, stop steeling from people.
Posted by: Nana | Jun 28, 2021 7:33:33 PM
So when a deadbeat tenant jams the elevator open so he can sneak his stuff out before the end of the month, who do you think has to pay to replace or repair that brand new $1.5 MILLION piece of equipment? Yep, the same landlord who just coughed up those big bucks because he's trying to keep his building in good condition, and that includes replacing old equipment (like elevators), with new ones.
The landlord tenant association has been limited rent increases for a long time; so this legislation isn't exactly a new and startling innovation; but the cap of 2.5% does mean that the responsible landlords may now have to let maintenance slip because they just can't afford it.
FYI, I am neither a tenant nor a landlord.
Posted by: Psych | Jun 28, 2021 11:01:12 PM
Here's a little trick I've used for years to keep my rent down.
Once you get your notice of increase. reply with a written letter.
If my rent is to be increased. Consider this my 60 day notice.
I've never paid an increase.
This should help.
Posted by: CA Reverse Mortgage | Jun 29, 2021 2:10:16 AM
This cap is okay no doubt landlords are affected but they always cry so no need to put attention
Posted by: Karl | Jun 29, 2021 2:30:16 AM
There is obviously a lot of people on here who don't like that landlords make a profit from their tenants and they want the government to fix it through price controls. How about this...why doesn't the government just make it illegal for landlords to rent properties to tenants?? Then all the landlords' filthy profits would disappear like the tenants want. Of course the tenants would have nothing to rent and nowhere to live but ummm we'll figure that out later.
If there are no profits for landlords then landlords won't let you rent their properties...and you'll have nowhere to live...think about it!!!
Posted by: Matt | Jun 29, 2021 4:17:05 AM
Im guessing most of these people on here complaining, have never owned a house or property before. Its expensive. You have property tax, insurance premiums, up keep, lawyer fees and the list goes on. People expect to get everything for free and give nothing in return. If you think being a landlord is an easy task think again. Im 30 years old and worked my bag off to buy some properties and rent them out. Yes I'm a landlord and yes i also rent. If you see something is wrong in your unit, offer to fix it and have it deducted it from your rent. Being a good and courteous tenant doesn't go unnoticed.
Posted by: Ian | Jun 29, 2021 8:26:28 AM
For me rent control helps me live day to day. I don't spend money on cigarettes, beer, liquor, casinos, lottery tickets and vacations like some think. I am disabled and rely on assistance. As it is now, my rent consumes about two thirds of my income and does not leave me with enough to fully cover other expenses such as food, clothing, etc.. It will take years for me to get a subsidized apartment because the need is so great and without the rent control, I would likely be homeless.
I appreciate that my landlord does take care of the building I live in and does their best to keep it clean despite some tenants treating it poorly. The building I am in was built about forty years ago and was likely paid off ten to fifteen years ago, unless the owners flipped it to make more from their tenants.
Posted by: amit | Jun 29, 2021 11:57:14 AM
I think that this is a very good idea. A certain percentage of moneyed individuals park their cash in new condo developments in the city. Thereafter they charge exhorbitant rents followed by hefty increases each year. I agree that we live in a capitalistic economy but that does not mean that there will be no governance on a smaller percentage of people making money at the expense (and extreme inconvenience) of others. Usually, what the owners do is put in a down of 30% against each of the properties and take a mortgage on the remaining 70%. Given the current rates, the rent will cover the cost of mortgage, property tax, insurance and maintenance fees. if there are no limits to the rent hikes, then owners will hike it based on the prime and increase in maintenance fees. And every incremental year will result in higher returns. This piece of legislation will actually start limiting the amount of money that multiple home owners can make. Very good idea. but again, people are smart enough to come up with counter ideas to slip past the statutes of this legislation :)
Posted by: Mr. Negative | Jun 29, 2021 2:02:35 PM
I think they should raise the price. I also think we as people should work together to get the price lower. They can only charge more if we are willing to pay. For instance, do what more new canadians are doing and have 4 - 10 people to a house. Monthly rent would be less than $200.00.
Gas - start carpooling or take the bus if it is an option
Cable & Internet - just don't use it.
Cell Phones - stop by data packages to check facebook.
My point is, until they the profit makers start losing money because of this so called supply and demand. Prices will only go up. The less we consume, the less profit for these companies.
Granted, the first thing to go when they start losing sales, are the employees. I guess it is a lose lose situation.
To a great future.
Posted by: Bruno Fast | Jul 2, 2021 4:11:13 AM
Well I am in Canada sins 1970,and i must say that Canada goverment neglected the citizens of the country.Thear are much corruption internal in the party.Where did you see the mps they have a savings of 980mill in the tresury bank,for the old age pension,whear the old age simple man gets 5,00 increase. Even the comunist partys,woudn`t do that.Mister Prime Minister,you went to the other countrys and preached,human rights,well i think you are killing slowly the poor old age pensioners in Canada.A slow death is painfull.With my pension i can`t pay my rent,i am 67 and must go to work to put the food on the table.Insted you prime minister help the pensioners,you give free millions to aids to other countrys.Can you imagine,as a father of my children,instead i feed my children i give the money to Samalia,and let my children to die of starvation.Prime minister you are not doing your home work properly.Let some other person take over the office,what will look open the sitizens of Canada.Other countrys are saying that Canada is becoming corrupt.The image of the good Canada,the only thing is laft is the nature,the rest is garbage.The politicians are only concern about thear own wealfare.well SHAME to the conservatives.I am realy seeing the old age pensioners beeing carried to the graves by the dozens.WHAT ARE YOU GOING TO DOO MISTER PRIME MINISTER HARPER>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Posted by: Bruno Fast | Jul 2, 2021 4:59:51 AM
I was looking to rent a appartament in Red Deer Alberta,and i think they are high priced.Then i lookt at the rentals in Abbotsford B.C and they are a little cheaper .I find that the prices are out of control.To cap the prices will not help much,because people are bankrupt already.They prices should actuly decreased by 30% and some more,and the houses prices decreased by 40% and the food 25% and the cars by 55%,and the gst be removed all completly.But this only can happind if Prime Minister Harper will waik up and realize hi is in the office of the house of parlament.If he realy cared,he would see that the people of Canada would,not have to pay to much for the dayle living.That is absurd,since the 1970 the prices went up 850% for absolutly every thing.So what must happind in Canada,,,, a radical change,in the goverment.You young people,if you let the goverment go out of control,you will pay for this act when you will be old age pensioners.
Posted by: Italo Coletta | Jul 2, 2021 7:11:26 AM
Being a small landlord I noticed that many people see mye and my peers as a bunch of greedy bastards trying to make money at the expenses of the needy.Most of us i think are very considerate people that work hard for their money. The view is seems is that rental business is like a charitable organization and should be a non profit business. It is the job of our government to provide for the needy, it is the job of the government to subsidize rent for whoever cannot afford them either thru a check at the end of the month or thru tax credits at the end of the year.Morgagee, taxes and utilities do not give a credit to anyone, nor they consult me or ask if i like their fees or increases. Some people think landlord make a lot of money (do we?),i think banks, large corporations make money at the expenses of everyone, this dos not include politicians and cities who squander tax payer money, why not put cap on the banks, and everybody else?
It is getting to the point that if a landlord increases its rent he or she is a greedy bastard, and if a tenant does not pay the rent he is a hero and the landlord deserves it! I could go on and on over the issue of landlordl and tenants rights, but at this point it is futile issue: So i will keep on doing what i have done before, Mantain my building, screen all tenants, lease only to people who can afford it, try not to lease to alchoholics, drug addicts,dealers, generally avoid people who can give me as a landlord problems and can harras my other good tenants then keep on smiling even when a bad apple falls thru the cracks.
Posted by: Diane | Jul 2, 2021 7:35:53 AM
Although a lot of renters do spend money on cigarettes, alcohol, pets and vacations, some renters (like me) are underemployed and working full-time. I don't smoke, have pets, drink, or splurge on big vacations, and I have trouble saving up and paying rent. It does anger me to see how I'm working, and how disgusting people leave the apartments runned-down and overpriced. So, the price freeze isn't a disadvantage for people like me.
Posted by: Robert S. | Jul 2, 2021 8:53:56 AM
I have read all comments on here and have to agree with parts of all . I am a blue collar worker of many years where I am . In said time I have seen 3 minor pay increases . Yet daily need have sky rocketed , gas prices outa control .... heck we pay more then most US states on a converted $ per gallon by more then $1 in most cases . Everything goes up taxes , payroll dedustions for health care car and basic insurances home and health and yet wages are staying relativly the same . I understand it takes money to cover these costs but at what point is the poverty line going to be $50 G and not the $30 mark ...... balance it out a little more to make it so people can cover their backs and keep what they have now . Maybe barting systems could play a partial roll to offset these costs who knows . Just a thought . I do know however that if some kind of ballance isn't put into place soon we'll see more and more people out of work out of homes and on the streets . Dose our govenment really want that or do they want to get off their 6 and 7 digit incomes and try living in the $30,000 mark like the rest of most hard workers . Just a thought but watch the "Under Cover Boss" shows to see how big execs have their eyes opened to whats really going on out there . Some great insites to open the governments eyes to all out there .
Posted by: Robert | Jul 2, 2021 9:51:38 AM
Checking the rental increases? About $100 ~ $150 per month.
Not just that.... you are now charged $35 ~ $50 per month
for parking on top of that ( another sneaky way to increase ' Rent' ).
Many Landlords have also changed from " inclusive rent "
to rent "plus utilities" taking another big bite out of tenants.
What next ????
When more people are living on the street, and those
high priced apartments are all sitting vacant maybe they will
wake up and ' smell the coffee '. How will landlords pay their
operating expenses then?
What I really find hilarious, is the increase in minimum wage.
Looked at your pay check lately?
$7.50 ~ $10 per hr. hmmmm....
Actual take home pay is about 10% less than when you
were making $7.50 per hr.
All of your deductions increased, your rent has increased,
most foods in the grocery store has increased almost 50% !
Everything is based on that $2.50 per hr. increase.
Landlords and ' vendors ' increased everything accordingly,
not really realizing the impact on peoples lives?
The government is inevitably creating a 'criminal society '.
May God save us, the government sure won't.
Have a Great Day......if you can.
Posted by: Frank | Jul 2, 2021 10:02:18 AM
Nick: If you have rented "All your life." then you have no knowledge of any value concerning the management of property. The idea that people are entitled to low cost housing that is managed by the private sector and controlled by governments looking to be re-elected every 4 years is absurd. My family has been in property management and ownership for over 50 years. We have seen it all. If people want high quality rental property then make the market competitive. If you have rented all your life then you are satisfied with the way things are. Rent control is nothing more than a government tool used manipulate votes in high density ridings. Buy a house and experience some responsibility it might open you eyes a bit.
Posted by: Dilip Samuels | Jul 2, 2021 10:29:08 AM
Capped rents are OK in recessionary times
The problem is the Property TAX Increase don't stop at 2.5%
Maintenance fees go up at 5% every year
Posted by: Elnik | Jul 2, 2021 10:45:51 AM
It's a tough one, as I am a tenant, but do understand some economic laws and for the most part, price controls don't' work in the long run. I am a tenant and would love to pay less for rent, but I'd also like to pay less for food. What people are ignoring is INFLATION. The government lies to us about inflation to avoid being criticized for their economic policies which are that of intervention in the free market. The high real estate prices in toronto and vancouver stem from Canada's central bank keeping interest rates artificially low and the fiscal policy of the govt encouraging people to get into debt. The rental market seems to be reflecting that it is cheaper to rent than to buy, but so many people have bought condos and such that I think there could be a crash on the horizon. I hope we all get through this, but I live in Qc and this place is loaded with debt and the people are so ignorant about it. I have 0 debt and have a high school diploma, that's all, but I have always understood, instinctively, that you cannot consume more than you produce over the long term whether as an individual, a couple/family, city, province or country, it is not sustainable.
Posted by: carl bro | Jul 2, 2021 10:55:31 AM
I worked my ass off to pay for my first home.. No vacations or many weekends off or time spent with the family.. it seems the welfare tenants all have tv cable subsidized housing and no accountability as to looking for work.. they get lots of free things but won't bother to work for anything..I know of 1 family where grandmother to granddaughter all on welfare..each using the other to survive.. thats 3 generations of welfare..maybe were stupid and work for what we have, they lay back and like the parasites they are live off our taxes..welfare isn't suppose to be a career life style..as a property owner I've seen the worst..and as a property owner you have to be extremely careful who you rent to.. it's hard to evict people who won't pay rent refuse to work or get a job but do have cash for their drugs and booze cable and of course the needed cell phones..
Posted by: Canadian | Jul 2, 2021 10:58:19 AM
I think the issues being addressed by everyone here in one way or another have merit. There are good landlords, bad landlords and I rented for 10 years before I could afford my first house. The rate cap is a novel idea by the government to try to cap rising costs for renters but unfortunately there's no cap for owners. I have a rental now and in March the electricity was switch to Time of Use rates. The very next day the Energy Board approved rate increases and now my hydro costs have gone up 30% on the rental property in 1 month and my own house up 15% (my house rate is half the increase as rental since I care about when I use energy). How will 2.5% keep up to that. Natural Gas is set for another increase and water just went up 3.8%.
For those who rent and haven't owned, you can't complain for owners wanting to make a profit. If I don't make a profit on the rental, there is no rental.
I worked very hard to get ahead. I have sympathy for seniors on fixed incomes and those on disability pensions as their government cheques never go up to keep with inflation, but then my paycheques don't either. So here's to the reality of our country - cost increases are exceeding pay for the vast majority of us.
In time, who knows what the future for Canada looks like for the average citizen.