As a paralegal specializing in tenant rights protection, the recent change to rent control in Ontario has drawn my attention. In my view, losing the rent control mechanic is actually harmful to the renters and will not decrease the overall rental price in the long term.
What has changed in rent control?
Ontario government has been monitoring rent increase since 1991. However, the recent change in late 2019 excludes new buildings from rent control. It means that rental units first occupied for residential purposes after November 15, 2018, have no limits on their rent increase.
The change also modifies the law regarding the rent increase procedure. Right now landlords only need to give tenants proper notice, and after 90 days new rent will automatically apply.
What does this change mean to renters?
As renters who live in the units without rent control, you need to be aware that the increase of rent will be uncertain and uncontrollable. If you do not agree, there is no mechanic to prevent it. Consequently, you will have to decide whether to move out or accept the new rent.
Would lift of rent control become an alternative for the landlord to evict a tenant?
Imagine that you have been a good tenant, but your landlord still wants you to move out. In such a case, your landlord can evict you with legitimate reasons. However, without rent control, your landlord may just pose an incredible amount of increase in your rent, would you rather continue the lease agreement?
Rent control mechanic actually prevents landlords from doing this.
However, instead of going to the Landlord and Tenant Board (LTB) for an eviction order, the landlords may simply ask for a big increase in rent. Therefore, the tenants will likely just move out voluntarily. If they do not move out and refuse to pay the new rent, the landlords may just evict them for non-payment of rent. This is called constructive eviction.
Toronto Star posted an article on February 12, 2020. The article, “Toronto saw a 77 per cent rise in personal-use eviction applications over four years, date shows” indicated a drastic increase in eviction for landlord’s personal use application with the LTB. It is not a rare case already that landlords evict tenants for personal use, but their real intention is to re-rent the unit for a higher price. In my view, the lift of rent control just offers the convenience to landlords for eviction.
Whether the change will implement its purposes?
The government’s intent behind this change is to exclude the intervention of law on the residential rental market in Ontario. It believes that the free market will bring more supplies, and therefore, decrease the rental price in the long-term. I do not believe so.
In my opinion, the supply and demand for rental units will not change simply because landlords have more power to control tenants’ occupation. Instead, when a unit becomes vacant, the tenant will re-enter the market, which brings up the demand. Furthermore, when the demand increases, the rental price will rise too.
This change may also encourage more purchases of real estate for investment other than personal use, and it might deteriorate the affordable housing crisis.
Last but not least, if the rental price expects to see a decrease in the long term, I believe there should be a drop in the supply of rental units. Some landlords may withdraw themselves from the rental market because it is no longer profitable.
Why tenant rights matter more than the landlords’?
Renters need a home to live, but landlords are profit-driven. This is the essential difference between the two. For landlords, it is relatively easy to replace tenants. For tenants, losing home may cause serious consequences.
Protection of tenant rights is and always will be one of the biggest issues of the society. Low-income residents largely rely on the government for either allowances or social housing, and it requires tons of funds to maintain it.
From a legal perspective, I do not believe the government made the right move. Fortunately, the current impact of this change remains minor. Nonetheless, if the government continues lifting the rent control, increasing concern of losing their home will certainly grow among tenants.
Pan is a licensed paralegal (Ontario) and lawyer (China). He is a tenant rights advocate and LGBTQ advocate. For more information about him, please visit the About Us page.