Rent control proposal coming soon: Wynne

The Canadian Press
Allison Jones
Jessica Smith Cross

TORONTO–Ontario’s premier says she isn’t buying an argument from the development industry that stricter rent control will do more harm than good for renters in the province.
Kathleen Wynne’s comments Tuesday came amid reports of some residents in Toronto seeing their rents double–a situation the premier called “unacceptable.”
Developers and economists have warned a new rent control law–which the Ontario government has said it’s developing–will discourage the construction of new rental properties, squeezing the already tight supply of rental homes.
Wynne threw cold water on those concerns, saying developers having been making that argument since she entered politics in 2003.
“The reality is there hasn’t been any more rental built, there have not been rental buildings built in any comprehensive way,” she noted.
“And so that argument does not actually hold water with me at this point.”
That runs contrary to a CIBC Economics report released Tuesday morning, which said the Greater Toronto Area is on the “verge of an historic transition toward a more rent-oriented real estate market,” and rent control would damage that.
“Even the very mention of rent control as an option is having a chilling effect on developers,” wrote economist Benjamin Tal.
“From recent discussions with some developers, we know that it’s already impacting decisions,” he noted.
Currently, annual rent increase caps in the province only apply to residential buildings or units constructed before November, 1991.
This year, the rent for those tenants could be increased by up to 1.5 percent without the landlord applying to the Landlord and Tenant Board, but there is no cap for units built after November, 1991.
The post-November, 1991 exemption dates back to a 1992 law–from the NDP government and intended as temporary–that has remained in various updated versions of tenancy legislation and become permanent.
Tal said purpose-built rental construction went through a long drought as a result of pre-1992 rent control, from which it is only now beginning to recover.
“The number of purpose-built units under construction is now north of 5,000, accounting for 16 percent of new supply,” he wrote.
“And as of the fourth quarter of 2016, there were almost 28,000 proposed new-purpose built units.”
In jurisdictions with rent control, maintenance of rental buildings tends to suffer, people tend to become less mobile, and some groups of tenants can be pitted against other tenants and their landlords, Tal argued.
He wouldn’t weigh-in on the premier’s comments, but cautioned against stopping more rental units from entering the market.
“Implementing rent control will make the situation worse,” he warned.
At Queen’s Park, NDP leader Andrea Horwath said her party has tabled a private member’s bill to extend rent control to all buildings, and the government can pass it at any time.
“It’s an untenable situation,” noted Horwath. “Can you imagine being a tenant that gets a notice from their landlord that in 60 days their rent is doubling?
“You can’t go to your employer and say, ‘Can you double my wages, can you double my salary, because my rent is doubling in two months’ time.'”
Progressive Conservative leader Patrick Brown said he welcomes any measure to make housing more affordable, and hopes the government brings forward its proposal soon.