Maximum rent increase holds steady at 2.4 per cent

By Megan Walchuk

The Ontario government has opted to hold rent increase guidelines for 2024 at 2.5 per cent – same as 2023 levels. The rent increase guideline is the maximum amount a landlord can increase rent during the year for most tenants without the approval of the Landlord and Tenant Board.

Newly created rental units, which were not occupied for residential purposes before November 15, 2018. It also doesn’t apply to vacant residential units, community housing, long-term care homes or commercial properties.

In recent years, the guideline was set at 1.2 per cent in 2022, and frozen at 0 per cent in 2021. The highest rent increase guideline was 6 per cent in 1992, with the lowest at 0.7 per cent in 2011. The average guideline over the past 34 years, is 2.4 per cent.

Maximum rent increase guidelines are announced annually, before August 31 each year. Landlords wishing to increase rent beyond the guideline must apply to the Landlord and Tenant Board, and provide proof of paid and completed capital investments, from a list of eligible upgrades, or proof of significantly increased services. Those rent increases are capped at three per cent above that year’s guidelines, putting this year’s increase at an absolute maximum of 5.5 per cent, pending Landlord and Tenant Board approvals.

Rent increases are not automatic. A landlord must give a tenant at least 90 days written warning of any rent increase, and at least 12 months must have passed since the last rent increase, according to legislation.

The new guideline has drawn criticism from the New Democratic Party, which feels the cap is too high.

“Jacking up the rent for millions of Ontario renters is only going to make the Ford Conservatives’ housing affordability crisis worse. 2.5 per cent is a huge increase, especially when you consider that rent is already so high, and most Ontarians’ wages haven’t kept up,” said a statement by the NDP.

The party is also concerned about the exemption for newly created units.

““If you’re in a rental first rented on November 15, 2018 or later, the sky’s the limit as far as how high your rent can go up, thanks to the Ford Conservatives’ massive loophole,” noted an NDP release. “Ford’s housing plan isn’t working because they’re more interested in helping developers and not Ontarians struggling to find affordable places to live.”

However, the rising cost of living was the reason for the 2.5 per cent cap. The guideline is based on Ontario’s Consumer Price Index, a measure of inflation calculated by Statistics Canada using data that reflects economic conditions over the past year. Without the cap, the recent rate of inflation would have resulted in an increase of 5.9 per cent in 2024, noted a government release.

“Our government knows the cost of living continues to be a challenge for many Ontarians, including renters, which is why we are holding the rent increase guideline at 2.5 per cent,” said Steve Clark, Minister of Municipal Affairs and Housing. “This decision builds on the historic tenant protections contained in our recent Helping Homebuyers, Protecting Tenants plan, and demonstrates our commitment to help tenants across the province.”

The NDP feel a more comprehensive approach to housing is needed, to help make housing more affordable.

“We need a comprehensive strategy to solve our housing crisis, starting with bringing back strong rent control on all homes, including vacancy decontrol—where a new tenant pays the same rent as the previous tenant,” said the NDP release.