A group representing local landlords is urging the province to scrap a proposal to freeze residential rent increases in 2021, saying the plan would discourage “desperately needed” new investment in rental housing and leave property owners holding the bag for rising utility costs and taxes.
Ontario’s Ministry of Municipal Affairs and Housing said last week it was considering a move to put the brakes on rent increases at rent-controlled units in a bid to provide relief to tenants whose incomes have fallen as a result of the COVID-19 pandemic and the resulting economic downturn.
Each year, the province caps the amount landlords are allowed to raise rent, with the maximum increase generally tied to the rate of inflation. For 2021, the rate would have been 1.5 per cent.
“But this year is not like every year,” the province’s news release said, adding the government intends to consult tenant and landlord groups “to ensure the proposed legislation is fair and balanced.”
But the province’s plan didn’t sit well with the Eastern Ontario Landlord Organization, which is instead calling on the Ford government to offer a direct subsidy to tenants in need rather than impose a blanket freeze on rents.
“It is true that some tenants are having difficulty paying their rent,” the organization’s chair, John Dickie, said in a statement last weekend. “But many tenants are fine financially, and freezing rents for all tenants does very little to help the tenants in need.”
Dickie said landlords are facing their own financial hardships due to increases in property taxes and utility costs. He said landlords need to be able to raise rents to help cover rising expenses, “especially while we are not receiving the agreed rents from tenants in financial trouble.”
He added that the proposed freeze would send the signal to potential investors that Ontario “is not a good place in which to build rental housing.” Dickie called the move “a step backwards, signaling fear and irrationality.
“If it imposes a rent freeze, the Ford government will be discouraging investment in rental housing, something that is desperately needed.”
Founded in 1990, the Eastern Ontario Landlords Organization represents the owners and managers of more than 40,000 rental suites in Ottawa.