We Want To Hear From The Small Landlord Community. The Ontario Landlords Association Will Be Making a Submission to the Ministry Sharing Your Thoughts & Concerns on a Bill Which Could End the Exemption That Allows Rental Properties To Avoid Rent Control If The property Was Built After 1991
Real estate prices have appreciated greatly in Toronto and the GTA over the past several years. And it looks like property prices will continue rising in 2017.
With these rising property prices, many areas have also seen rising rents. This has led to politicians looking to make changes in how the residential landlord-tenant system works in Ontario.
Why are rents rising?
It’s because most of the new rentals on the market are due to the investments of hard working and risk taking small landlords and investors. These are often working people who invest in a “income property” as a nest egg to help their financial future.
With costs rising these small landlords need to charge rents that cover their costs of owning the property. With prices rising, they also have to spend more buy the property. As they are also small business people they have invested with the goal of attaining at least some sort of profit.
Who are these Ontario landlords?
Many of these investors/landlords are people like you reading here. They are people who have jobs and are working very hard to build for their retirement.
They save their money, and invest…taking a risk to provide high quality rental properties for tenants with the hopes of a fair and decent return.
These investors/landlords include teachers, fire-fighters, police officers, dentists, contractors, secretaries, nurses, truck drivers, small business owners, retirees, etc. These are the people who make up the OLA community.
These investors and landlords are not rich corporations hoping to build their share price on the Toronto Stock Exchange.
What changes are being proposed?
An NDP member has put forward a private member’s bill that will end the rent control exemption for rental properties that were built after 1991. The NDP claims this exemption puts tenants at risk and is putting many people who rent in a difficult situation.
What is the 1991 exemption all about?
We have written about the 1991 rent exemption before. In fact, before the OLA began discussing this it was rarely mentioned in the media and few people even knew about it. As with so many aspects of the rental business in Ontario after the OLA began discussing the issue it became well-known and a “hot issue”.
Why is this such a hot issue now?
It’s because rents are increasing. A Global News report said the average rent for a Toronto condo is now over $2000/month. So many tenants are justifiably concerned about rent increases and being able to afford being able to stay in their rental property.
What Do OLA Members Say?
Our landlord community consists of landlords all over Ontario. And we have owners of all types of rentals. These range from condos to basement apartment rentals to duplexes and even larger buildings.
The issue of rent control has been a big issue for our community for years. When this latest development was announced landlords were quick to begin to share their thoughts and concerns.
Here are some of the thoughts and points of discussion in our busy member forum.
(1) This is a Business And I Need To Keep Up With Costs
Many landlords worry about being able to cover their costs. They aren’t out to “gouge” tenants (as successful landlords know how valuable good tenants are). If rents can’t be raised to cover costs it will lead to financial hardship, especially for small landlords.
Others stated that landlords take a risk when buying a property to rent out and our investments are important to the Ontario economy. As they are running a “business” they need some flexibility in how they operate.
An Ottawa landlord said investors like her fund the construction industry and the building trades. We hire property managers and provide business to real estate agents.
We are also the people who are providing new rental accommodations. Changing the rules for rent control will impact jobs and the entire Ontario economy.
(2) I Bought My New Build Rental Property Because of the 1991 Exemption
Many new landlords who bought condos are shocked at the news that they may be covered by rent control.
One new condo investor wrote that if the exemption is stopped she will never ever trust this government again.
(3) My Rentals Aren’t in Downtown Toronto and If I Raise Rents Too High Tenants Will Just Move
Some landlords think the government is too focused on the situation in Toronto and not aware of how things work in the rest of Ontario where real vacancy rates are not that low. A Barrie landlord said while having the freedom to cover costs is important, if she raises rents too high her tenants will simply move.
(4) The 1991 Exemption Is Unfair To Landlords With Older Rental Properties Because The Rent Increase Guideline is Far Too Low
Many members of our Ontario landlord community own older homes. A Newmarket landlord said he buys older homes, invests his hard earned money to fix them, renovates them, makes them attractive, and then rents them out. He wonders why are these landlords punished with an extremely low annual rent increase guideline that is capped?
(5) Let’s Get Rid of Rent Control for All Rental Properties in Ontario Whatever the ‘Age’ of the Property
Some members of our community believe the real solution is to end rent control for all Ontario rental properties. This would lead to a lot more investment into rentals. This would give tenants more options and good landlords with great rental properties would be able to invest more with confidence.
Proposal To End the Rent Control Exemption on Properties Built After 1991
It seems so simple at first glance. The headlines are all about tenants who are being priced out of their rental property as rents rise.
In reality it’s more complicated.
The issue of rent control and rental properties requires serious research and the input of all stake-holders.
And small landlords are key stake-holders and our voices need be heard.
The Concerns From Tenant About Ridiculous Rent Increases Is a Serious Issue
Many of our members rented before and are concerned about the challenges tenants can face with a ridiculously high rent increase. The problem is legislation covering both large corporate landlords and small landlords will hurt the ‘small players’ who take tenant concerns seriously.
For example one of our members wrote “Good tenants are the key to success as a landlord and investor. I haven’t even raised rents on my good tenants for the past three years because I value them!”
Another landlord said: “Okay, make it fair for all rentals of all ages but make the annual rent increase more reasonable because now it’s far too low!”
Improving the Ontario Rental Industry to Benefit Landlords and Tenants
The stakes are high as any knee jerk media friendly policies could seriously impact the Ontario rental industry in a very negative way. This will hurt both good landlords and good tenants.
Bad policy decisions based on media click-bait stories can lead to very bad results for landlords and for tenants. It’s important the government meets with all stake-holders before such an important policy decision is made.
We will make a submission to the province and want to hear your landlord and tenant concerns about rent control. Contact us at email@example.com.
We will make sure your voices are heard.
Any new policies regarding rent control need to be part of a much larger overhaul of the Residential Tenancies Act and the Landlord and Tenant Board. Let’s improve the Ontario rental industry for tenants and small landlords who have invested in properties.