Pressure mounts for Ontario to extend rent controls to all tenants

Sacha Proctor has become a regular on the closed social-media site since he and his girlfriend Leslie Hohmeyer were told the rent on their two-bedroom loft at Lansdowne Ave. near Dupont St. was jumping to $1,500 a month.

That’s an almost 18 per cent increase in just two years.

“Apparently this is what happens when you bring up maintenance issues with the landlord here,” posted Proctor, 33, a video editor.

What he found out next shocked him even more — that annual rent hikes ranged from minimal to more than $1,100 a month in the 484-unit complex, apparently depending on the tenant, and that the province’s Landlord and Tenant Board is powerless to stop it because the Standard was built after November 1991 and, as such, not subject to rent controls.

The property management company for the Standard Lofts said via email that “we are operating according to the law” and stressed that “rents are raised to what the market will bear and decreased if rents are over market so as not to lose tenants.”

But Toronto city councillor Anthony Perruzza is so concerned about similar complaints from tenants in his renter-heavy North York ward, that this week he introduced a motion before executive committee urging the province to make all rental units — including investor-owned condos — subject to rent controls “to level the playing field” in the city’s tight rental market.

NDP MPP Jonah Schein has started an online petition and his party plans to introduce a bill next week aimed at ending what tenant advocates call “a two-tiered system of renters in Ontario” — those in older buildings where rent increases are limited to about 2.5 per cent this year, and those in apartments or rental condos occupied after November 1, 1991 where increases aren’t capped.

Landlords have been fiercely critical of efforts to extend rent controls, saying they will make rental housing uneconomical for owners and shut down what’s been a pickup in new apartment construction.

“We’re not seeing a lot of big rent increases, but we are hearing that some tenants are surprised to find out after the fact that their building is exempt from rental control due to the year of construction,” said Mike Chopowick, manager of policy for the Federation of Rental Housing Providers of Ontario.

The property management company which oversees Standard Lofts, Firm Capital Properties Inc., says “it is not about 10 per cent or 15 per cent increases, it is what … we can obtain in the open market that determines rent.”

And that’s the problem, say politicians and tenant activists, when Toronto’s vacancy rate is now hovering at about 1.4 per cent and rents have been escalating, especially in downtown condos owned by investors where the average rent hit a record $1,856 a month in the first quarter of this year.

This week Jermaine Smith, 26, his girlfriend and her two young children were forced to move out of the Standard Lofts in the face of a rent hike from $1,375 to $2,500 a month, after complaints from other tenants that Smith’s dog was urinating in the hallways.

Smith denies the allegations, but says his girlfriend cleaned the carpet when asked: “I’ve never in my life heard of a rent increase like that, but there was nothing we could do but move.”

Tenant advocates call that economic eviction and say they are hearing about it in post-1991 buildings as a quick way to get rid of trouble tenants or bring in higher-paying tenants.

David Pruss, chief operating officer for Firm Capital, declined to discuss wildly varying rent increases in the Standard buildings, or specifics of Smith’s $1,100 rent hike, other than to say it was related to “the safety and well-being of other tenants.”

“Maintenance issues or request (sic) for maintenance work have nothing to do with rent increase amounts,” he added.

According to Facebook posts, some tenants have managed to negotiate small increases while others face hikes double and triple what would be allowed under Ontario’s Residential Tenancies Act in an older building.

“Our landlord is using this (exemption for post-1991 buildings) law to single out tenants and raise rents by random amounts,” says Proctor.

When he and his girlfriend asked Firm Capital staff if they could move into a cheaper unit, Proctor says they were told no.

“We only started talking about the rent issues a few months ago (on Facebook) because people were starting to get these rent increases. Nobody seemed to know about this loophole until it happened to them,” says Hohmeyer.

“Others are scared, wondering what will happen to them.”

Many have had to move out, says long-time Standard tenant Ellen Gerrior, who had to give notice when told rent was jumping by 5.5 per cent, a year after a similar increase, to $900 for her tiny bachelor unit.

Gerrior, 30, is awaiting disability allowance for debilitating post traumatic stress disorder and can’t afford anything else in Toronto on her welfare payments. She’s moving in with her mother, two hours north of Toronto, and will couch surf at friends’ houses when she needs to come here for treatments.

“I’m not complaining. I specifically don’t complain and I’ve stayed on pretty good terms,” says Gerrior. “I would have stayed if I could, but I can’t eat and pay my rent now.”

Other tenants contacted by the Star would only talk on condition their names not be used, but said they believe the increases are largely because the once derelict industrial area is close to the up-and-coming Junction Triangle.

Tenants complain they feel powerless to protest for fear of being hit with even bigger hikes a year later.

Premier Kathleen Wynne has acknowledged that current laws make for “a bit of an anomalous situation for some of the tenants in newer buildings” but there are no plans, at this point, to make changes to the Residential Tenancies Act.

Ontario’s Advocacy Centre for Tenants has been pressing for better rent protections and says it’s been estimated that some 55,000 to 65,000 people live in rental units across the province built post 1991.

The federation of landlords estimates just 10 per cent of rental apartments were built post 1991, but acknowledges that investor-owned condos — where rents are also uncapped — have become a key part of Toronto’s rental stock.

“It’s a lot of people, and it’s a lot of isolated people,” says the Advocacy Centre’s Kenneth Hale. “In earlier rent control battles, everybody in the building was facing the same issues together and it became a big issue because you had so many people affected all at once.

“Because this is individuals in a lot of different buildings — a lot of them in condo buildings — it doesn’t have the same public profile.”

The Federation of Rental Housing Providers of Ontario has urged landlords to alert prospective tenants on their leases if they aren’t covered by rent controls. But extending the Act would be “devastating” at a time when rents, and investor interest in apartment construction, is actually taking off after a “terrible” decade, said Federation president and CEO Vince Brescia.

Low interest rates that spurred a boom in home ownership over the last decade made it so hard for landlords to fill buildings and increase rents that, in real terms (factoring for inflation), rents remain about $100 a month less than they should be, said Brescia.

The costs of operating apartment buildings far exceeds the province’s 2.5 per cent rent hike guideline a year, and even rents of $1,856 don’t begin to cover the actual costs for investors of owning a newer rental condo, said Brescia.

Other provinces have done just fine without rent controls and limiting the ability for landlords to cover their costs would do huge damage to the recovering rental industry, he stressed.

“It’s been a great ride for tenants in Ontario and in Toronto the last decade. We shouldn’t just panic and make sudden regulatory changes without thinking through all the consequences.”

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