Rent hikes kept down
By DENIS LANGLOIS, SUN TIMES STAFF
Landlords in Ontario cannot raise a tenant's rent, in most cases, by more than 0.7% in 2011, a guideline that is winning praise from local anti-poverty advocates and being called "ridiculous" by the head of a landlords' group.
The increase, which is set each year by the provincial government, is the lowest in 35 years. Last year's maximum was 2.1%.
"Finally, something is going in the right direction," said Francesca Dobbyn, executive director of the United Way of Bruce-Grey.
It will provide some relief to tenants, who must deal with skyrocketing utility costs and significant increases to other living expenses, she said.
The province sets a rent increase guideline each year. It is the most a landlord can boost an existing tenant's rent without approval from the Landlord and Tenant Board.
Rent, in most cases, can be increased up to the provincial maximum once a tenant has lived in a unit for 12 months or after a year has passed since the last increase.
The province says the rent increase guideline is calculated by averaging the percentage change in the Ontario Consumer Price Index during the previous 12 months, from June to May.
"The McGuinty government is providing real protection for tenants by linking the rent increase guideline to the Ontario Consumer Price Index, which prevents routine rent increases above the rate of inflation, while ensuring landlords can recover increases in their costs," Jim Bradley, minister of Municipal Affairs and Housing, said in a statement.
But Stuart Henderson, a spokesman for the Ontario Landlords Association, said setting the the cap -- which would add $5.60 to $800 rent -- is a purely political move that does not make economic sense for landlords.
"I don't think anyone wants to gouge tenants in a bad economy, but basically we want to have some flexibility for repair costs. And with the HST hitting as it did and also the huge increase in the utilities, 0.7% is just very political and, we feel, ridiculous," he said in an interview.
The OLA, which represents "small business" landlords, is asking for a "normal" maximum increase in the 2% range, Henderson said.
"We just feel it's a very political move by the McGuinty government, with an election coming. What we feel they're trying to do is to have a good image, by stating 'We're protecting tenants in Toronto' because they have a lot of seats in Toronto," he said.
The 0.7% maximum increase is creating a challenge for landlords to stay in the rental business, he said, and could act as a disincentive for people thinking of renting out a basement or a few units.
Colleen Purdon, an Owen Sound city councillor and researcher of rural poverty, said many people living on social assistance or a fixed income are struggling to pay for housing and food costs, so a tight cap on rent increases is welcome news.
"It's great news for people struggling with all kinds of other increases," she said.
Ontario Works payments are not increasing, she said, but living expenses continue to climb.
The average rent for a two-bedroom apartment in Owen Sound is $769 per month.
While the cap is welcome news, Purdon said the province should be doing more to help build affordable housing units in the area.
"But that's another issue," she said.
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