Toronto Rental Cost (& AirBnB) Issues

[freshcutgrass]

What do you think they are intended to do? The way rent control works in Ontario is not to surpress prices. It is, like the poster above you noted, to enhance security of tenor. It's a social good to stop people from getting priced out of their homes unexpectedly.

"Security of tenure" is just code for housing subsidy. If you need protection from the free market forces, then you need to get it directly from those responsible for it...tax-based gov't subsidy. As it stands, for pre-1991 purpose-built rental buildings, long term tenants paying below market rents are simply subsidized by the newer tenants. The average market rate would be lower if this two-tiered system were not in place. Those units are also taxed at roughly 3 times the property tax rates vs condos which is also payed by the tenant as part of their rent.

As for post 1991 condo units, security of tenure is not going to be fully protected by capping rent increases, as it's easy to get around that. These units tend to have higher turnover anyway, but the problem won't start to settle in until a few years from now providing the current supply and demand situation exists. And the vast majority of new rental stock is going to be condos, as the advantages are obvious.

How much damage these alleged changes will have in terms of lowering supply and just exasperating the current problem is anybody's guess.

 

[Bayer]

Those units are also taxed at roughly 3 times the property tax rates vs condos which is also payed by the tenant as part of their rent.

One of the new measures that was announced: "Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties. This will encourage developers to build more new purpose-built rental housing and will apply to the entire province."

 

[LMVDR]

Consider the following:

Mom & Pop condo landlords become either fed up with or petrified of rent control and ever escalating operating costs for their units and choose to dump them on the market for sale. This accomplishes three counter acting changes:

1. Increases the availability of entry lower, level priced condo units
2. Decreases demand for new, higher priced entry level condo units
3. Decreases the inventory of condo rental units by removing them from the shadow rental supply market as new buyer become end users

And, presto! Fewer new investor units are bought+existing investor units shrink= Rents go UP.

And if anyone think the modest new rental construction subsidies announced will remotely counteract the effects of 1-3 then they are delusional as Wynne is Machiavellian.

 

[Bayer]

The thing about mom and pop owners is that they don't form a predictable category. An acquaintance rents a 730 sq ft condo downtown for $950 a month. No increases in 15 years.

 

[freshcutgrass]

One of the new measures that was announced: "Ensuring that property tax for new multi-residential apartment buildings is charged at a similar rate as other residential properties. This will encourage developers to build more new purpose-built rental housing and will apply to the entire province."

Until the City of Toronto passes such legislation (whom are responsible for property taxes), lip service from Queen's Park means little. At least it's encouraging to see it acknowledged.

 

[freshcutgrass]

The thing about mom and pop owners is that they don't form a predictable category. An acquaintance rents a 730 sq ft condo downtown for $950 a month. No increases in 15 years.

Either they are incredibly great tenants...or the owner is a bad business person.

That's one of the major problems people don't tend to take into consideration with all these condos representing a larger and larger percentage of the rental housing inventory....the vast majority are non-professional landlords.

Remember...a lease is just a business contract. And I wouldn't deal with a non-professional landlord any more than I would a non-professional dentist.

 

[Filip]

Does anyone have more detail on the compensation required for evicting a tenant for landlord use?

That's a reasonable use case for many landlords (ie: children going to school, need housing, etc). Aside from a 2 month notice, what is reasonable compensation? It's the nature of the business that if you rent, you risk being out of a home at some point in time.

A people's right to housing shouldn't supersede people's right to their property (and how to use it within reason).

 

[freshcutgrass]

Does anyone have more detail on the compensation required for evicting a tenant for landlord use?

That's a reasonable use case for many landlords (ie: children going to school, need housing, etc). Aside from a 2 month notice, what is reasonable compensation? It's the nature of the business that if you rent, you risk being out of a home at some point in time.

A people's right to housing shouldn't supersede people's right to their property (and how to use it within reason).

A Form N12 (Landlord's Own Use) requires a minimum of 60 days notice assuming the lease term expires within this time. A tenant could plead their case if they took it to the Board, and the Board could delay that termination if they found the hardship to the tenant to be severe enough. But generally speaking, it is your right under the law and it would be very unusual for the board to deny that right. If the tenant feels you are serving them the eviction in bad faith, it is up to them to appeal to the board with proof, and that is very hard to prove.

There's no such thing as a "right" to housing.

 

[Filip]

A Form N12 (Landlord's Own Use) requires a minimum of 60 days notice assuming the lease term expires within this time. A tenant could plead their case if they took it to the Board, and the Board could delay that termination if they found the hardship to the tenant to be severe enough. But generally speaking, it is your right under the law and it would be very unusual for the board to deny that right. If the tenant feels you are serving them the eviction in bad faith, it is up to them to appeal to the board with proof, and that is very hard to prove.

That's understood (these are the current rules), but this new package of tenant-focused rules the government put forth includes 'reasonable compensation' for tenants evicted for landlord use. Trying to understand what reasonable compensation means and is it quantified.

 

[freshcutgrass]

That's understood (these are the current rules), but this new package of tenant-focused rules the government put forth includes 'reasonable compensation' for tenants evicted for landlord use. Trying to understand what reasonable compensation means and is it quantified.

Oh sorry...thought you were enquiring about the status quo.

What does vague comments about "tightening provisions", and "ensuring adequate compensation" mean?

Absolutely nothing.

 

[Filip]

Oh sorry...thought you were enquiring about the status quo.

What does vague comments about "tightening provisions", and "ensuring adequate compensation" mean?

Absolutely nothing.

Thanks for the help, guess we'll have to wait to understand what all these buzzwords mean.

 

[freshcutgrass]

They can't prevent you or your immediate family from occupying your own property, so the most they could do is add to the notice time. I can see this going from 60 days to 90 days...same as notice for a rent increase.

Tenants are going to need that extra month to look for an even harder to find and more expensive rental if the current policies get implemented.

 

[freshcutgrass]

There's going to be another big problem if they do reduce the non-condo commercial rentals tax rates to residential rates.

Two problems actually. The first and obvious one will be a huge reduction in tax revenue to the city which will have to be made up somewhere else.

Secondly, since tax reductions are passed on to all tenants ( they can automatically reduce their rents by the percentage of the tax reduction), existing tenants will get huge rent reductions, further requiring new market rates to jump to compensate.

The wise thing to do....instead of evening out the playing field by applying rent controls to all units....remove them from all units instead.

 

[Bayer]

The wise thing to do....instead of evening out the playing field by applying rent controls to all units....remove them from all units instead.

Completely disregarding the human costs of this, of course.

 

[Bayer]

What does vague comments about "tightening provisions", and "ensuring adequate compensation" mean?

Absolutely nothing.

From the bill's explanatory note:

Currently, subsection 48 (1) allows a landlord to give a termination notice if the landlord requires possession of the rental unit for the purpose of residential occupation by the landlord, a member of the landlord’s family or other specified persons. Under subsection 48 (1), as amended, the landlord must require possession for the purpose of residential occupation for at least one year. Under new section 48.1, a landlord who gives a termination notice under section 48 is required to compensate the tenant in an amount equal to one month’s rent or to offer the tenant another unit acceptable to the tenant.