Could new On­tario rules kill rentals?

Brad Lamb be­lieves pro­posed reg­u­la­tions will re­sult in fewer apart­ments be­ing built by de­vel­op­ers

North Toronto Post - - News - By Macken­zie Pat­ter­son

On­tario’s Min­istry of Mu­nic­i­pal Af­fairs and Hous­ing has pro­posed new leg­is­la­tion to con­trol rental prices and en­sure fair treat­ment of ten­ants. If the Rental Fair­ness Act, 2017, is passed, it will ex­pand rent con­trol to all pri­vate build­ings, in­clud­ing the 237,000 rental units built in On­tario af­ter 1991.

The bill was cre­ated in re­sponse to rapidly ris­ing rental prices across On­tario and in­equal­i­ties in the sys­tem. Along with en­forc­ing rent con­trol, the leg­is­la­tion would en­able a stan­dard lease, pro­tect ten­ants from un­fair evic­tion and re­move in­flated rent in­creases for util­i­ties. The leg­is­la­tion is part of a larger plan to grow the econ­omy, in­crease jobs and en­able af­ford­able hous­ing in the province.

“We know that a strong rental mar­ket in On­tario is one that bal­ances af­ford­abil­ity for ten­ants with the right con­di­tions for con­tin­ued in­vest­ment in rental prop­er­ties by land­lords,” said Min­is­ter of Hous­ing Chris Bal­lard in a press re­lease.

Ac­cord­ing to one prom­i­nent de­vel­oper, the new rules take away the in­cen­tive to in­vest in new rental build­ings.

Real es­tate de­vel­oper Brad J. Lamb said he has al­ready scrapped plans for seven apart­ment build­ings across the GTA be­cause of the leg­is­la­tion.

“I’ve de­cided that we’re not go­ing to build apart­ment build­ings in this cur­rent en­vi­ron­ment. We’re go­ing to prob­a­bly keep the prop­er­ties func­tion­ing as in­come prop­er­ties whether they’re com­mer­cial or re­tail, but we def­i­nitely won’t pro­ceed at this point with apart­ment build­ings,” he said.

Lamb said there wouldn’t be as great a re­turn with a cap on rates.

He es­ti­mates that be­tween the years of 2014 and 2016, there was about a 30 per cent in­crease in rent prices in the city.

“The point is that you could take that jump [in rent] when it was avail­able to you as an in­vestor, but if that jump is no longer avail­able to you, it’s just too risky.”

Lamb added that he’s spo­ken to other in­dus­try mem­bers about the new leg­is­la­tion who in­di­cated they would make a sim­i­lar move away from pur­pose-built apart­ment build­ings.

“In a condo, you can sell at any time, and the ten­ant’s gotta go, so that’s not re­ally great for some­one who’s try­ing to live their life and makes plans, and then all of a sud­den they get a no­tice that the land­lord is sell­ing and they have to move,” Lamb said.

“This is why pur­pose-built apart­ment build­ings are so im­por­tant for the province. They give peo­ple the abil­ity to spend a life­time in an apart­ment and ac­tu­ally plan a struc­tured life and a se­cure life.”

Brad Lamb at Post City Mag­a­zines’ re­cent real es­tate round­table

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