Housing committee OKs rent hikes on affordable units
Above-provincial guideline increases a ‘compromise,’ Tory says
Councillors voted Monday to allow landlords to raise rents in units built with city land and other investments by two per cent above the provincial guideline as part of the Mayor John Tory’s affordable housing programs.
At the planning and housing committee, staff presented a much-delayed plan on rent control that recommended allowing increases above what is allowed annually by the province — this year, 2.2 per cent.
According to rental site PadMapper, the median rent for a listed one-bedroom in Toronto was $2,180 in June. If a market unit was similarly priced on one of the city-incentivized sites, a 4.2 per cent increase would mean an addition of $91 in monthly rent. The final decision on rent control will be up to council at a meeting later this month.
The request for rent controls on units built through the Housing Now and other city programs came after Premier Doug Ford’s government removed rent protections on new rental units in 2018. A November 2019 motion asked for staff to report back in January of this year on limiting rent increases in new developments receiving city incentives to the provincial guideline. It also requested the province reinstate rental controls on new units. The motion was supported by a majority of council in a 23 to 2 vote.
The executive director of the city’s housing secretariat, Abigail Bond, told the committee that the recommended ceiling of two per cent increases above the guideline balances the needs of market renters to find affordable homes and the city’s ability to market the sites.
“Without some flexibility, staff have determined that it may be difficult to stimulate the developer of both the affordable and the market rental housing at some sites,” Bond said, adding staff will work to negotiate rent controls closer to the guideline. The Housing Now program, developed as Tory’s signature affordable housing plan, offers free city-owned land and other financial incentives such as development charge forgiveness in exchange for a certain number of affordable units on those sites where developers can also build a majority for-profit market housing.
City staff estimate nearly $300 million in investments will be made on the first 11 sites under the program, not including the value of land.
As part of those deals, affordable units are secured at varying rates for what are expected to be 99-year leases. The rent control measures would be applied to market units, which would make up from half to a large majority of most sites.
On Monday, Tory, who previously said the developments receiving city incentives should be rent controlled, said he supports the staff recommendation, calling it a “compromise” to build affordable housing and providing some protection for market tenants from unlimited rent increases.
“It’s not perfect, but it is the best solution we could come up with to achieve all of those objectives.”
Kristyn Wong-Tam, who votes against the move, questioned the logic of allowing rent increases on market units. She said it sends the “wrong message” that city-funded properties be subject to above-guideline increases and that additional subsidy, if needed, to make the sites viable should not be borne by tenants.