Some tenants left struggling as pandemic rent freeze ends
‘It’s a free-for-all’ for units not under rent control, lawyer says, as GTA market heats up again
Ontario tenants in newly built units are facing a return to unrestricted rent hikes as the government prepares to lift a freeze imposed during the pandemic. As landlords give their 90 days’ notice for increases in the new year, one woman says she’s facing a more than 20 per cent jump in her monthly rent bill.
It’s a return to the system enacted by the Ford government in 2018 — which scrapped rent control for units first occupied after Nov. 15 that year, with the change presented as a way to encourage investors to construct more homes and boost rental supply. The government later froze increases for tenants in those homes, along with rent-controlled units, due to the economic uncertainty caused by the COVID-19 pandemic.
The return to the former rules has left Sarah Forrest — who rents a threebedroom, newly built home in Oakville for herself and her two kids — facing notice of a double-digit increase to her rent bills.
“I just wanted to throw up,” said Forrest. She expected to see an increase of some amount, but a notice informing her that her $2,800 rent would go up to $3,400 left her reeling.
For landlords in non-rentcontrolled units, increasing costs by that amount doesn’t break any rules. But Forrest says that for a single mom, finding an extra $600 a month will be tough.
“There’s a certain category of units where, all of a sudden, it’s a free-for-all,” said Benjamin Ries, a lawyer with Toronto’s Downtown Legal Services who works on residential tenancy cases. For rent-controlled units, the maximum rent increase for next year is set at 1.2 per cent.
Ries is among critics of the province’s rent control regime, arguing it was inconsistent to have a freeze that applied across the board, then return to a system where some units are exempt from regulations.
“We need rent control to extend to everyone, because (I) don’t buy the idea that an exemption from rent control — a full exemption — is what’s necessary to incentivize rental housing construction,” he said.
While he’d expected to see rent costs rise in uncontrolled units for 2022, he was surprised by how quickly the rental market has seemed to recover from its pandemic slump — conditions that he believes emboldens landlords to seek “giant increases.”
According to an analysis by Rentals.ca, Toronto’s condo rental market alone has seen a 15 per cent increase in average rents since February, when rent costs hit a particularly low point. Competition for apartments is expected to become stiffer in response to recovering demand.
While the pandemic previously saw some landlords offering incentives to attract potential renters, industry players now see signs of the market flipping to the other direction. In one case recently reported by the Star, a tenant claimed they’d been asked to pay five months’ rent up front to lock down a Toronto condo.
Tony Irwin, president of the Federation of Rental-Housing Providers of Ontario, said property owners saw an uptick in costs such as taxes, utilities and insurance during the pandemic.
He believes the 1.2 per cent cap on increases in the rent-controlled sector can help offset some of those demands, and also backs the exemption for units first occupied after Nov. 15, 2018, agreeing with the provincial government’s stance that it serves as an incentive particularly to create purposebuilt rentals.
But while he declined to comment on particular cases, he said instances where landlords were levying steep increases were indicative of a market where demand vastly outstrips supply.
If there were more supply in the rental atmosphere, he believes the market would likely be less volatile, and the “broader issue” of steep increases would be less acute.
“It tells us we need to get back to getting more housing built,” Irwin said of the recovering rental market.
Forrest’s landlord, Ragaie Rofaiel, reached by phone Thursday, declined to speak with the Star.
Forrest said she struggled when searching for her current place, and spent months scouring the market. Time after time, a unit would go to someone else, as she faced a deadline to leave her old home. New owners had taken over the unit, she told the Star, and she had agreed to vacate.
Now, she’s left weighing the extra costs per month against the upfront costs of a move elsewhere — and feeling frustrated about the potential increase when the new year hits.
“I was just mind-blown,” she said. “I expected it to come up to $3,000.”
While some landlords previously offered incentives to attract potential renters, industry players now see signs of the market flipping to the other direction