Toronto housing official wants vacancy decontrol scrapped

Toronto’s top housing official wants to see the end of an Ontario rule that allows landlords to raise rents by any amount between tenants — arguing the change could help curb the financial incentive for landlords to eject long-term renters.

The rule, known as vacancy decontrol, means that while current tenants in rent-controlled homes are guaranteed an annual cap on rent increases, there is no restriction on the price asked of new tenants when a unit turns over.

It’s a rule tenant advocates have long said increases instability for tenants, who fear it gives their landlords an incentive to push them out if they’re paying lower rents. Some officials, however, argue it’s necessary to encourage investment in the rental housing sphere.

In a report going to council at its next meeting on Tuesday, housing secretariat executive director Abi Bond says the city should ask the province to tie rent control rules to residential units, rather than the tenants who inhabit them.

“The primary objectives of these activities are to preserve the city’s affordable and mid-range rental housing supply and help support tenants who are at risk of being evicted,” Bond wrote.

It is the first time housing staff have formally backed the rule being changed, confirmed city spokesperson Siobhan Ramsay. Speaking to the Star, Bond noted divided opinions on the idea.

“Vacancy decontrol often comes up in conversations when you’re talking about the rental housing market, because it’s seen by some as a way to create stability for renters, and it’s seen by others as a way to limit investment by landlords,” she said. “It’s a tricky issue.”

But she feels it’s necessary now to act, as Toronto’s rental market has become volatile and marked by “financialization” — referring to homes being treated as vehicles for amassing wealth rather than as a social need.

Bond’s report suggests a number of policy moves that could be made locally — such as a bylaw to change renovation permit rules and require landlords provide tenants with eviction prevention handbooks — as well as requests to other levels of government, such as having an after-hours emergency line set up within the province’s Rental Housing Enforcement Unit.

The proposals are all broadly aimed at curbing “renovictions.” In Ontario, landlords are allowed to evict their tenants if vacant possession is required for renovations or repairs, with the tenants allowed to return after the renovations at a similar rent. A “renoviction,” however, refers to cases in which that system is abused by a landlord to elicit turnover and bring in higher-paying tenants, or for other improper motives.

In recent years, there has been a substantial surge in overall applications to Ontario’s Landlord and Tenant Board to evict a renter for renovations or repairs — not including any cases where tenants are asked to leave but a formal application is never filed.

“A significant numbers of evictions occur informally, without documentation, and can often be illegitimate,” Bond wrote.

Along with enacting vacancy controls, Bond wants to see the province create a “centralized data system” that can collect information on all rental units across Ontario.

Ideally, she says that system would allow any member of the public to search for the particulars of a rental unit — specifically, information on ownership. If a property is held in trust for another entity, she’s suggested the database include details about “beneficial ownership,” or details on the person or persons who ultimately control the property.

Bond frames that as a step toward more transparency and understanding of market dynamics.

“Who are the movers and shakers, if you like, of our rental housing system?”

The province seems unlikely to end vacancy decontrol right now, as the governing Progressive Conservatives have suggested imposing rent maximums during tenant turnover could jeopardize the development of needed purpose-built rental homes. Some academics and landlord federations have expressed a similar concern, arguing vacancy controls would limit the potential revenue of a rental building and make the model less attractive.

Asked about vacancy controls in light of the city report, the province’s Housing Ministry seemed to reiterate that argument, saying Ontario hit a record level of rental home construction last year — and added that rent controls would be maintained for “existing tenants.”

Without the prospect of attracting higher-paying tenants, some critics of vacancy control have also suggested landlords could have less incentive to maintain or upgrade their properties.

Bond said her team is restricted by a lack of data about the rental sphere, and couldn’t say exactly what the impact of a change such as vacancy control might be.

“If we had better access to information, we might be able to strike that balance, or propose measures that strike that balance, better. It’s kind of remarkable that we’re really dealing with so much anecdotal information,” she said.

While creating new supply is crucial, Bond said, there’s a parallel need to protect the affordable housing that already exists — lest the city be “no further ahead” in its goals. That means taking a holistic look at what’s driving costs upwards, she said.

“We just feel like the kind of price rises, and the pressure that we’ve seen on rent affordability in the city at a time of economic difficulty, warrants some response.”

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