Rent Control: the Detrimental Effects A Change Would Bring
In a just society, the ruling authority must decide what is
right when allocating wealth to its individual citizens.
The same ruling authority does this by intervening with the
inner workings of a marketplace to uphold its fundamental
values and ideals. The aim of government intervention is to
create a just society that will reflect the people's
values. Governing bodies do this by establishing laws that
enforce fairness or 'equity'. The Ontario government passed
the Rent Control Act in 1975. The law levels the playing
field between landlords and tenants. New units are exempt
from controls for their first five years after which the
controls are put into place. The controls put a ceiling on
annual rent increases. Under current law, a landlord may
only increase a tenants' rent by 2% plus inflation.1 As
with all other markets, the housing market is based on
supply and demand. If the nature of the market were allowed
to take its course, then the price of housing would become
unaffordable for most citizens. An unfair situation would
be created where power and money would be
disproportionately appropriated to land owners. Rent
control laws were established by previous governments to
protect society and its people from inflated and
uncontrollable housing costs. The Harris government now
wants to repeal these laws. On June 25 the Minister of
Housing, Al Leach, released a policy paper outlining the
changes that are to be made to Ontario's rent laws.
Conservative legislators plan to pass the proposed 'Tenant
Protection Act' in the fall. The omnibus legislation will
rescind the Rent Control Act, the Landlord and Tenant Act,
the Rental Housing Protection Act, Residents' Rights Act,
the Land Lease Statute Amendment Act, the Vital Services
Act.2 The most objectionable change allows the act to lift
controls off vacant units. The 3.2 million renters in
Ontario are very concerned about the changes.3 The housing
ministry will accept written submissions from the public
until August 30. Public hearings are also planned in hope
that they will ease the transition. However, most people
are indignant towards the idea. Changing the rent control
laws would be detrimental to society as they threaten
citizens' positive right to affordable housing, harm their
mobility rights and increase the gap between the rich and
the poor. The proposed 'Tenant Protection Act' assaults
peoples' right to affordable housing. If people are to
adhere to a basic standard of living, then the cost of
their homes must be affordable. But what exactly is
affordable? The Ministry of Housing released a report
stating that 70,000 Toronto house holds (20% of the city's
population) do not have affordable housing. The report
explains that a tenants' housing is unaffordable if they
are paying more than a quarter of their gross income in
rent. This is an alarming thought since some renters are
paying 70-80% of their gross income in rent.4 The problem
of high housing costs is combated by rent control to allow
people a minimum quality of life. Housing like medical care
is not normal good or service. It is a basic need. Renters
need to buy more than landlords need to sell. If the renter
does not get a place to live, he is on the street. If the
landlord has no tenant, he just has an empty apartment. In
short, there is a mismatch of power in the rental market.
The laws of supply and demand are unfairly applied against
the buyer. Thus controls came into being precisely because
the market does not work. Lifting controls would hurt
people's ability to bear the cost of housing without
serious harm. The government justifies this action by
arguing that something must be done about Toronto's
apartment shortage. Because apartments are offered below
their market value, they are sold faster new ones can be
created. Toronto has a vacancy rate of .8% with only twenty
new apartment units built in Metro last year.5
Currently, two thirds of renters move once in five years.
Since controls are lifted off vacant apartments, the
government believes that after a few years, most apartments
will be decontrolled and the supply problem would be
solved. In truth, areas that are already decontrolled are
not seeing new apartments. Instead of building moderately
priced, modest apartments, developers find it far more
profitable to build condominiums. Clearly, condos do not
fall under the category of affordable housing. Yet, the
province is making it easier to convert apartments into
these extravagant units. Under the proposal, if there is a
conversion, the warning time a tenant must receive would be
cut from 240 days to 120. Even if developers wanted to
build new apartments, the government's rationale is still
flawed. When the controls are lifted off vacants, tenants
will not be able to afford to move. Moving means and end to
rent control. In other words, the mobility assumption that
they make is wrong. With the price of vacants skyrocketing,
and a notice that a tenant's apartment is being turned into
a condo, where is a not-so-well-off tenant to go? Luckily,
previous governments have established non-profit housing.
Also called co-op housing, the Ontario Housing Corporation
manages 1200 of these publicly funded housing projects
across Ontario. On these sites 84,000 units were sold to
the low end of the housing market. They are provided to
ensure affordable housing. Someone who cannot afford a
condominium can easily take up residence in a moderately
priced co-op apartment. This would solve any claims to
affordable housing rights that people would be scared of
losing under the proposal. Unfortunately, soon after taking
office, the Conservatives decided that they would no longer
support the building of non-profit housing, and withdrew
funding for 70% of planned non-profit projects. The total
reduction in funding to the O.H.C. was $82 million. This
was done in light of a waiting list of 40,000 people.
Funding needs to be increased, not reduced. 1228 units need
to be built each year just to keep up with the exigency.6
How are positive rights to affordable housing supposed to
be upheld after such a drastic cut? The government explains
that they expect the private sector to support the low end
of the housing market through the continuance of the
Shelter Allowance Program. This encourages landlords to
build and maintain affordable housing. In 1994 the
government funding for the program reached its peak at $2.4
billion. This favoritism of landlords was fiercely
protested by the Coalition to Save Tenants' Rights. Why was
the responsibility of affordable housing cut from
non-profit community volunteers, and not landlords? The
C.S.T.R. had this to say: "To develop housing for the lower
end of the housing market if rent controls are lifted, the
landlord lobby, FRPO, presents a list of demands: lower
property taxes on rental properties, no GST on new
building, no development charges for sewers, roads and
parks. Home owners will pick up the slack for property tax
and development charge shortfalls and everyone for the GST.
These too, are a form of government subsidies. Yet, FRPO
persuaded Mike Harris that the government shouldn't be in
the housing business because the subsidies are too high.
Ah, we get it! Subsidies are okay if they're being shoveled
into the pockets of private landlords. But they are a bad
thing if they're going to non-profit community groups that
build affordable housing. Money spent on co-ops is used far
more efficiently than the shelter allowances wasted on
landlords."9 In addition to subsidies, landlords say they
will not build affordable housing unless taxes are lifted
from the building process. The end result is that the
proposed 'Tenants Protection Act' would cause no new
affordable housing to be built. Only higher rents, which
will result in more evictions. An altogether vicious
circle. As more and more sources of affordable housing are
disappearing, basement apartments may become the only ones
left. It is not known for certain, but estimates number the
amount of basement apartments in metro to be in six
figures. Many people rely on basement apartments for a home
simply because of the affordability of the unit. To their
comfort Bill 120 was passed as the Residence Rights Act in
1994, legalizing basement apartments. Bill 120 also
afforded protections to tenants by strengthening eviction
laws in their favor. To their dismay, Bill 20 was passed as
the Land-use Planning and Protection Act on November 20,
1995. Bill 20 gives municipalities the choice of weather or
not to allow the building of any new basement apartments.
Bill 20 which was passed by the Conservatives, is only a
foreshadowing of what is to come. The proposed 'Tenant
Protect Act' declares all basement apartments illegal
again. The gains made for peoples' positive right to
affordable housing would be lost. Declaring a potential
supply of small apartments illegal would worsen an already
bad shortage. This shortage of apartments will not be
solved by lifting rent controls. This would only result in
the further development of lucrative condominiums. With a
reduction to public housing and the of barring of basement
apartments, affordable housing in Ontario is falling left,
right and center. The shortage is now worse. Affordable
housing is not only vital, but is a persons' right to be
able afford himself shelter. All of society is hurt when
its citizens can not allow for basic living expenses. By
ending affordable housing, the repeals to Ontario's rent
laws would harm its populace by infringing on their
mobility rights. The changes would compromise tenants'
mobility by sentencing them to their apartments. With
controls lifted off vacants, tenants will not be able to
afford to move. Conversely, landlords who wish their unit
to be decontrolled will have to force tenants out. This
will create "class war" of landlord-tenant relations.
Because landlords have the upper hand in the housing
market, tenant rights would be jeopardized. This mismatch
of power would result in landlords harassing tenants,
withholding repairs, and eventually, evictions. Landlords
have had a history of strong-arming tenants to get their
wishes. With no rent control on vacants, they will declare
an open season on tenants. Tenants would have little
recourse but to take their complaints directly to the
Ministry of Housing, and file a lawsuit to be settled in
the courts. If the proposed 'Tenant Protection Act' falls
through, the sheer volume of harassment complaints are
expected to be so numerous, that the lawsuits would put an
unbearable strain on the legal system. In the anticipation
of the overload, the Ministry of Housing has established a
complaint line. The 24 hour message system will be brought
up to screen less important tenant problems and to declog
the Tenant Complaint Office.7 Leach also plans to create a
quasi-judicial tribunal. Complaints would be diverted from
courts to the tribunal for everything from increases to
evictions. Both parties would be given a short time to
present evidence and make their case. Shortly after, a
judgment would be made. Since there are no appeals, both
parties would be expected to abide by the decision. If one
party complains that the other has breached the ruling, the
tribunal would send out their 'anti-harassment unit' to
investigate and slap fines. Drive-thru justice? One-stop
shopping? This 'Band-Aid' solution to the problem of tenant
harassment will in no way protect tenants. Striping their
legal right to have a say in a real court is only done to
keep tenants out of the Minister's hair. When asked about
the anticipated problem of tenant complaints Al Leach was
quoted as saying: "We intend to keep them out of the courts
as much as we can."8 Tenants' cases would be rushed through
to keep the line moving. Although efficient, this does not
do justice to tenants concerns. Even if tenants were to
receive a fair decision that would ask the landlord to stop
the harassment, it is not enforceable. The small,
underfunded 'anti-harassment unit' would not be able to
deter the amount of harassment anticipated. Their threat to
enforce the rule of law is an empty one. A joke. The
government told the C.S.T.R. that it will protect tenants
by doubling the fines for harassment. Fines could be
quadrupled and it still would not matter because they are
flawed in their application. C.S.T.R. states: "Given that
the Tories are slashing workplace health and safety
inspections, food inspectors and virtually every other kind
of enforcement of public interest laws you can think of,
what makes you believe their promise to enforce
'anti-harassment by landlords'?" 10 Anti-harassment laws
under the proposed 'Tenant Protection Act' are
unenforceable and ineffective due to budget constraints.
Harassment protection afforded to tenants would become nil
and an open season would be declared on them. The first
thing that landlords would do to pressure tenants to move
would be to deprive them of repairs. This sort of behavior
is frowned upon by the government. Under the proposed
changes, they shall show their displeasure by doubling the
repair fines. Nonetheless this change, like the harassment
fines, is an empty threat. Sixty percent of Ontario
apartments are greater than 25 years old.11 They either
need extensive repairs or they are so deteriorated, that
they are ready to be replaced by condominiums. This fact
plays into the landlords' pressure strategy nicely. If a
tenant does not want to move, he has to stand and watch as
his home degrades all around him. When the old furnace
breaks down, he will freeze. When the sink stops working,
he will have no water. It would only be a matter of time
before the tenant realizes that his struggle is useless. He
will have to move. Landlords have gone as far as charging
tenants an extra fee of $180 per month for having
"unauthorized appliances" such as washers, dryers, and air
conditioners.12 If the landlord does not want to see his
unit degrade for the sake of higher rent, there are other
options available to him. He can scare the tenant out of
his home. Landlords infamous for using strongmen for this
purpose. Washed out boxers or thugs looking to make a quick
buck are a landlord's best friend. Tenants are told to
move, or else. If they do not get the message the first
time, then the strongmen would reinforce their point. What
is worse than no repairs, or the threats of an enforcer?
Eviction. If a tenant does not leave because of the
slumlike conditions or intimidation, he will be flat out
thrown out. Landlords do not like to resorting to this,
because of its expense and the time needed for the legal
process. Evictions can take up to four months. But if the
changes are passed, eviction may prove to be a landlord's
pastime. The Residence Rights Act was passed by the N.D.P.
government in 1994. This made tenants far more difficult to
evict. Under the proposal, eviction laws under the
Residence Rights Act would be repealed. Landlords would be
given much more discretion in evictions. The time it takes
to evict would be shortened and there would be no appeal
process. Changing rent control laws would not only harm
peoples' mobility rights in that they will not be able to
afford to move, but insult would be added to injury in that
landlords would not let them stay. Where would they go?
They would end up on the streets. Repealing rent control
would make the rich richer, and the poor, poorer. If
controls are lifted, the inherent mismatch of power in the
housing market would cause a shift in the wealth between
landlords and tenants. Owners and developers would become
richer from the higher rent their land yields, while those
who can not foot the increases would be deprived of a home.
The forces in the market would cause tenants to be caught
up in an 'affordability gap'. This is because the cost of
building housing has increased at a higher rate than
average tenant incomes for the last ten years.13 The poor
would be especially hit hard. From 1982-1994, monthly
incomes of tenants living in projects actually fell, from
$717 to $661. Eliminating rent control is supposed to raise
vacancy rates. However, vacancy rates do not deal with
affordability. Since 85% of renters fall on the bottom
third of income earners, empty apartments would come from
those who could no longer afford them.14 If the 'Tenant
Protection Act' is to pass, rent supplements should be
worked into the proposal. Supplements would help tenants
fill in the affordability gap created by lifting controls.
This is not the case under the proposal. Lifting controls
would seriously harm many people. Toronto's city planning
and development department blames the affordability gap for
the increased usage of food banks. They say that if
controls are lifted, people will not have enough money for
food. This will result in unmanageable lines at the food
bank.15 Alternative housing is another housing program that
is going to come under attack by the changes. Also called
special-care housing, this program is the only thing
keeping 47,000 people across Ontario off the streets.16
Alternative housing puts up single mothers, seniors, the
disabled and people who would be otherwise homeless without
it. The Residence Rights Act protects special-care tenants
from eviction. The proposal would repeal the R.R.A. to give
landlords of care homes the power to enter homes without
notice to perform bed checks. They would also be able to
flash evict abusive tenants who fail to pay rent or damage
property. This worries many because these are the people
who are at most risk for homelessness. Special-care tenants
are not the only ones in danger. Because of this decades'
poor economy, the number of metro residents that were
evicted doubled from 1990-1995.17 The combined effect of
lifting controls and more powerful eviction laws can only
worsen the situation. Those who are forced out of their
homes to get their controls lifted and cannot afford a
decontrolled unit, will slip through the cracks and onto
the streets. There would be more evictees with a greater
proportion of these people becoming Ontario's homeless.
Such was the case for Irwin Anderson. Irwin Anderson was
one of three street people who froze to death last winter.
The inquest involved linked the deaths to a lack of
affordable housing in Toronto. In particular, Anderson had
been evicted for non-payment of two months rent. But he had
previously paid rent in his apartment in the subsidized
complex for five years. An arrangement for repayment could
have been worked out. Instead, he was evicted. The
frightening truth is that this could happen to anyone, even
the well educated. Mirsalah-Aldin Kompani, another of the
three who froze last winter had an engineering degree from
the University of Kentucky. At this point, tenants would
not be shouting about their right to affordable housing,
they would be fighting for their basic right to a home.
Their only refuge from the cold would be confinement to a
crowded hostel. These may be no better than the streets
themselves. The Toronto Coalition Against Homelessness
states that people loathe these places and that affordable
housing should be the central focus since hostels only
offer a superficial solution to the real problem.18
Consequently, because of the affordability gap, cuts to
alternative/public housing and flash evictions, repealing
rent laws would split Ontario's middle class into two,
putting half up in condominiums, while incarcerating the
others in hostels. Since the strength of society depends on
its middle class and its ability to keep people off the
streets, the proposal should be rejected.
For these reasons, the proposed 'Tenant Protection Act'
damages society as it attacks Ontarians' appanage to
affordable housing, restricts their movability and erodes
the middle class. The change would take away positive
intervention and let the nature of the markets decide a
redistribution of wealth. Many would live on the land owned
by an elite few. This is not equitable so government
intervention in the markets must remain. When the majority
of peoples' happiness and values are protected against the
advantageous elite, then that is a sign that a society is
1 Ministry of Housing, The 1996 Rent Control Guideline, p.1.
2 Toronto Star, Critics fear pending bill will 'strip
tenant rights', June 26, 1996,
4 Toronto Star, High rents leaving no money for food, March
31, 1996, p.A6.
5 Toronto Star, Province plans to protect tenants, June 25,
6 Toronto Star, Ontario prepares to scrap rents controls,
September 9, 1995, p.A3.
7 Toronto Star, Tenants get special line to snitch on a
landlord, June 24, 1996, p.A7.
8 Toronto Star, Rent controls not scrapped, Leach says,
June 7, 1996, p.A10.
9 The Tenant Bulletin, C.S.T.R. fights rent control reform,
July 26, 1996, p.1.
11 Toronto Star, Province plans to protect tenants, June
25, 1996, p.A1.
12 Toronto Star, Tenants get special line to snitch on a
landlord, June 24, 1996, p.A7.
13 D. Edwin and R.Vogt, Basic Economics, p.56.
14 Toronto Star, High rents leaving no money for food,
March 31, 1996, p.A6.
16 Toronto Star, New tenant law could hurt most vulnerable,
May 28, 1994, p.L6.
17 Toronto Star, Anguish of Eviction Day, July 7,1996, p.A1.
18 Toronto Sun, Aid homeless, Harris told, June 25, 1996,
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