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Rent Controls

City wants them, province doesn't and tenants' complaints are rising

Toronto Star - April 26, 1975
By Margaret Daly

Margaret Bedard is in her 50's and all her life she worked hard, as a hairdresser and later a teacher of hairdressing. Three years ago she suffered a heart attack.

That was a squeeze on the family finances, having to give up her $80-a-week salary, but between her small government disability pension and her husband's $157 a week in take-home pay as a factory worker, plus the old-age pension of Mrs. Bedard's mother, who lives with them, they were managing.

Until last March 1, that is -- when they were hit with a rent increase of $48 a month on their modest two-bedroom apartment in Scarborough.

Now Mrs. Bedard is one of the growing number of Metro tenants who are calling for government controls on the cost of rental housing.

This week the annual report of Paul Jones, head of Metro's landlord and tenant advisory bureau, said complaints about rent increases almost doubled in 1974.

Last weekend a conference of aldermen from Toronto and the boroughs, held in Scarborough's civic centre, proposed a Metro rent review board.

A bill, passed last month by City Council, proposes a five-member tribunal, appointed by council, to review rents. Existing rents would be rolled back to June 1, 1974, levels, and increases held to 5 per cent a year. If a greater increase were sought by a landlord and disputed by a tenant, the tribunal would hear evidence and determine whether it was justified.

The city cannot act on its proposal unless the province amends the City of Toronto Act. Several council members are doubtful that Queen's Park will grant the city's request, for the provincial government has repeatedly opposed rent controls.

The bill will be considerd by a committee of the Legislature May 14.

`Woolly thinking'

Joining the province in opposition to rent controls is the Urban Development Institute, which speaks for virutally all of Metro's large apartment developers.

"Typical of the wooly thinking of the present City Council," UDI president Roy Wykes says of the city proposal, "It wants more housing in the centre of the city and yet approves a law which will drive out the private developer."

The proposal is certainly popular with tenants like Mrs. Bedard.

"I can't see how they can justify this," she says, "a jump from $169 to $217 a month, all in one shot. And the janitor advised us to take a two-year lease, because he figured it would be going up to $300 next year."

Mrs. Bedard knows $17 is less than many people have to pay. But her apartment is in a 14-year-old building "which Meridian must long since have paid for my now," an austere six-storey structure with no recreation rooms, only one elevator, no cable TV and no ground, just a front entrance right onto the fumes of the heavy stop-and-start traffic of Eglinton Ave. between Birchmount and Kennedy Rds. She has no complaints about the maintenance of the building, but can't believe the costs of its upkeep can have skyrocketed sufficiently to warrant her 28 per cent rent increase.

"Where I live, in Scarborough, they (the council) are doing nothing at all about it," she says angrily. "It rests with the provincial government, they tell me, so I've called them all, from Premier Davis on down.

Up to Irvine

"Of course I got nowhere. (NDP Leader Stephen) Lewis was the best of the bunch, but there's nothing he can do; it's up to (Housing Minister Donald) Irvine, and I got nowhere at all with his office."

Irvine's position, stated frequently in public speeches and in response to calls for rent controls, is that they don't work.

He argues that the real solution to the problem of too-high rents is for the provincial government to provide financial incentives to developers, to encourage them to build more rental housing for low- and middle-income people.

But critics such as the Metro Tenant Assocations respond that, by the minister's own admission, the province's programs to increase rental housing won't have any substantial effect on the Metro market for at lease three or four years.

It says Toronto tenants need temporary protection while longer-term programs are being implemented.

Central Mortgage and Housing Corp. estimates the average of all rental increases in the Metro area at 12 per cent 1974 and even more than that this year. Average increases for 1971, 1972 and 1973 were between 5 and 6 per cent.

The city's rent controls proposal was drafted chiefly by Alderman Dorothy Thomas and presented to City Council by the so-called Reform Caucus, six members who represent largely lower-income and working-class areas of the city.

But the growing public demand for rent controsl is by no means confined to these areas.

Alderman Anne Johnston, who represents wealthy north-end Ward 11, says: "Rising rents are the most common complaint I hear these days, whereever I go."

Executive Alderman William Kilbourn has had the same experience.

"People think of my Ward 10 as beign all Rosedale and Moore Park, but it has the highest number of tenants in concentrations of any part of the city," he says. (The Erskine-Mt. Pleasant and Yonge-Davisville areas are two vast highrise neighborhoods.)

"Tenants' rights and rent controls have become in the past year by far the biggest grass-roots concern in the city -- and if Queen's Park does not kow it, they're even more out of thouch than ever."

Kilbourn's observations are paralleled by Linda Chartrand fo the Parkdale Tenants' Association, whose complaint calls used to be about disrepair in the 10- to 15-year-old six and seven-storey buildings that characterize the area, but now are about $40 and $50 rent increases, often the second inside of a year.

$45 increase

Typical is the case of Frank Frost, whose small one-bedroom apartment is an older Jameson Ave. building has just been raised from $155 to $200.

The round of increases throughout the building, where the tenants have no leases, varied from apartment to apartment, followed a round of smaller rent hikes last November, and came with the warning of further increases this July for some tenants.

Frost has confronted his landlord angrily, and sent a letter to Housing Minister Irvine calling for rent controls, but most of this fellow tenants, he says, are afraid even to do that much.

"Its' all right for me; "i'll move if I have to," says Frost, a sheetmetal worker currently on Workmens' Compensation. "But a lot of the tenants in this building have nothing except their old-age pensions, and they're scared to speak up because they couldn't afford the cost of moving. I don't know what they're supposed to do."

"Tighten up our belts and do without eating," is the tart response of one widow, whose rent for a one-bedroom apartment in a Cadillac highrise complex near a subway station is due to go from $206 to $239 on June 1.

"I have no truck with radicals, but people like me owe a lot to these reformers on City Council; they're the only ones really pushing hard for rent controls. The politicians at Queen's Park are just hand in hand with developers."

Wykes of the Urban Development Institute says the city's bill would mean builders just won't build any more apartments and the housing supply will "dry up." The ensuing shortage, says the UDI, is likely to lead to a black market in rental housing as it has in other countries where rent controls have persisted.

"Those who have lived in cities with rent controls know that it soon becomes accepted practice to have to pay some sort of bribe -- often called `key money' -- in order to acquire decent rental accommodation," says UDI spokesman Robert L. Strom.

Other developers add the argument that rent controls mean landlords are unable to maintain buildings, and the quality of existing rental housing declines rapidly. They claim that, in New York, where rents are controlled on buildings constructed before 1948, 60,000 apartments a year are abandonded by landlords unable to pay for their upkeep.

Alderman Dorothy Thomas, sponsor of the city's rent controls bill, responds: "We don't have rent controls now, and the situation does not appear to have encouraged apartment developers to satisfy the demand for low-income family rental housing. Nor is there any evidence the freedom of landlords to raise rents as much as they want has led to particularly high standards of building maintenance.

Planned shortage

"The classic economic expectation that high rent returns encourage producers to increase the rental housing supply until the demand is satisfied and shortages are eliminated simply does not hold true. Developers deliberatly maintain the shortages in order to keep rents spiralling upward."

North York Mayor Mel Lastman, a longtime advocate of rent controls, puts the point more strongly: "I'm a businessman and I believe in free enterprise. However, I do advocate government intervention when monopolies and cartels control an industry. Only a handful of developers control the apartment `market prices' in Metro.

The advocates of rent controls admit the system has its risks and imperfections, and has worked badly in some cities. In B.C., where rent controls have been in effect for a year, apartments are being left vacant although a severe housing shortage exists, repairs are not being done, and landlords are insisting their costs are rising higher than they are allowed to raise rents.

In Quebec, on the other hand, rent controls have been provincially administered since 1951. An appeals tribuanl operates as part of the justice system. Rents in Montreal are kept far lower than in Toronto as a result, and there have been no serious complaints from developers or landlords.

Dorothy Thomas suggests that the problems in B.C. stem partly from the fact that the system put ceilings on rent increases (first of 8 per cent, then 10.6 per cent per year), whereas the Toronto bill "would provide genuine `controls,' not absolute ceilings." If a landlord required greater increases, he could make his case before the proposed tribunal.

"Presumably the appeal of the B.C. system is that it's easier to administer," she says. "Our system would require a well-functioning, skilful and well-paid bureaucracy, which would obviously be a more costly proposition. But the long-term effects should merit our approach."

Supply problem

The threat of a "key money" situation developing, Thomas admits, is a real one -- if rental housing shortages are allowed to continue. In New York, programs to stimulate new construction have not been effective,and the fact that ony old buildings are controlled while rents are permitted to rise in new ones has encouraged the abandonment and deliberate running-down of old properties.

She says that all rents should be controlled, and a supply of new rental housing ensured "either by building it ourselves, as the city is doing now, or by other programs of financial incentives to developers, like those CMHC is trying out.

Those who favor some form of rent controls stress that point -- that they must operate in tandem with programs to encourage the provision of rental housing.

"Queen's Park itself really admits this, in admitting that a variety of programs to stimulate construction of low-income and middle-income family housing is needed even with the so-called free market that exists," Thomas says. "They'd be no less effective with rent controls than without them. Rent controls are no final answer, but they do represent a direct attack on a crisis situation which is what we have now."

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