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Tenants push for rent law change

If gas prices fall, rents must too, group says

Toronto Star - November 12, 2001
By Kerry Gillespie and Paul Moloney

A Toronto tenant group is lobbying for amendments to provincial legislation that could mean millions in reduced rents for Ontario tenants.

Permanent rent increases above the guideline, to pay for last winter's soaring natural gas prices, are the most indefensible aspect of the Tenant Protection Act, says Paul York of the Greater Toronto Tenants' Association.

The landlord pays the heating bills once. The tenants, under the Tenant Protection Act, pay forever, York said.

"If the rents can increase when the operating costs go up, they should decrease when the operating costs go down.'' Everyone agrees with that principal, so why isn't it legislated?"

It used to be. Before the 1998 Tenant Protection Act, a landlord could get a rent increase to pay for high utility bills, but when the bills went down, the rent had to as well. The "costs no longer borne" provision was part of the repealed Rent Control Act.

York wants the old days back. He is lobbying the provincial government to amend the Tenant Protection Act to reintroduce the provision.

Housing Minister Chris Hodgson is looking at the issue as part of a review of the provincial formula used to calculate the yearly rent increase guideline, a spokesperson said yesterday.

A landlord is allowed to raise the rent of a sitting tenant by a set amount - 2.9 per cent for 2001 and 3.9 per cent for 2002. But applications affecting some 73,000 Toronto households, for rent increases above those amounts, have been made to the Ontario Rental Housing Tribunal. Applications affecting another 29,000 Ontario households are also before the tribunal. Many other tenants and landlords try to negotiate an increase, saving the time, money and uncertainty of fighting it out at the tribunal.

Tenants at 4500 Jane St. at Finch Ave. W. just negotiated an above-guideline increase with their landlord.

He wanted 4 per cent, which Ursula Valley, a tenant in the building for 14 years, called "ridiculous."

They agreed on 2.8 per cent. That will be added on top of the 3.9 per cent guideline increase next year, making for a total rent increase of 6.7 per cent.

Valley, a senior on a monthly pension of $900, said she already pays $754 a month in rent. These increases mean that next year she will pay $804, a $50 increase.

"The rent is going up, everything is going up, but your income stays the same. After you pay rent, there's nothing left," Valley said on Saturday afternoon at a Jane-Finch tenant rally.

"What about your other bills?" she asked.

More than half of Toronto's population rents, and affordable housing is getting harder and harder to come by because of vacancy decontrol (which allows a landlord to raise the rent as much as he wants when a tenant moves out) and rent increases.

Some 100,000 people move to Toronto every year, yet the rental stock hasn't grown in decades.

Only 6 apartments out of every 1,000 are available and there are even fewer at the low end of the market. Since 1998, landlords have been able to raise rents on vacant apartments to whatever people will pay.

York would like to see the costs no longer borne provision reintroduced so that if an above-guideline increase were granted, rents would be automatically rolled back according to the decrease in operating costs, at the end of the 12-month period following the increase. If the costs don't go down, the rent doesn't go down.

Vince Brescia, president of the Fair Rental Policy Organization, which represents landlords and owners, said that this system would lead down the "slippery slope of regulation" and be an administrative nightmare.

All utilities are lumped together in rent formulas so if heating costs go down next year, but water costs go up, how do you decide whether to take away an increase or leave it, Brescia said.

Landlords need many of the requested above-guideline increases, many of which would be around 3 per cent, Brescia said.

The guideline increase of 3.9 per cent for next year, he said, is simply not enough to offset the high natural gas prices.

"We haven't experienced a one-time increase."

Though gas prices have come down from last winter's high, they are still substantially above what they've been in recent years, he said.

A 3.9 per cent guideline means that an apartment that rents for $1,000 this year will rent for $1,039 next year, even if the current tenant stays.

Jim Miller, spokesperson for Hodgson, said the government wants landlords, just like any other business, to be able to get back what they put into their businesses while at the same time being fair to tenants.

"We think it's appropriate that they recoup their operating costs," Miller said yesterday. "Yet those costs have dropped and the rental increase stays on," he added.

Is that fair? "That's something we're looking into."

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