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Report urges Ontario to reverse policies to ease rental-housing crisis

Canadian Press, Sunday, June 10, 2002

Ontario government policies have created an acute shortage of affordable rental housing while helping savvy investors reap huge profits, a report being released Tuesday concludes. The report for the left-leaning Canadian Centre for Policy Alternatives finds that tenants are bearing the brunt of the crisis.

"(The government has) been telling us now for seven years ... that the solution is just around the corner," said activist Michael Shapcott, who authored the study.

"(Instead investors) take advantage of an exceptionally tight supply with no new affordable housing on the horizon and the fact that rent laws have been relaxed."

The report urges the province to get back into the housing business by spending $700 million to produce 15,000 affordable units a year. Roughly 40 per cent of all Ontarians are renters, while the vacancy rate across the province is a scant 1.7 per cent.

Based on federal and provincial housing data, the report concludes that 18,000 new units a year will be needed to cope with projected population growth over the next two decades.

Nevertheless, new construction of rental housing has been less than 2,000 units annually for the province in recent years, compared with 15,000 units between 1988 and 1992, data show.

At the same time, demolition of existing units and the conversion of others into sale properties has undermined any gains. As a result, rents have increased at double the inflation rate and homeless shelters are swamped.

"Property developers ... are buying up rental buildings with moderate rents, then using weakened tenant protection laws to drive up the rents and bank the profits, a big chunk of them tax-free," the report states.

The report blames several Tory government policies for the situation.

Those policies include former premier Mike Harris's decision in 1995 to scrap plans for 17,000 co-op and non-profit units and then to stop funding any new social housing.

The province also cut rent subsidies for low-income households, although some of that was recently reversed.

However, welfare rates, cut in 1995, and the minimum wage have been frozen for the past seven years.

But the most dramatic impact was created by the 1998 Tenant Protection Act, which allows landlords to raise prices as much as they want if a unit is vacant, creating an incentive to force tenants out.

"An average of 250 Ontario households face eviction every working day of the year," the report says.

Based on federal figures, tenants have paid an additional $850 million more in rents since 1998 but have little to show for it.

"Without that new housing, the rental market will continue to remain in crisis, a situation that property speculators and landlords know is good for their bottom line," the reports says.

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