Tenants in new rental building face massive rent hikes

As activists call for a rent freeze, tenants in an apartment near Lawrence and Weston say they are receiving increase notices ranging from six to 25 per cent


Housing activists, city councillors and Ontario MPPs are calling on Doug Ford’s conservative government to impose a province-wide rent freeze in response to the housing crisis.

On March 12, the anti-poverty group ACORN Toronto held a rally in front of the Ministry of Municipal Affairs and Housing office at College  and Bay to demand the rent freeze.

Local city councillors Kristyn Wong-Tam and Mike Layton and MPPs Suze Morrison, Chris Glover, Faisal Hassan, Jill Andrew – as well as Ottawa MPP Joel Harden – joined ACORN members from Toronto, Ottawa and Hamilton.

The freeze would, in effect, reinstate rent control, which the Ford government scrapped on new rental buildings on November 15, 2018. Previously, landlords could only increase rents for tenants up to the provincially mandated guideline – for 2020, that’s 2.2 per cent – or would have to make an appeal to the Landlord and Tenant Board.

“Rents in Toronto increased 12 per cent in the last 12 months in Hamilton they went up 22 per cent. The number of above-guideline increases are up by 28 per cent, and the Landlord and Tenant Board is rubber stamping approvals,” says ACORN Toronto’s Alejandra Ruiz Vargas. “Tenants in Ontario are in a crisis and Steve Clark, the housing minister, is making it worse.”

Without rent protection, a growing number of tenants living in new buildings are now facing massive rent hikes.  

Ilana Newman and her partner Pablo Hernandez are two of those tenants.

They moved into a one-bedroom unit at a new rental building at 22 John near Lawrence and Weston on February 1, 2019. Around eight months later, they received a notice that their rent would be increasing. They knew they wouldn’t be protected since they signed just a few days after November 15, but figured the rent increase would be in the range of the provincial guideline – since the building just opened and wouldn’t need repairs (a common reason landlords use to justify above-guideline increases).

“We anticipated a rent increase notice somewhere in the neighbourhood of three to five per cent, but I didn’t think it would be astronomical,” says Newman.

In November, they were told their rent would increase by 14.4 per cent, or six per cent if they signed a new 12-month lease.

Other tenants in the 377-unit apartment building also received rent increase notices ranging from six to 25 per cent. After pushback from residents, who formed their own tenants association, the property management company removed the “two tier” lease system that charged more for month-to-month leases. (Under the Residential Tenancies Act, tenants automatically move to a monthly system after their initial lease expires.)

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Samuel Engelking

When Chris Amaddeo (left) and Nicholas Leduc moved into 22 John, they didn’t know the building would be exempt from rent control protections.

When Chris Amaddeo and his partner Nicholas Leduc moved into their one-bedroom-plus-den unit also at 22 John in May 2019, they didn’t know the building wouldn’t be covered by the province’s rent control until they attended a tenants association meeting in November.

Their current rent is $1,670 and will increase to $1,770 this May 1, a six-per-cent increase, nearly triple the provincial guideline.

“We’re really upset. Not only with the transparency of the situation, but also with the building. When we moved in, the building was still under construction until July, the amenities floor with the gym wasn’t available until the beginning of August and the elevators are often not working,” says Amaddeo.

When Amaddeo emailed property management asking for a rent decrease or discount due to the amenity floor not being open, he was told the rent was already low by Toronto standards.

In January, members of the tenant association met with their property management company, Rhapsody Property Management Services, with a list of demands, including an explanation for the rent increases and the discrepancies of those increases. According to Newman, they declined to answer any of their questions.

On February 1 2020, Newman and Hernandez’s rent increased from $1,725 to $1,830, a six per cent increase.

In an interview with NOW, senior vice president of Rhapsody Rob Martin says the rent increases are market-driven and determined by data from the Toronto Real Estate Board, Toronto Housing Market Analysis, CMHC and rentals.ca.

“Each unit in the complex has individual rent amounts and increases are determined by the market conditions and demand for that unit,” says Martin.

“We now have two classes of tenants in Ontario: those who live in units built pre-November 2018 that have rent control measures and those who live in units built after where the landlords can raise the rents however much they want ever year,” says Toronto Centre MPP Suze Morrison, the NDP’s housing critic. “22 John is one of the first buildings where we saw this loophole being utilized.”

Morrison has tabled the Rent Control Act, a bill that would reinstate rent control in the province. “There’s no limits to the increase, which actually makes the system ripe for abuse,” says Morrison.

When the provincial government announced they were eliminating rent control, housing minister Steve Clark said that deregulation would stimulate the construction of more purpose-built rentals and subsequently will alleviate the housing squeeze.

During question period on March 9, Clark stated that “since our decision, we’ve seen a huge uptake in purpose-built rental. [According to] reports from Urbanation and RBC reports, we have seen a rise.”

Yet according to another report by Urbanation, rental development also increased in 2018, following former premier Kathleen Wynne’s expanded rent control legislation. The report says “new purpose-built rental construction surged in Q2, with 2,635 starts recorded during the quarter, raising the total inventory under construction to 11,073 units – the highest in at least 30 years.”

Currently, city staff is looking into limiting rent increases on market rental units on city-owned sites (such as Housing Now projects) that contain city-incentivized affordable rental housing units, and will report their recommendations to council later this month.

For Newman, Amaddeo and other tenants at 22 John, the potential of rent increases has brought uncertainty and stress into their lives.

“I’ve lost a lot of sleep in the past couple months and it’s taking a toll on my mental and physical health,” says Newman. “The degree to which these kinds of things impact people’s lives is tremendous and I have to assume that the property managers of the world are aware of this at some level but they don’t care or they can’t afford to care. My personal life, my health, my happiness is distant from their bottom line.”

@SamEdwardsTO

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