Op-Ed: Vacancy decontrol has failed tenants and should be abolished

Prior to the pandemic, Ontario was experiencing an affordable housing crisis. After 18 months it has become far worse.

Low-income renters across the province are struggling with the combined pressures of rising housing costs, stagnant wages, and lack of housing options. The COVID-19 pandemic has exacerbated an already precarious situation faced by thousands of renters. If the provincial government wants to help renters, it should end vacancy decontrol.

Vacancy decontrol is the term used to describe the limit on how much landlords can charge new renters for their unit. For renters with units occupied before November 15, 2018, Ontario’s rent control system limits annual rent increases to a percentage based on the Consumer Price Index.

However, when a unit is vacated the landlord is able to charge any new rent that the market will bear. The impacts of this scheme are significant.

According to the MLS Home Price Index, in the GTA, the average monthly rent for vacant units is some 20 per cent higher than the average rent for occupied units ($1,817 versus $1,513).

This financial incentive has resulted in some landlords not waiting for renters to move out to take advantage of vacancy decontrol. We have seen a stark increase of no-fault evictions such as landlord’s own use evictions and renovictions as a result.

The process has significantly contributed to the loss of affordable housing and contributed massively to skyrocketing rents. To be sure. average rents in the GTA have grown much faster than average income, placing rental households in increasing precarity.

The 2019 Toronto Vital Signs report stated that from 2008 to 2019 Toronto housing prices increased four times faster than income. Removing vacancy decontrol is critical to curbing the increasing cost of rental housing in Ontario and the rapid loss of affordable housing.

The provincial government eliminated vacancy rent controls in 1996, arguing the policy would encourage the creation of new rental units. Yet, that has failed to happen.

In the past 25 years, less than 8 per cent of new units built in Ontario were rentals, while condominium development has soared.

On the other hand, in Manitoba, which has a form of vacancy control, landlords can only increase the rent for a recently vacated unit to no more than the average rent for comparable units in the same residential complex. An analysis from the University of Winnipeg in 2011 found no evidence that these rent regulations had a negative effect on the supply or quality of rental housing.

Vacancy decontrol is a failed experiment that hasn’t led to increased housing supply, just increased housing costs for renters.

The Ontario NDP recently tabled Bill 23, Rent Stabilization Act, 2021 which is scheduled to go to second reading on November 25. If passed, the Bill would amend the Residential Tenancies Act to require landlords to set the rent for a new renter equal to or less than the last rent charged to the previous renter. The Green Party has also released a housing strategy that includes establishing a vacancy control system and strengthening rules and penalties for renovictions. With the upcoming provincial election, voters expect that strong housing policies will be a priority for all political parties.

There is no one solution to the affordable housing crisis, but vacancy control is one immediate measure parties can implement to help protect renters in Ontario. Without decisive action, the housing crisis will only continue to worsen.

Douglas Kwan is director and advocacy and legal services for Advocacy Centre for Tenants Ontario.

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