Peel ACORN says PC government’s latest rent increase allowance gives landlords more power to renovict

Finding affordable, livable rental housing in Peel is made harder by landlords who put short-term profits ahead of long-term stability, for tenants and themselves, a local advocacy group says.

At the end of June, the PC government announced it will hold the annual rent increase guideline for 2025 at 2.5 percent — a move Doug Ford and his caucus patted themselves on the back for, claiming the allowable increase is below the 3.1 percent average rate of inflation (using outdated data). The increase guideline outlines the maximum amount a landlord can raise rent during the year for tenants without approval from the Landlord and Tenant Board (LTB), a governing body established in 2007 under the Residential Tenancies Act, which gives residential landlords and tenants rights and responsibilities, and sets out a process for enforcing them. 

The PCs increased the annual rent increase guideline which was set at 2.5 percent in 2023. Prior to that, 2022 saw the figure set at 1.2 and there was no allowable increase in 2021 due to a government-imposed rent freeze to help tenants during the pandemic. 

Under the current guideline, newer units are able to exceed the cap established by the provincial government. 

The guideline is meant to protect tenants from unfair increases. But Peel ACORN, a local housing advocacy group, argues the increase “creates a financial incentive [for] renovictions” while rental prices are already increasing at exponential rates across the region.  

“Renoviction” is when a landlord forces a tenant out claiming major renovations, repairs or demolition have to be done, sometimes to convert the use of the space. This is done through a notice to end their tenancy, known as an N13. It is a tool landlords are increasingly using to remove a tenant then dramatically increase rent when a  new lease is signed with someone else.

While the PCs are congratulating themselves for maintaining the rent increase guideline for the third consecutive year, Peel ACORN is highlighting what it calls the “devastating impact of loopholes” in Ontario’s rent control laws.  

“For the last two years, consecutively, the provincial percentage has been 2.5 percent and so we're wondering why a different number hasn't been chosen,” Tanya Burkhart, leader of the local Peel ACORN branch, told The Pointer. “There could be lower options for tenants in terms of provincial percentage.”

“For any new developments or buildings there's no rent control, and so that's led to exorbitant rent increases. So new housing that's being built is not affordable for tenants, and the affordability is not maintained over time.”

The provincial rent increase guideline applies to the majority of rental households — approximately 1.4 million — covered by the Residential Tenancies Act. But a key caveat, members of Peel ACORN have pointed out, is that it does not apply to rental units occupied for the first time after November 15, 2018, vacant residential units, community housing, long-term care homes or commercial properties. This means landlords are not mandated under rent control for those units and can increase the rent as they please through Above-Guideline-Increases (AGIs).

“Ford’s removal of rent control in 2018 is the reason why rents have skyrocketed, and so all of these conditions — AGIs and rent evictions — are designed to displace tenants and to increase rent,” Burkhart said. “We need the province to commit to full rent control.”

On top of the provincial increase, landlords can bypass the 2.5 percent cap by applying to the LTB for an AGI, which allows them to pass down the cost of major repairs or building upgrades to tenants, or if there has been a substantial increase in the property taxes of the building, to recover expenses that are not considered under the provincial guideline, according to the Federation of Metro Tenants’ Associations. Under certain circumstances, the maximum increase a landlord could ask for is nine percent in any one application, however, the LTB would force a landlord to spread such an increase out over three years. The maximum a landlord can receive in any one year is three percent.

This means that thousands of tenants could see their rent increase by much more than 2.5 percent, Peel ACORN warns. 

“The loopholes regarding above guideline rent increases or AGIs are being used aggressively by corporate landlords,” Burkhart explained. “So it's very difficult for tenants who have affordable housing to keep it affordable when they're going to receive an AGI. It could be anywhere from one percent to nine percent, and that's on top of the provincial 2.5 percent.” 

“So rent can easily become unaffordable, and it's very difficult for tenants to return their rent to previous amounts.”

Residents and members of Peel ACORN marched on July 11 to demand stronger rental controls from the Province, in addition to implementing vacancy control and a ban on AGIs.

(Peel ACORN) 

Without rental protections, the responsibility is left to the tenant to dispute an AGI, which Burkhart said can be a difficult process to go through due to the time needed to fight it. But if a tenant does not dispute it, the LTD automatically approves it. The process of “rubber stamping AGIs,” she explained, is “detrimental to tenants.” The landlord should instead have to justify the increase request.

The housing advocacy group is now calling on the Province to introduce a full rent control mechanism that applies to all buildings (not just those built prior to 2018), includes vacancy control “to stop exorbitant rent increases” on vacant units, and bans AGIs “that circumvent existing rent control measures.” 

“[With] vacancy control, if again it becomes vacant at another point in time of the year, it's like they get an extra rent increase,” she explained. “There are a lot of loopholes for landlords right now, and Peel ACORN is really advocating for full rent control in Ontario, and that includes a ban on AGI, full vacancy control and full rent control on units built after November 15, 2018.”

Burkhart says there needs to be measures in place for full vacancy control — legislation that would stop landlords from raising rents by any amount they choose on newly vacated units — and a cap on the number of increases that can be placed in a year. 

“A landlord will increase the bottom line simply by removing or trying to displace tenants through a variety of means, whether it's conditions of the building, whether it's harassment, the frustration of tenants, lack of maintenance — all of those conditions are used to frustrate tenants and get them out, and so renovictions are a large problem,” she explained.  

“That's the economic engine that drives financialized housing.”

On July 11, Ontario ACORN held rent control actions in five cities across the province at Conservative MPP offices, landlord offices, and buildings impacted by AGIs, including an apartment at 2869 Battleford Road in Mississauga where Michelle Sarantos, a tenant in the building, says Morguard, the property manager, has been benefitting from residents with several AGIs over the last few years, the most recent proposing a 5.8 percent increase. 

Members of Peel ACORN marched to the Morguard office to deliver a demand letter that opposed their latest round of AGIs amid ongoing maintenance issues in the building. 

Sarantos said she is still fighting an AGI from 2021 and now several tenants have been hit with another notice for a 5.8 percent increase. She finds herself frustrated as the AGIs regularly cite maintenance repairs as the justification for their use, but aside from some cosmetic-style repairs, Sarantos told The Pointer there has virtually been no constructive maintenance during her time living there. Balconies have been left untouched to the point where pieces of concrete are crumbling off, she explained, and tenants are being placed with the bill for the maintenance — something Sarantos said “is just totally unacceptable.”

“We're responsible for our units and first and last month's rent usually looks after any problems with that. But as far as outside brickwork and balconies and all this type of stuff, it should be done by the owner,” she said. “This is not a tenant's responsibility.”

“An AGI is just a glorified maintenance fee,” Sarantos added. “It's a money grab by these corporations who are multi-billion-dollar landowners, and they don't really need the money, but there's some landlords and they figure we can let things go and then get the tenants with payments, and it's just is not fair.”

In Peel, rent prices remain among the highest in the country. According to the latest monthly update from Rentals.ca, Mississauga has the fourth most expensive rent in Canada.

(Alexis Wright/The Pointer Files) 

According to a 2020 report from the Region of Peel, 80 percent of residents can not afford to purchase a home or rent in Peel. The Canadian Mortgage and Housing Corporation also stated in January that while rental unit supply has increased, the demand continues to outpace the supply for the second consecutive year. The Corporation revealed that Canada is experiencing record-high average rent growth at eight percent in 2023, “creating competitive rental conditions across major markets.”

Meanwhile, in Peel, rent prices are among some of the highest in Ontario and the rest of Canada.  

Rentals.ca’s July report showed rent in Mississauga is the second highest in the province behind Toronto, and fourth in Canada. The monthly update reported the average one-bedroom apartment rent in Mississauga was $2,371, a 1.4 percent increase month-over-month, but only a 0.4 percent increase year-over-year. The average rent for a two-bedroom apartment was $2,778 — a 2.8 percent increase from last month and a 1.5 decrease from the year before. In Brampton, the average cost of a one-bedroom apartment was $2,122 — marking a 0.3 percent increase from the previous month, and a 1.2 percent decrease from this time last year. For a two-bedroom apartment in Brampton, the average price of rent was $2,440, a 1.1 percent increase month over month and a 1.8 percent decrease from last year.  

“These people are having trouble putting food on the table. Families are paying $2,700, $3,000 a month, plus their hydro, their car insurance, plus their home insurance and having to put food on the table for their kids,” Sarantos stressed. “People are not making this kind of money, they’re just average people.”

“It's just horrendous what is happening.”

In many cases, AGIs, according to Peel ACORN, force tenants to cover the costs of their landlord's investment without seeing any return themselves, an exploitative move the advocacy group says “is concerning” given that a report released by Ontario ACORN earlier this year using data from the LTB found that 80 percent of landlords who applied for an AGI in 2022 were large corporations with billions of dollars in assets. The data also highlighted how landlords are exploiting certain types of eviction notices, like N12s or N13s, to get tenants out of their units to hike up the rent. 

The report details how these practices allow landlords to increase rent prices or “turnover” their rental units after the tenancy is terminated through an N12 or N13. It added that while the province’s existing rent control measures ensure the rate is “not raised substantially as long as the tenancy continues for buildings built before 2018,” there is a lack of “control.” This, the report explained, leads to unfair cost inflation and “provides a massive financial incentive to landlords to do renovictions and push out long term tenants for the unit to become vacant.” It also found that 4,067 N13s were filed between 2017 and August 2023, and there was a nearly 300 percent increase in the number of N13s filed in 2017 compared to 2022. 

These types of notices are common in Peel. 

“There are a lot of old, aging buildings in Peel because purpose-built rental hasn't been really built in Peel for decades, and so a lot of our buildings are old and aging, and the conditions within some of these buildings are pretty deplorable,” Burkhart explained. “So not only are tenants being displaced because of conditions in the building, they're also receiving N13 [notices] because the landlord wants them out to renovate. Once the space is renovated, then the tenants also receive an AGI.” 

“So there's a lot stacked against tenants in terms of how they have to fight to keep their affordable housing.”

Email: [email protected] 

Twitter: @mcpaigepeacock

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