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Will Ontario’s new housing regulations do anything of value?

Ontario is cracking down on the red hot housing market by introducing a series of incentives that will, hopefully, control inflating real estate in the Golden Horseshoe region.

The province plans to bring in a series of 10 different initiatives to help placate the housing and rental markets — but the proposed regulations are a mixed bag. The non-resident speculation tax (NRST) is the primary regulation the Ontario Liberals hope to pass and the plan has immediately fallen under criticism. NRST would tax individuals that are not citizens or permanent residents of Canada 15 per cent when they purchase a home. The tax would apply to transfers of land, including “single family residences, detached homes and condos”. It would not apply to residential apartment buildings. This tax is similar to the foreign buyer’s tax in Vancouver, but differs because it would allow people to refund the tax if they obtained permanent residency within four years of living in the home.

NRST is one of the less impactful initiatives announced Thursday morning because it only applies to foreign buyers and doesn’t adequately represent most of the buying market in Toronto. Blaming foreign buyers for the problems of a mostly localized Canadian real estate market echoes the xenophobic tendencies seen lately in the United States, and won’t help the housing sector in a large or meaningful way. Why not instead implement a vacancy tax so that local homeowners, including foreign buyers, wouldn’t be allowed to keep their homes empty? This would directly respond to the desperate need for housing in the city.

Luckily, one of the other initiatives does leave room for municipalities throughout the province to enact a vacancy tax if they so wish. This puts the onus on each individual city to make the decision, which is either an avoidance tactic or a way to appease a heightening tension between Canada’s largest city and the province. The province will also crackdown on assignment clauses, which allows a buyer to pass on the right to another person to buy a property, and is a ‘scalping’ strategy to avoid taxes.

In the renting sector, the province will allow rent control again, which was banned in 1991. This will prohibit landlords from raising rent by more then 2.5 per cent, which has recently become a massive problem in the Golden Horseshoe. This is a positive change for renters who are currently at the whims of greedy landlords without rental control in place. The province also plans to strengthen the Residencies Tenancy Act to further protect renters from corrupt landlords.

The province of Ontario is finally taking action on the over-inflated housing market in the Golden Horseshoe, but it still stands to ask whether the initiatives introduced are too weak? By introducing a non-resident tax, the province avoids tackling the larger issue. With an election around the corner, the province may be hesitant to bring the hammer down on wealthy homeowners. Hopefully, the City of Toronto takes the initiative instead and enacts a vacancy tax on behalf of the province.

That being said, the incentive to crack down on speculation driving the market up and re-introducing rent control are fantastic incentives for the province. It remains to be seen what the new regulations will actually do for Ontario — but it will be clear what works and what doesn’t have an incredible impact on the red-hot housing sector.

Rent control needed to control rising prices

Rent is at an all-time high in Toronto, with low vacancy rates and high prices. In other words, it is nearly impossible to find a home to rent in the current market.

The cost of renting a home in the city has increased above the rate of inflation, and the municipal and provincial governments are looking at ways to help control the price of rent. The Ontario government announced in March  it will consider substantial changes to rent-control rules due to tenants complaining about double-digit rent increases that are leaving people homeless. As the rules stand, only apartment buildings built before 1991 can have rent control and the government is now looking at changing that.

Ontario introduced rent controls in 1976 as a temporary measure to lower rent increases to the rate of inflation, and the NDP government offered a five-year rent control exemption to units in 1992 to encourage developers to build new units. The rules then became permanent. Instead, landlords can only raise rent by 1.5 per cent annually, but can apply for additional increases. Many stakeholders, including CIBC Capital Markets, are against re-implementing rent control because it previously reduced new construction of apartment buildings, and accelerated building deterioration that had rent control.

Rent control is being criticized because there is a concern that landlords won’t upkeep apartment rentals if they can’t lift the cost of rent, or that tenants will remain for longer. It is assumed that landlords will do the bare minimum to maintain an apartment and many rent-cost units fall into disrepair. Avoiding rent control because it would cause landlords to not maintain their property truly demonstrates how corrupt the rental market is. There should be a morally upright desire to fix units. Instead, avoiding certain rent control strategies because it is naturally expected landlords won’t upkeep their responsibilities proves how greedy and deplorable the apartment rental market can be.

The City of Toronto has decided to implement a new set of rules that will force landlords to track tenant complaints, respond quickly to repair requests, and provide pest control. The rules will come into effect on July 1 and is being widely celebrated by tenants in Toronto. The program will be enforced 12 months after launching and will apply to 3,500 buildings with three or more storeys of 10 or more units, resulting in 350,000 apartments. The rules indicate that emergency requests such as no water or heat must be handled in under 24 hours and a pest control situation must be dealt with in 72 hours. Landlords will also be forbidden from renting an apartment with a pest control problem.

Re-implementing rent control is a necessary in Toronto, especially with the new rules that have been implemented that would force landlords to upkeep their rental units. The cost of renting an apartment should be at par with the rate of inflation, because otherwise it is giving way to corruption and greed. It is commendable that the province and city are getting involved in rentals and will ultimately force landlords into a position to provide tenants with fair prices and liveable apartment units.

My apartment was infested with cockroaches. The housing crisis is real.

When I tell people my home was infested by cockroaches, I get a variety of reactions. Some people shrug their shoulders and tell me that is a common problem in Toronto and other people shiver in disgust. Anyone who understands the difference between one or two cockroaches and a full-blown infestation immediately gives me a hug and asks what I need. Just in case you don’t know, let me explain.

The word “infest” means “to invade in large number, causing damage or hardship.” To me, it means seeing over one hundred cockroaches climb into every one of my things while I try to get what remains out of the house. It means losing a substantial portion of the things I worked hard for and loved. It means war between man and beast — and let me tell you the cockroach always survives.

The apartment in question is in Parkdale on Spencer Avenue. Parkdale is a complicated neighbourhood, with a population ranging from wealthy families in turn-of-the-century homes to low-income people surviving in dilapidated apartment buildings.  It is known as a low-income neighbourhood with a plethora of problems. One of the main issues is affordable housing.

The affordable housing waitlist in Toronto stands at 90,000 households, despite the failed attempt at building 10,000 affordable homes per year, originally introduced in the Housing Opportunities Toronto Action Plan 2010-2020. As for affordable housing that does exist, the Toronto Community Housing Corporation has a $2.6 billion backlog in repairs. A lot of other housing is rent-controlled, which this leaves tenants in a vulnerable position if they have a bullish landlord who wants them out to raise the rent.

The housing situation in Toronto is in crisis and what is the result? Children, adults and seniors living in pest-infested housing, myself included.

City Councillor Gord Perks of Ward 14 Parkdale-High Park sees the struggles within his ward.“Every tenant is being ignored. Their voices have not been heard at Queen’s Park,” Perks says. “Oftentimes, people with rental control are being muscled out of their units. The landlords aren’t happy about people who are rent controlled of course. They are trying to get above guidelines by allowing cockroaches to persist, and not doing repairs properly so people leave. Then they can put a fresh coat of paint on and jack up the rent.”

Large apartment building companies own many of the buildings in the area and it is well-known that landlords hold much power in Toronto. This leaves tenants in a vulnerable and disempowered position to demand better living conditions in these buildings. Children live in poverty-stricken housing barely five kilometers from Queen’s Park and City Hall.

Why is it that the affordable housing crisis hasn’t been solved in Toronto?

“None of the levels of government have fixed that problem. The prime minister, premier, and mayor think they can solve the problem without collecting more taxes from the population,” Cheri Dinovo, MPP for Parkdale-High Park says. “For example, we have a significant stock of Toronto community housing units in Parkdale. The CEO of community housing has said that he does not have enough money to maintain standards.”

The problem comes down to a lack of funding. It also is the result of the three levels of government passing the affordable housing agenda in Toronto back and forth like a hot potato nobody wants. Many solutions have been presented including Section 37, the Open Door program, Inclusionary zoning (IZ), Landlord Licensing, and rent control. None of these have yet solved the housing crisis.

Part of the reason for the lack of success of any affordable housing program is due to squabbling between different levels of government. The provincial government reintroduced their affordable housing bill Wednesday, including inclusionary zoning that would mandate a percentage of affordable housing in all new condo developments. The City of Toronto adamantly rejects inclusionary zoning in place of Section 37, mandating developers provide mandatory funding for community projects. But, a provincial law states it cannot be used in conjunction with IZ.

In truth, all of these options should be adopted to help obtain affordable housing as quickly as possible. “There is a whole host of tools we should be dealing with to help the housing crisis-because that is what it is- and we are not,” Perks says. “There is a middle line that has to be met. Inclusionary zoning is absolutely essential. It is the only tool that is working in municipalities, but they need to be able to invoke section 37 to build infrastructure. Otherwise, there is a danger that the section 37 will creep into funding for new affordable housing.” The provincial government and Toronto city council need to come to an agreement and find middle ground for both laws. Otherwise, people will continue to live in unacceptable conditions.

When I walk down the street in Parkdale, I don’t see people that deserve to live in cockroach-infested homes. I see a diverse and thriving population of families, and a community from far and wide who have come together to live in a neighbourhood overflowing with culture. I see children who deserve to have a clean home where they don’t get respiratory illness in the winter or feel like they can’t have friends over because their apartment building is in such a state of disrepair.

When landlords try to take advantage of people who can’t afford high-end housing, I wish they could see these are real people, not so different from their own mother or brother. I wish the City Council and the provincial government could stop fighting and see that these are the lives of families that are being played with. We need change now. I can only hope that the housing waitlist will disappear and poverty-stricken living conditions will become a thing of the past.