The Federation of Rental-Housing Providers of Ontario is calling on the provincial government to implement a temporary rent control exemption to encourage development of purpose-built rental buildings.
“Our view is that if the government were to look at doing a 20-year rolling exemption, it would certainly be something that would help the pro forma for builders looking at potentially building new units and bringing on new supply,” said FRPO President and CEO Tony Irwin. “They’d look at that and say, ‘We’ll make the economics work and recoup our investment in the building.’ It’s one of many levers that could get shovels in the ground and get units built, which is desperately needed.”
In partnership with the Ontario Real Estate Association and the Ontario Home Builders’ Association, FRPO hosted the Housing Summit this week at the Toronto Region Board of Trade. The assortment of heavy hitters from the real estate industry discussed issues facing the housing sector and made pleas to the new Progressive Conservative government, led by Doug Ford, to rectify them.
Under Kathleen Wynne’s Liberal government, the post-1991 rent control exemption was repealed through the Fair Housing Plan, and Irwin believes it was a myopic piece of politicking.
“We have a supply problem and need to bring on more product,” he said. “The action taken by the previous government wasn’t helpful; it didn’t address the core problem. We need more density and more intensification, so how do we find the right mix of regulations and policies that will enable that to happen? The last government got that wrong, and our hope is that the new government will get it right.”
Toronto’s purpose-built rental housing stock is slowly falling into disrepair and landlords worry that rent control is cleaving their rental revenues and preventing them from covering operational costs like building maintenance.
“The vacancy rate is low, so new supply is definitely needed,” said Irwin. “We’re worried that the rental stock in Toronto is quite old, so owners need to be able to recoup monies that are needed to keep buildings maintained as they get older.”
Ontario Real Estate Association CEO Tim Hudak told CREW that rent control is the Fair Housing Plan’s greatest folly because it will encourage investors to spend their money in other provinces. Given the supply and demand imbalance, Ontario simply cannot afford to let that happen.
“You can’t move apartment buildings, but you can move the money that’s invested in them,” he said. “If we want more mom and pop landlords, or encourage larger buildings, we need to restore more balance to the Residential Tenancy Act and on rent controls.”
Neil Sharma is the Editor-In-Chief of Canadian Real Estate Wealth and Real Estate Professional. As a journalist, he has covered Canada’s housing market for the Toronto Star, Toronto Sun, National Post, and other publications, specializing in everything from market trends to mortgage and investment advice. He can be reached at neil@crewmedia.ca.
