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The governing Progressive Conservative Party of Ontario renewed its pledge to increase rental housing in the provincial capital.
Speaking at the Ontario Realtor Party Conference, Premier Doug Ford reiterated his government’s intention to eliminate rent control in new builds, a key point from his government’s Housing Supply Action Plan. He specifically noted that rent control has put downward pressure on an already historically low vacancy rate, to the detriment of families.
“A Key part of our plan is getting new rental units built and getting more housing options on the market,” said Ford. “We will keep rent control in place for those who already have it, but we will reintroduce rent control exemptions for new units. This move will help families have a better chance of finding a good place to live that they can afford.”
While it remains to be seen whether or not exempting new builds from rent control will indeed increase rental supply, Toronto is desperate. The Canada Mortgage and Housing Corporation’s Rental Market Report, released last week, revealed the city’s vacancy rate in October was 1.1%, a marginal increase on the 16-year low of 1% recorded last year.
“The rental market is still pretty tight,” said Jordan Nanowski, a CMHC senior market analyst. “We saw average rent increase 4.9% and people are staying put as a result. The turnover rate has decreased substantially from 14.5% to 11.2% because the average rent for vacant units are 18% higher than occupied units.”
Ford believes even more can be done to increase rental supply—although his government is still in consultations to figure out what else it will do.
“But we know we can do even more,” said Ford. “We need to cut the red tape that stops new buildings before shovels are even in the ground, or that discourages landlords looking to expand from creating new units… we need to cut red tape to make it easier to build the housing that’s needed, and we need to build faster.”
The CEO of the Ontario Real Estate Association, Tim Hudak—himself a former leader of the PC Party—welcomes the rent control amendment because he believes it will relieve pressure on available supply.
“More choice in the system will help keep rental costs under control and open up more housing choices for those trying to get out of mom and dad’s basement or get out of social housing,” he said. “Realtors also act for mom and pop investors who may invest in a condo or two and rent out for long-term income, so that’s good news for investors as well as tenants. Premier Ford pointed out that we have one of the tightest rental markets currently in North America. These measures will increase inventory and help give tenants, or prospective tenants, a lot more affordable choice.”
by Neil Sharma
03 Dec 2018