Repealing The Rent Control Act- Essay, Research Paper
Repealing the Rent Control Act-
In a just society, the ruling authority must decide what is
right when allocating wealth to its individual citizens. The same
ruling authority does this by intervening with the inner workings of a
marketplace to uphold its fundamental values and ideals. The aim of
government intervention is to create a just society that will reflect
the people s values. Governing bodies do this by establishing laws
that enforce fairness or equity . The Ontario government passed the
Rent Control Act in 1975. The law levels the playing field between
landlords and tenants. New units are exempt from controls for their
first five years after which the controls are put into place. The
controls put a ceiling on annual rent increases. Under current law, a
landlord may only increase a tenants rent by 2% plus inflation.1 As
with all other markets, the housing market is based on supply and
demand. If the nature of the market were allowed to take its course,
then the price of housing would become unaffordable for most citizens.
An unfair situation would be created where power and money would be
disproportionately appropriated to land owners. Rent control laws were
established by previous governments to protect society and its people
from inflated and uncontrollable housing costs. The Harris government
now wants to repeal these laws. On June 25 the Minister of Housing,
Al Leach, released a policy paper outlining the changes that are to be
made to Ontario s rent laws. Conservative legislators plan to pass the
proposed Tenant Protection Act in the fall. The omnibus legislation
will rescind the Rent Control Act, the Landlord and Tenant Act, the
Rental Housing Protection Act, Residents Rights Act, the Land Lease
Statute Amendment Act, the Vital Services Act.2 The most objectionable
change allows the act to lift controls off vacant units. The 3.2
million renters in Ontario are very concerned about the changes.3 The
housing ministry will accept written submissions from the public until
August 30. Public hearings are also planned in hope that they will
ease the transition. However, most people are indignant towards the
idea. Changing the rent control laws would be detrimental to society
as they threaten citizens positive right to affordable housing, harm
their mobility rights and increase the gap between the rich and the
poor.
The proposed Tenant Protection Act assaults peoples right
to affordable housing. If people are to adhere to a basic standard of
living, then the cost of their homes must be affordable. But what
exactly is affordable? The Ministry of Housing released a report
stating that 70,000 Toronto house holds (20% of the city s population)
do not have affordable housing. The report explains that a tenants’
housing is unaffordable if they are paying more than a quarter of
their gross income in rent. This is an alarming thought since some
renters are paying 70-80% of their gross income in rent.4 The problem
of high housing costs is combated by rent control to allow people
a minimum quality of life. Housing like medical care is not normal
good or service. It is a basic need. Renters need to buy more than
landlords need to sell. If the renter does not get a place to live, he
is on the street. If the landlord has no tenant, he just has an empty
apartment. In short, there is a mismatch of power in the rental
market. The laws of supply and demand are unfairly applied against the
buyer. Thus controls came into being precisely because the market does
not work. Lifting controls would hurt people s ability to bear the
cost of housing without serious harm. The government justifies this
action by arguing that something must be done about Toronto s
apartment shortage. Because apartments are offered below their market
value, they are sold faster new ones can be created. Toronto has a
vacancy rate of .8% with only twenty new apartment units built in
Metro last year.5 Currently, two thirds of renters move once in five
years. Since controls are lifted off vacant apartments, the government
believes that after a few years, most apartments will be decontrolled
and the supply problem would be solved. In truth, areas that are
already decontrolled are not seeing new apartments. Instead of
building moderately priced, modest apartments, developers find it far
more profitable to build condominiums. Clearly, condos do not fall
under the category of affordable housing. Yet, the province is making
it easier to convert apartments into these extravagant units. Under
the proposal, if there is a conversion, the warning time a tenant must
receive would be cut from 240 days to 120. Even if developers wanted
to build new apartments, the government s rationale is still flawed.
When the controls are lifted off vacants, tenants will not be able to
afford to move. Moving means and end to rent control. In other words,
the mobility assumption that they make is wrong. With the price of
vacants skyrocketing, and a notice that a tenant’s apartment is being
turned into a condo, where is a not-so-well-off tenant to go? Luckily,
previous governments have established non-profit housing. Also called
co-op housing, the Ontario Housing Corporation manages 1200 of these
publicly funded housing projects across Ontario. On these sites 84,000
units were sold to the low end of the housing market. They are
provided to ensure affordable housing. Someone who cannot afford a
condominium can easily take up residence in a moderately priced co-op
apartment. This would solve any claims to affordable housing rights
that people would be scared of losing under the proposal.
Unfortunately, soon after taking office, the Conservatives decided
that they would no longer support the building of non-profit housing,
and withdrew funding for 70% of planned non-profit projects. The total
reduction in funding to the O.H.C. was $82 million. This was done in
light of a waiting list of 40,000 people. Funding needs to be
increased, not reduced. 1228 units need to be built each year just to
keep up with the exigency.6 How are positive rights to affordable
housing supposed to be upheld after such a drastic cut? The government
explains that they expect the private sector to support the low end of
the housing market through the continuance of the Shelter Allowance
Program. This encourages landlords to build and maintain affordable
housing. In 1994 the government funding for the program reached its
peak at $2.4 billion. This favoritism of landlords was fiercely
protested by the Coalition to Save Tenants Rights. Why was the
responsibility of affordable housing cut from non-profit community
volunteers, and not landlords?
The C.S.T.R. had this to say:
To develop housing for the lower end of the housing market if rent
controls are lifted, the landlord lobby, FRPO, presents a list of
demands: lower property taxes on rental properties, no GST on new
building, no development charges for sewers, roads and parks. Home
owners will pick up the slack for property tax and development charge
shortfalls and everyone for the GST. These too, are a form of
government subsidies. Yet, FRPO persuaded Mike Harris that the
government shouldn’t be in the housing business because the subsidies
are too high. Ah, we get it! Subsidies are okay if they’re being
shoveled into the pockets of private landlords. But they are a bad
thing if they’re going to non-profit community groups that build
affordable housing. Money spent on co-ops is used far more efficiently
than the shelter allowances wasted on landlords. 9
In addition to subsidies, landlords say they will not build
affordable housing unless taxes are lifted from the building process.
The end result is that the proposed Tenants Protection Act would
cause no new affordable housing to be built. Only higher rents, which
will result in more evictions. An altogether vicious circle. As more
and more sources of affordable housing are disappearing, basement
apartments may become the only ones left. It is not known for certain,
but estimates number the amount of basement apartments in metro to be
in six figures. Many people rely on basement apartments for a home
simply because of the affordability of the unit. To their comfort
Bill 120 was passed as the Residence Rights Act in 1994, legalizing
basement apartments. Bill 120 also afforded protections to tenants by
strengthening eviction laws in their favor. To their dismay, Bill 20
was passed as the Land-use Planning and Protection Act on November 20,
1995. Bill 20 gives municipalities the choice of weather or not to
allow the building of any new basement apartments. Bill 20 which was
passed by the Conservatives, is only a foreshadowing of what is to
come. The proposed Tenant Protect Act declares all basement
apartments illegal again. The gains made for peoples positive right
to affordable housing would be lost. Declaring a potential supply of
small apartments illegal would worsen an already bad shortage. This
shortage of apartments will not be solved by lifting rent controls.
This would only result in the further development of lucrative
condominiums. With a reduction to public housing and the of barring of
basement apartments, affordable housing in Ontario is falling left,
right and center. The shortage is now worse. Affordable housing is not
only vital, but is a persons right to be able afford himself shelter.
All of society is hurt when its citizens can not allow for basic
living expenses.
By ending affordable housing, the repeals to Ontario s rent
laws would harm its populace by infringing on their mobility rights.
The changes would compromise tenants mobility by sentencing them to
their apartments. With controls lifted off vacants, tenants will not
be able to afford to move. Conversely, landlords who wish their unit
to be decontrolled will have to force tenants out. This will create
class war of landlord-tenant relations. Because landlords have the
upper hand in the housing market, tenant rights would be jeopardized.
This mismatch of power would result in landlords harassing tenants,
withholding repairs, and eventually, evictions. Landlords have had a
history of strong-arming tenants to get their wishes. With no rent
control on vacants, they will declare an open season on tenants.
Tenants would have little recourse but to take their complaints
directly to the Ministry of Housing, and file a lawsuit to be settled
in the courts. If the proposed Tenant Protection Act falls through,
the sheer volume of harassment complaints are expected to be so
numerous, that the lawsuits would put an unbearable strain on the
legal system. In the anticipation of the overload, the Ministry of
Housing has established a complaint line. The 24 hour message system
will be brought up to screen less important tenant problems and to
declog the Tenant Complaint Office.7 Leach also plans to create a
quasi-judicial tribunal. Complaints would be diverted from courts to
the tribunal for everything from increases to evictions. Both parties
would be given a short time to present evidence and make their case.
Shortly after, a judgment would be made. Since there are no appeals,
both parties would be expected to abide by the decision. If one party
complains that the other has breached the ruling, the tribunal would
send out their anti-harassment unit to investigate and slap fines.
Drive-thru justice? One-stop shopping? This Band-Aid solution to the
problem of tenant harassment will in no way protect tenants. Striping
their legal right to have a say in a real court is only done to keep
tenants out of the Minister s hair. When asked about the anticipated
problem of tenant complaints Al Leach was quoted as saying: We intend
to keep them out of the courts as much as we can. 8 Tenants cases
would be rushed through to keep the line moving. Although efficient,
this does not do justice to tenants concerns. Even if tenants were to
receive a fair decision that would ask the landlord to stop the
harassment, it is not enforceable. The small, underfunded
‘anti-harassment unit would not be able to deter the amount of
harassment anticipated. Their threat to enforce the rule of law is an
empty one. A joke. The government told the C.S.T.R. that it will
protect tenants by doubling the fines for harassment. Fines could be
quadrupled and it still would not matter because they are flawed in
their application. C.S.T.R. states:
Given that the Tories are slashing workplace health and safety
inspections, food inspectors and virtually every other kind of
enforcement of public interest laws you can think of, what makes you
believe their promise to enforce anti-harassment by landlords ? 10
Anti-harassment laws under the proposed Tenant Protection
Act are unenforceable and ineffective due to budget constraints.
Harassment protection afforded to tenants would become nil and an open
season would be declared on them. The first thing that landlords
would do to pressure tenants to move would be to deprive them of
repairs. This sort of behavior is frowned upon by the government.
Under the proposed changes, they shall show their displeasure by
doubling the repair fines. Nonetheless this change, like the
harassment fines, is an empty threat. Sixty percent of Ontario
apartments are greater than 25 years old.11 They either need extensive
repairs or they are so deteriorated, that they are ready to be
replaced by condominiums. This fact plays into the landlords pressure
strategy nicely. If a tenant does not want to move, he has to stand
and watch as his home degrades all around him. When the old furnace
breaks down, he will freeze. When the sink stops working, he will have
no water. It would only be a matter of time before the tenant realizes
that his struggle is useless. He will have to move. Landlords have
gone as far as charging tenants an extra fee of $180 per month for
having unauthorized appliances such as washers, dryers, and air
conditioners.12 If the landlord does not want to see his unit degrade
for the sake of higher rent, there are other options available to him.
He can scare the tenant out of his home. Landlords infamous for using
strongmen for this purpose. Washed out boxers or thugs looking to make
a quick buck are a landlord s best friend. Tenants are told to move,
or else. If they do not get the message the first time, then the
strongmen would reinforce their point. What is worse than no repairs,
or the threats of an enforcer? Eviction. If a tenant does not leave
because of the slumlike conditions or intimidation, he will be flat
out thrown out. Landlords do not like to resorting to this, because of
its expense and the time needed for the legal process. Evictions can
take up to four months. But if the changes are passed, eviction may
prove to be a landlord’s pastime. The Residence Rights Act was passed
by the N.D.P. government in 1994. This made tenants far more difficult
to evict. Under the proposal, eviction laws under the Residence Rights
Act would be repealed. Landlords would be given much more discretion
in evictions. The time it takes to evict would be shortened and there
would be no appeal process. Changing rent control laws would not only
harm peoples mobility rights in that they will not be able to afford
to move, but insult would be added to injury in that landlords would
not let them stay. Where would they go?
They would end up on the streets. Repealing rent control would
make the rich richer, and the poor, poorer. If controls are lifted,
the inherent mismatch of power in the housing market would cause a
shift in the wealth between landlords and tenants. Owners and
developers would become richer from the higher rent their land yields,
while those who can not foot the increases would be deprived of a
home. The forces in the market would cause tenants to be caught up in
an affordability gap . This is because the cost of building housing
has increased at a higher rate than average tenant incomes for the
last ten years.13 The poor would be especially hit hard. From
1982-1994, monthly incomes of tenants living in projects actually
fell, from $717 to $661. Eliminating rent control is supposed to raise
vacancy rates. However, vacancy rates do not deal with affordability.
Since 85% of renters fall on the bottom third of income earners, empty
apartments would come from those who could no longer afford them.14 If
the Tenant Protection Act is to pass, rent supplements should be
worked into the proposal. Supplements would help tenants fill in the
affordability gap created by lifting controls. This is not the case
under the proposal. Lifting controls would seriously harm many people.
Toronto s city planning and development department blames the
affordability gap for the increased usage of food banks. They say that
if controls are lifted, people will not have enough money for food.
This will result in unmanageable lines at the food bank.15 Alternative
housing is another housing program that is going to come under attack
by the changes. Also called special-care housing, this program is the
only thing keeping 47,000 people across Ontario off the streets.16
Alternative housing puts up single mothers, seniors, the disabled and
people who would be otherwise homeless without it. The Residence
Rights Act protects special-care tenants from eviction. The proposal
would repeal the R.R.A. to give landlords of care homes the power to
enter homes without notice to perform bed checks. They would also be
able to flash evict abusive tenants who fail to pay rent or damage
property. This worries many because these are the people who are at
most risk for homelessness. Special-care tenants are not the only ones
in danger. Because of this decades poor economy, the number of metro
residents that were evicted doubled from 1990-1995.17 The combined
effect of lifting controls and more powerful eviction laws can only
worsen the situation. Those who are forced out of their homes to get
their controls lifted and cannot afford a decontrolled unit, will slip
through the cracks and onto the streets. There would be more evictees
with a greater proportion of these people becoming Ontario s homeless.
Such was the case for Irwin Anderson. Irwin Anderson was one of three
street people who froze to death last winter. The inquest involved
linked the deaths to a lack of affordable housing in Toronto. In
particular, Anderson had been evicted for non-payment of two months
rent. But he had previously paid rent in his apartment in the
subsidized complex for five years. An arrangement for repayment could
have been worked out. Instead, he was evicted. The frightening truth
is that this could happen to anyone, even the well educated.
Mirsalah-Aldin Kompani, another of the three who froze last winter had
an engineering degree from the University of Kentucky. At this point,
tenants would not be shouting about their right to affordable housing,
they would be fighting for their basic right to a home. Their only
refuge from the cold would be confinement to a crowded hostel. These
may be no better than the streets themselves. The Toronto Coalition
Against Homelessness states that people loathe these places and that
affordable housing should be the central focus since hostels only
offer a superficial solution to the real problem.18 Consequently,
because of the affordability gap, cuts to alternative/public housing
and flash evictions, repealing rent laws would split Ontario s middle
class into two, putting half up in condominiums, while incarcerating
the others in hostels. Since the strength of society depends on its
middle class and its ability to keep people off the streets, the
proposal should be rejected.
For these reasons, the proposed Tenant Protection Act
damages society as it attacks Ontarians appanage to affordable
housing, restricts their movability and erodes the middle class. The
change would take away positive intervention and let the nature
of the markets decide a redistribution of wealth. Many would live on
the land owned by an elite few. This is not equitable so government
intervention in the markets must remain. When the majority of peoples
happiness and values are protected against the advantageous elite,
then that is a sign that a society is just.
—
Endnotes
1 Ministry of Housing, The 1996 Rent Control Guideline, p.1.
2 Toronto Star, Critics fear pending bill will strip tenant rights ,
June 26, 1996, p.A7.
3 ibid.
4 Toronto Star, High rents leaving no money for food, March 31, 1996,
p.A6.
5 Toronto Star, Province plans to protect tenants, June 25, 1996,p.A1.
6 Toronto Star, Ontario prepares to scrap rents controls, September 9,
1995, p.A3.
7 Toronto Star, Tenants get special line to snitch on a landlord, June
24, 1996, p.A7.
8 Toronto Star, Rent controls not scrapped, Leach says, June 7, 1996,
p.A10.
9 The Tenant Bulletin, C.S.T.R. fights rent control reform, July 26,
1996, p.1.
10 ibid.
11 Toronto Star, Province plans to protect tenants, June 25, 1996,
p.A1.
12 Toronto Star, Tenants get special line to snitch on a landlord,
June 24, 1996, p.A7.
13 D. Edwin and R.Vogt, Basic Economics, p.56.
14 Toronto Star, High rents leaving no money for food, March 31, 1996,
p.A6.
15 ibid.
16 Toronto Star, New tenant law could hurt most vulnerable, May 28,
1994, p.L6.
17 Toronto Star, Anguish of Eviction Day, July 7,1996, p.A1.
18 Toronto Sun, Aid homeless, Harris told, June 25, 1996, p.15.
—
Bibliography
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