Tuesday, July 23, 2019

Property developers call for changes to Ontario rent-control measures

ontario property developer

Property developers in Ontario are calling for changes to rent-control measures announced by the province in April, saying they are too harsh and are already causing builders to cancel apartment construction projects.

Jim Murphy, chief executive officer of the Federation of Rental-housing Providers of Ontario, said representatives of his industry have met with Ontario government officials to urge them to remove rent controls on buildings constructed in the future while maintaining the limits on existing properties that have already been built.

The province announced new measures on April 20 that would expand rent controls to all rental properties in Ontario and cap the rate of annual rent increases at the rate of inflation or a maximum of 2.5 per cent annually. Rent-control rules previously only applied to buildings constructed before 1991 and there were no limits on rent increases in newer buildings.

Mr. Murphy said his industry was “exceedingly disappointed” by the announcement of the new measures in April, saying they were too harsh at a time when the province needs more purpose-built rental housing.

He said his industry has asked the province to exempt new construction from the rent-control rules to provide an incentive to keep building, and to raise the maximum rent-increase cap to 10 per cent from 2.5 per cent.

“We suggested 10 per cent, but we could have discussions – it could be less than that,” Mr. Murphy told reporters at an Ontario Housing Summit conference in Toronto. “In other words, you’d never have a doubling of rent, you’d never have a 40-per-cent or 50-per-cent increase.”

Ontario Finance Minister Charles Sousa defended the province’s 16-point housing plan during remarks at the summit on Tuesday, but said he is willing to talk to builders about their concerns with the rent-control rules.

“We’re having those discussions – we haven’t committed to that. … I’m always open-minded, but at this point our consideration is to temper demand and increase supply to protect consumers.”

Mr. Sousa said the apartment industry built very little purpose-built rental accommodation in past decades when there wasn’t rent control on those buildings, so it is unclear if rent control can be blamed for deterring construction.

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