Developers – disaster with rent controls
Major Toronto apartment developers are warning that Ontario’s proposals to expand rent controls would be a “disaster” that would push house prices even higher as the supply of new rental properties dries up.
The Ontario government announced earlier this month that it is reviewing rent control regulations in the province and considering “substantive changes”. Current rules allow owners to increase rents by up to 1.5% annually without having to apply for provincial approval for a larger rent increase, but only for buildings constructed before 1991. Newer buildings are not covered by rent control rules, and some tenants have complained about being hit with double-digit rent increases.
But developers say tight new rent controls – especially if there is uncertainty about future costs – would be a disincentive to build new apartment units in Toronto, where vacancy rates are already low. Many developers would not move ahead with projects, while others could opt instead for the relative simplicity of developing and selling condominium units.