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Code Red: Ontario rent control bill would hurt supply, critic says

The Ontario government has pledged to "expand" rent control in the province, after pressure from city hall and the opposition.

Toronto's high rents and low vacancy rent has led to calls for rent control from tenant advocates.

Eduardo Lima / Metro Order this photo

Toronto's high rents and low vacancy rent has led to calls for rent control from tenant advocates.

Introducing rent control on buildings built after 1991 would put a chill on new rental developments says the president of the Federation of Rental-Housing Providers of Ontario.

“This will have an effect in terms of much needed purpose-built rental,” Jim Murphy told Metro.

He made the comments as NDP MPP Peter Tabuns introduced a private member’s bill in the Ontario legislature to improve protection for tenants by scrapping an exemption for rent control in buildings built after 1991.

For all other units the province sets a yearly cap for rent increases on buildings built before 1991. In 2017 it is 1.5 per cent.

More from Metro's Code Red series on housing:

The vacancy rate is 1.3 per cent, which is considered very low.

Murphy pointed to a recent report from research firm Urbanation Inc. that said purpose built rental units in the GTA have increased to 27,812 apartments over the past year.

“A lot of that may be put at risk in light of a decision like this because there’s uncertainty in terms of decisions that are made,” he said.

“All of these projects will be reviewed and may not proceed which will not help tenants at all, because there will be less choice.”

The bill is designed to better protect tenants, and remove the current loophole which is “leaving millions of Ontario residents in the lurch, “ said Ontario NDP leader Andrea Horwath in the legislature Monday.

Private member’s bills rarely pass.

Ontario housing minister Chris Ballard told Metro last week that the 1991 loophole was “not legislation that’s working today," but stopped short of saying he would scrap it, pledging instead to “expand” rent control.

Marva Burnett, president of ACORN Canada, which advocates on behalf of low and moderate-income people, wants to see the 1991 loophole scrapped.

“It’s punishing the tenants for living in a building that was built after 1991,” she said.

Tenants who do face rent hikes are at risk of losing the “roof over their head” or taking from money for groceries or medication to make up the difference.

Burnett called the argument that rent control restricts demand “self-serving,” and added the vacancy rate is still very low despite existing rent control on buildings built after 1991.

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