Toronto could see much-needed changes when it comes to commercial rentals. Tomorrow, Toronto City Council is set to vote on a motion in support of commercial rent reform. Brought forth by the always-outspoken City Councillor Josh Matlow, the motion is in support of three quarters of the Better Way Alliance’s Commercial Renter Bill of Rights.
The three parts it supports include the Right to a Standard Lease, Right to Affordable Dispute Resolution, and The Right to Predictable Rent Increases/Changes.
"Commercial leases are almost always a losing proposition for brick and mortar businesses,” said Aaron Binder, Director at The Better Way Alliance in a media alert. “The Bill of Rights addresses many of the pain points that both Tenants and Landlords have with an outdated system. Our Commercial Renter Bill of Rights is a simple roadmap for provincial governments to create sensible regulations that level the playing field for local business owners through commercial rent fairness."
Matlow’s motion highlights the less-than-inspiring reality of countless Toronto business owners in today’s climate.
“The vibrancy of Toronto’s main streets are dependent upon successful local businesses,” it reads. “Small restaurant, bookstore, clothing shop, and cafe owners give our neighbourhoods their unique character. Unfortunately, too many local businesses are under threat from unfair commercial rent hikes. Unlike residential rentals built before 2018, there is no rent control for small business owners. This lack of protection has resulted in neighbourhoods losing far too many of their favourite stores and restaurants in favour of chains that can afford higher rent.”
Skyscrapers in downtown Toronto financial district at duskstoreys.com
The motion points to data from the Better Way Alliance that reveals commercial retail rent increased by 20% between 2021-2023. “This places significant pressure on many businesses, forcing many to shut down due to unsustainable increases as high as 20-100%,” it reads. “Based on a survey conducted by the Better Way Alliance, over half of respondents indicated that rent represented more than 60% of their overall expenses."
The Better Way Alliance's 2022 Commercial Rent Report reveals that over 50% of businesses have either moved or shut down due to a significant rent increase or landlord dispute. "Businesses are still in recovery mode and holding loads of debt while trying to balance good wages and benefits for our employees." says Binder, "Local businesses can't create and sustain good local jobs if we can't pay the rent."
Not part of the motion, the Right to Withhold Rent is the fourth tenant of the Better Way Alliance Bill. “When a building repair needs to get done right away, businesses will often pay for it,” reads the Better Way Alliance’s media alert. “Renters would be able to withhold rent payments as an offset, without risk of eviction, until the landlord debt has been repaid. In Toronto, commercial rents have increased by over 30% in a single year.”
According to The Better Way Alliance, the Commercial Renter Bill of Rights is catching the attention of other municipal governments across Canada who are facing similar disruptions to retail zones.
"New Westminster has a strong history of local business ownership but I've heard from many brick and mortar shop owners that major rent increases and bad lease agreements are crushing their businesses,” said Tasha Henderson, a City Councillor in New Westminster, BC, who saw a recent motion of hers pass at Council and at the Lower Mainland Local Government Association. "We need to make sure commercial rents remain affordable or risk ending up with the same six chain stores in every downtown across BC and Canada,” she continues.
