The temporary province-wide rent freeze enacted to help give Ontarians financial relief as they dealt with the challenges of the pandemic this year will soon be coming to an end.
Last year, Ontario passed legislation to freeze rent at the 2020 level for most rented units covered under the Residential Tenancies Act. Now, the province’s yearlong provincial rent freeze is set to end on December 31.
Every year, the provincial government sets out the maximum allowable rent increases for the year to come in rent-controlled unity. Those increases are modest and tied to inflation. Last fall, Minister of Municipal Affairs and Housing Steve Clark set this year’s guideline increase at 0% to help rental households during the pandemic.
But when the rent freeze ends, landlords of rent-controlled buildings will be allowed to raise rents by up to 1.2% -- the maximum allowable under the provincial guideline. The 1.2% represents the maximum most landlords can increase their tenants’ rent between January 1 and December 31, 2022, without the approval of the Landlord and Tenant Board (LTB).
READ: Ontario to Introduce Legislation for Province-Wide Rent Freeze This Fall
The rent increase is based on the Ontario Consumer Price Index (CPI), a measure of inflation calculated monthly by Statistics Canada using data that reflects economic conditions over the past year.
The guideline applies to most residential rental accommodations covered by the Residential Tenancies Act. It excludes rental units in buildings occupied for the first time after November 15, 2018, social housing units, long-term care homes, and commercial properties.
Tony Irwin, President & CEO of The Federation of Rental-housing Providers of Ontario (FRPO), told STOREYS that since the first lockdown, the vast majority of Ontario renters had paid their rent, and rental housing providers have offered deferred payment plans to those who have experienced difficulty paying their rent as a result of the pandemic.
"During this same period, rental housing providers have experienced considerable increases in operating costs, including property taxes, insurance and utilities," said Irwin. He runs the federation that's the voice of Ontario’s rental housing industry and is the leading advocate for quality rental housing.
Irwin believes that the rent increase guideline of 1.2% set for 2022 will help offset some of these increased costs, and for many residents, it will be the first time their rent has increased since 2019.
"FRPO members are committed to providing strong and stable rental housing and will continue to work with residents who experience difficulty paying rent as a result of the pandemic," added Irwin.
Those worried about their rent going up should know that increases in rent-controlled buildings are not automatic or mandatory. Landlords have to provide a proper 90 days' notice before the freeze is lifted to tenants that have occupied their units for 12 months or more for a rent increase that takes effect in 2022.
But with approval from the LRT, landlords can be approved for an above-guideline increase under certain circumstances, such as after significant capital work -- like air conditioning or parking -- has been paid for and finished.
