Proposed rent increase freeze: Impacts for housing providers
On September 17, 2020, the province tabled Bill 204, Helping Tenants and Small Businesses Act, 2020, which would freeze residential rent increases for 2021 for the majority of rental units that are covered by the Residential Tenancies Act (RTA). If passed, the 2021 rent increase guideline would be 0% (revising the initial 2021 guideline of 1.5%) and no rent increases could come into effect between January 1 – December 31, 2021, even if a landlord provided a rent increase notice before the legislation is passed.
Importantly, the proposed rent increase freeze would also apply to households receiving rent-geared-to-income (RGI) assistance or paying low end of market rent in community housing. Service Managers and community housing providers would continue to be required to lower rents where RGI tenants experience reductions in household income (however it is currently unclear what the process will be for RGI tenants whose household income increases).
Landlords would still be required to give at least 90 days’ notice for any rent increase that will take effect in 2022. Notices for an eligible 2022 increase may be issued in 2021.
Exceptions to the freeze would include:
- Homes for special care and developmental services
- Co-operative housing members paying market rates
- Some above-guideline increases in rent (pending approval by the Landlord and Tenant Board (LTB))
- Agreed upon rent increases between a landlord and tenant in exchange for an additional service or facility (e.g., air conditioning, parking)
Above guideline rent increases would not be allowed for increases in municipal property taxes during the rent freeze, unless they were approved by the LTB before the proposed legislation passes.
As we expect this legislation to pass shortly, we encourage providers to plan for budgetary adjustments as soon as possible, especially those whose fiscal year aligns with the calendar year (and may have been preparing to send out rent increase notices for 2021).
ONPHA is seeking clarity from the Ministry of Municipal Affairs and Housing (MMAH) on RGI rules under the proposed rent increase freeze. Stay tuned to our communication channels for updates, and reach out to member.support@onpha.org if you have any questions, concerns, or feedback to share.
We will also continue to advocate on the need for broad policies and supports to help maintain tenancies and preserve affordability, as well as to sustain and stabilize the community housing sector as we continue to deal with the challenges of COVID-19.
More information about the proposed rent increase freeze and additional items in the new legislation related to extending the temporary eviction ban for small business tenants and changes to voter registration for municipal and provincial elections is available in the news release and backgrounder.
