Canada's Condominium Magazine
Peter Milczyn, Ontario’s Housing Minister, felt pressured to defend the new rent controls after news that at least 1,000 planned rental units have been converted to condos or cancelled due to the restrictions. [First reported on Condo.ca here “Over 1,000 planned rental housing units converted to condos”>>]
The Minister indicated he was “watching” the housing market since the government implemented their Fair Housing Plan. The two immediate and obvious impacts of the plan, which places rent controls on all units in Ontario were:
- New tenants faced significantly higher “entry” rent for the few vacancies as landlords realized they had to “front-load” their risk.
- Thousands of planned rentals were taken off the market either through conversion to condos or cancellations and more are predicted.
The Minister’s defence was a fairly laid back one. He pointed out that even before the rental controls “weren’t many rental units either.”
However, this flies in the face of the conversions and cancellations which remove hope of future inventory to meet the anticipated 34,000 rental units increase per year needed just to meet growth.
“So I’m listening to the industry,” he added. “We’re monitoring what’s going on, but the reality is, over a number of decades, about six per cent of the housing built was purpose-built rentals.” Which begs the question, will it now be less than six percent?
Toronto needs 34,000 units per year more
In addition to current vacant units, Toronto will need 34,000 per year more each year, according to a report from The Federation of Rental-Housing Providers of Ontario. [Reported previously on Condo.ca>>] The prediction was a shortage of 6,200 units each year, and probably increasing prices for new tenants (the new rules protect “existing tenants”).
The Minister’s response was: “You know, you have to look at what those rentals were going to be. Were they going to be luxury rentals? I believe they were projects that were going to be in downtown Toronto. I think it’s unlikely they were affordable or even mid-market rentals.”
Three provincially owned sites up for development
Milczyn pointed out that Ontario is putting up three provincially-owned surplus lands to development of affordable housing or “below-market” rents, with 10 percent dedicated to 3 bedrooms and families. However, the deficit is 6,200 per year. 2,000 is barely a dent in the projected need.