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Adam Kitchener is a landlord with properties in Ontario. He has provided affordable housing to over 150 families including 60 refugees. He has also repositioned several large struggling multifamily complexes and works for landlords to provide quality housing across Ontario.
Despite what you might have seen In the media, most landlords aren’t raising rents in a get-rich quick scheme. In fact, in today’s rental climate, many landlords of small- to medium-sized properties are barely breaking even. If rental rates are based solely on greed, where was the greed prior to 2006 when rents were more affordable?
So, what’s really going on? Why is it that rents continue to go up when the market is saturated with would-be renters?
Like homeowners, landlords are facing the pressures of rising house prices, property taxes, mortgage rates, and utility charges.
The Landlord and Tenant Board (LTB) in Ontario was created in 2006 to help establish and enforce the rights and responsibilities of tenants and landlords alike. The aims of the board are to help mediate landlord-tenant disputes, resolve eviction cases, and keep all parties informed of their rights and responsibilities. It came into existence to try to avoid the very issues currently plaguing the system. The problem is, the LTB is broken.
Cutbacks and the resulting shortage of adjudicators are causing longer wait times to have tenant issues heard. In a desperate attempt to deal with these sharp increases, some landlords are trying to find ways around the situation.
The result? The broken LTB system allows bad tenants to go six to twelve months with no payment of rent, leaving small landlords with on average $30,000 in arrears, legal costs, and often damages to the home. Frustration has caused both parties to take the system into their own hands–with professional tenants not paying rent, knowing evictions will take upwards of a year and landlords offering buyouts or sidestepping the system to come to an early resolution and then turning their longterm unit into an Airbnb where they are granted protections, insurance and guaranteed collection of fees, all of which are not offered by the LTB. Landlords are often left with the cost of a bad tenancy and are instructed by the LTB to shoulder the burden of a non-paying tenant until it is deemed no longer financially reasonable to before granting eviction. Many scorned landlords are just simply selling off and removing the supply completely from the market and driving rents up for everyone else as supply shrinks in this already tight market.
So what can be done?
First, we need to address the housing shortage. There are not enough units to go around, and those buildings that do exist are dated. Cities across Canada, including the GTA, are facing a serious housing shortage–especially in terms of rental buildings. Many tenants are currently living in inadequate housing because there aren’t any other options. Providing incentives for landlords to build more rental units, incentivizing homeowners to build a laneway house or a basement suite, and building more units to anticipate growth in demand would establish an oversupply creating a healthy market with a three to five percent vacancy rate. This would stabilize the market and drive bad landlords out of the market.
Governments also need to address the affordable housing issues affecting our neighbourhoods. Many of the population’s most vulnerable feel they are being discriminated against in terms of securing housing. However, housing allowances have not risen to meet the current market, making it difficult for these populations to find housing. If governments both increased the housing allowance and paid it directly to the landlord, the result would be tenant and landlord security.
Finally, just as there are no repercussions for bad tenants, good tenants aren’t rewarded. Landlords have no way of really knowing who it is they are renting to. Rent does not impact credit scores, however, if it did, landlords could check the system, renting to those who make their payments regularly and on time. Also, having a way to track a would-be tenants rental history would again ensure good tenants into units.
The answer to the rental realities isn’t as simple as vilifying landlords as greedily increasing rents to pad their pockets. In fact, perpetuating this myth is adding more stress to an already tense landlord-tenant relationship. Moreso, misdirecting blame in this way we aren’t holding those with the power to make real change accountable.
Small landlords across the province are asking to have a seat at the table so we can help with the affordable housing crisis. The government wants cheaper apartments, but no one thought to ask the landlord why the rent is high in the first place?
Rising rents have to do with the costs incurred in being landlords. It is the result of rising property taxes, utilities, and maintenance. Because of the financial burden of dealing with bad tenants, including damages, evictions and trying to collect overdue rent. And as we have higher populations of people renting, both because they want to and because they can’t compete in the high-priced housing market.
Housing is about stability. Tenants want a stable home, and landlords want a stable rent. As a landlord, I want this stability for my tenants. I want each of them to have a home that they are proud of. Housing affordability will help make this happen, but finding solutions will only be realized when the government, landlords, and tenants work together to build more supply, provide better housing and offer more protection to both sides.