Ontario’s 2011 Rent Increase Disappoints Landlords

by Chris on July 30, 2010

2011 Rent Increase Lowest in 35 Years

The Ontario government announced that the province’s rent increase guideline for 2011 is set at 0.7%.  The increase represents the maximum percentage by which a landlord can increase the rent for most sitting residential tenants without approval from the Landlord and Tenant Board.

The 2011 guideline is the lowest figure for Ontario landlords in three decades. By contrast, Ontario’s cap this year is set at 2.1%, while British Columbia’s allowable rent increase for 2010 is 3.2%.

The new rent increase guideline governs rent increases that begin any time between January 1, 2011 and December 31, 2011 and applies to most residential units in Ontario. In most cases, the rent for a unit can be increased if at least 12 months have passed since the tenant first moved in or since his or her last rent increase. The tenant must be given proper written notice of the rental increase at least 90 days before the rent increase takes effect.

The guideline was designed to take into account increases in landlords’ building maintenance and operating costs in order to protect tenant safety and health.

Some landlords are not impressed.

If fact, property manager and Sales Representative David Pylyp with RE/MAX Realty Specialists Inc., in Toronto has no plans to raise rents at all because he is concerned that, while the increase will do little to offset increased costs, asking for it will have a larger negative impact on the relationship with the tenants. “With financing at 2.6% (variable rate) and a low occupancy rate, I’m not willing to risk making the tenants angry for a less than 1% increase. That’s like saying, ‘Dear Great Paying Tenant, your rent of $1,800 is being increased by $13.’ They would hate that landlord every month,” he explains. Pylyp knows many landlords who feel the same way.

The annual rent increase guideline is based on the Ontario Consumer Price Index (CPI). The Consumer Price Index is released monthly by Statistics Canada and is regarded as a reliable measure of inflation.

Guideline Deviations

Landlords may apply to the Ontario Landlord and Tenant Board for permission to increase rent above the guideline if they can demonstrate that their costs for municipal taxes or utilities have increased by more than the guideline plus 50%. Landlords may also apply for an increase above the guideline for operating costs related to security services and for eligible capital expenditures.

This post is provided by Tenant Verification Services, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

{ 8 comments… read them below or add one }

David Pylyp July 30, 2010 at 12:19 pm

Thank you for your invitation to be quoted.

David Pylyp
Living in Toronto

Scott August 3, 2010 at 9:51 am

I request you no longer use David Pylyp in your articles. He is a Realtor first and foremost and owns properties only in Toronto.

Most landlords DO raise their rents annually, as we are already dealing with very low cash-flow levels. The annual increase is very important for us to keep afloat!

The 0.7% allowable increase is a pathetic joke and the McGuinty government will pay in the next election.

Alicante Car in Rental September 6, 2010 at 7:05 am

Most landlords DO raise their rents annually, as we are already dealing with very low cash-flow levels. The annual increase is very important for us to keep afloat!
+1

Kyle Robertson December 24, 2010 at 9:30 pm

Yes I agree with (Scott Aug. 3,2010, 9:51AM ), this rent increase is not only Pathetic joke, its the reason why a particular Mpp said the greater GTA should become its own Province or Country. Every move made by this Liberal bunch is geared toward the GTA.
I run 25 unit mobile home and being in the northern part of the Province we don’t gouge or tenants, our monthly rent on an average is around 200 Dollars (2011 rent increase $200 x .7% = $1.11.) what a joke. One bad snow fall, well you Know.
Our rent per year would probably be less than one months rent in the GTA area.
Its pretty bad when even the tenants thinks its sick. Thats why 4 yrs is way to long between elections. Bring on October

lori smith January 15, 2011 at 8:31 am

I am a tenant, a good one, meaning I pay my rent on time, don’t trash my home and maintain a very cordial relationship with my landlord. I am a long term tenant and abide by all the rules. I play fair and honest. My landlord just informed me she wants to raise my rent by 100.00/mt. I pay $700.00. I will have to inform her of the new rates for 2011, advising anthing above needs to be approved by LTB, However; I am willing to offer 3%, as we have not had an increase in 5 yrs. We have major repair issues that need to be addressed also. Plumbing, sump pump, bathroom wall falling in etc. Hopefully she won’t give me notice to move..we’re trying to resolve without getting the LTB involved, but whatever the decision she makes on my offer, I will get in writing.

Christina September 20, 2011 at 6:28 am

To Lori Smith, you have not had a rent increase in 5 years. What would you have been paying if your landlord increased it every year by the maximum? By now, it’s $772. In the meantime, you’ve been able to put this money away in “savings” and allow it to grow. Tell your landlord you’ll pay $775–what you would be paying and while you’ve received 5 years of savings. I’ve been both landlord and tenant.

Sara September 30, 2011 at 2:48 pm

Lori: I agree with you 100%. While we have not had a rent increase here in about 5 years, I personally think that it’s not even worth the extra $25 a month we’ll be forced to pay come Jan. 1st, 2012. We’ve had to involve the property standards office because our apartment building (and our own apartment within) is falling apart. We’ve spent 5 years waiting for new windows, as ours let all the cold air in every winter and all sorts of creepy crawly bugs. We’ve waited over 3 years to have the bathroom floor finished, as they had replaced the tub (since it was falling through the floor) and never fixed the floor. The back stoop on our entrance had broken off and we waited 4 months for it to be fixed; all the while I had to try to carry my then 6-month (and now 10 month) son in and out of the door, along with his stroller and diaper bag. HIGHLY unsafe! Huge chunks of wall are missing outside, none of the apartments are properly insulated… it’s just a joke! I think it’s sick that they think they can get away with raising our rent on us when we’re STILL waiting for these repairs!

Lewis January 27, 2013 at 9:42 pm

No rent rise in 5 years and the place is falling apart. Who would have guessed?

If your landlord fixed those things would you have gladly accepted a rent rise each year or would you have packed up and moved to a place where there were no rent rises but the place was falling apart?

We all have different priorities. People like to cry poverty, they just “can’t afford” a well maintained apartment. But like anything else we “can’t afford” (aka have deprioritized), it is because of the choices we make about how to spend money. Yes you can have a well maintained place but you will have to move to the next suburb, give up that third bedroom or reel in the Tim Horton addiction. When people start to admit this to themselves they start to be more responsible about how they spend their money and they learn how to budget.

I raise my rents to the max for almost every tenant almost every year. My units are renovated and very well cared for. Rent rises function like a sieve. A few of my tenants have left because of a rise and everything falls into place for everyone.

If inflation touches every other aspect of our lives why would rented apartments miraculously not be affected? Why would a tenant take exception to a rent rise when they don’t at the grocery store, gas station, etc?

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