In the release of Ontario’s latest Economic Statement last week the Ford government announced it would start exempting new rental units from rental control regulations.
The new regulations will effectively change the Residential Tenancies Act and allow landlords to make unlimited increases to the rent of newly built apartment units.
The Ford government is calling it their Supply Action Plan, and while it will give landlords the power to raise rents to however much they’d like in the future, it will maintain rent controls for existing units.
“This will help create market-based incentives for supply growth that will encourage an increase in housing supply to meet the needs of the people of Ontario,” states the provincial report.
But while Ontario Minister of Finance Vic Fedeli maintains the move will be good for the rental market, GTA cities, including Brampton, are even more worried about housing affordability.
Brampton already has a lack of legal apartments, with most 1 bedroom units hovering at an average of about $1,200 per month. There are a number of new apartment building developments planned for the city, but these units would fall under the new legislation and landlords will have free rein to charge whatever they’d like.
The government says this new measure will help address current shortages in Brampton, Toronto and area cities, by encouraging developers to build more units, but critics say it will only make affordability more challenging.
“Rent control policies that weaken investment incentives and construction activity have played a role in limiting supply growth in purpose-built rental housing,” says the plan.
“Part of this initiative will be the reintroduction of the rent control exemption that will apply to new rental units first occupied after today. This will help create market-based incentives for supply growth that will encourage an increase in housing supply to meet the needs of the people of Ontario.”
The new rules came into effect immediately on Thursday when Fedeli made the announcement and will apply moving forward on any new rentals in Brampton.