Is the Ford Government Moving in the Right Direction on Housing?

    Is the Ford Government Moving in the Right Direction on Housing?

    Our provincial government is tasked with finding a balance between tenants’ rights and property rights – this article takes a look at how they are performing and whether there is any room for improvement.

    Let’s start by acknowledging that the government’s task is not an easy one.

    Take Toronto (specifically, the GTA), for example, which represents almost 50% of Ontario residents.

    Over the last several years, the statistics compiled by betterdwelling.com (https://betterdwelling.com/city/toronto/evictions-across-ontario-are-on-the-rise-and-not-for-late-payments-interactive/) show that although a higher proportion of tenants are paying their rent on time, landlords are filing for more evictions on other grounds.

    From an economic incentive perspective, this trend makes sense – as market rents continue to outpace rent control increases, landlords are finding ways to get around the rent control rules that were implemented under the Wynne government.

    The Ford government’s ideas on how to solve these problems are somewhat one-sided – they include partially undoing the new rent control regulations, and more recently, proposing changes that will reduce waiting times for evictions.

    Whichever side of the political fence you might sit on, take a step back and ask yourself some fundamental questions.

    First of all, who are we trying to protect, and from whom? The government has to balance the rights of both tenants and landlords. However, not all tenants (nor landlords for that matter) are created equal.

    Should we, as a society, bear the cost of protecting a tenant in a low-income rental building from market rent increases? Most of us would agree. What about a tenant in a luxury Yorkville condo – should just as many resources be spent protecting their interests?

    Unfortunately, our current regulatory environment does not distinguish between different “types” of tenants, which results in wasting of funds that could be used for people in real need of help.

    Nor does it distinguish between landlords, which could range from a multi-billion dollar Real Estate Investment Trust (some of which have a history of systematically taking advantage of their under-privileged low-income tenants) to a pensioner who decided to invest her life savings in a single investment property.

    Regulations that treat all situations and all stakeholders with a “one size fits all” approach are doomed to failure – as evidenced by the trends mentioned above.

    An alternative approach that would provide more optimal / fairer solutions would be to replace rent-control (which is very expensive to administer and impossible to properly enforce) with an expanded housing subsidy program.

    Subsidized housing in Ontario currently consists of a jumbled mess of different organizations (at varying levels of government), each with their own application process, criteria and waiting lists (some as long as 7 – 10 years!).

    The idea, however, is much more sensical than rent control regulations. If these subsidy programs were expanded (to reduce waiting lists and increase subsidy levels), and streamlined / amalgamated to reduce confusion and complexity, the overall outcome would be a more comprehensive system that inherently accounts for:

    • – The tenant’s level of income and their housing needs.
    • – The landlord’s desire to earn market-level rent.
    • – A more even distribution of cost across society, where housing subsidies are uniformly funded by all taxpayers, instead of just those who decide to invest in housing (rather than the rent-control-free stock markets).