My neighbous may have dodged “demoviction”. This is thanks to action at Kitchener City Hall.
Last year, I wrote that the townhouses my neighbours were renting were slated for redevelopment. Instead of 13 townhouse and apartment units, a developer planned to create 99 one- and two-bedroom apartments. On the surface it seems to answer the need for new housing. But as we discussed, because of Ontario’s rules on rent controls, the plight of the existing tenants would be made worse when they were evicted.
But in June 2024, Kitchener City Council approved a Rental Replacement Bylaw. The bylaw comes into play when a developer applies for a demolition permit for a property with six or more rental units. The bylaw makes the demolition conditional on the owner replacing the demolished units with the same number of units of similar size and at the same rent as part of the new, larger development. Existing tenants must be offered the right to move back into a new unit at the same rent or a cash payout equal to 12 months of rent. That is better than the three months of rent required under the Landlord Tenant Act when a tenant is evicted for demolition.
"Housing policy rests at the provincial level, but it is municipalities who have to deal with the consequences when there is not enough affordable housing."
The Ontario Municipal Act gives cities limited powers to maintain and add to the supply of affordable housing. These include powers to implement inclusionary zoning bylaws and rental replacement bylaws.
Kitchener follows Toronto, Mississauga and Oakville in implementing rental replacement bylaws. Kitchener also recently introduced an inclusionary zoning bylaw for housing developments near major transit stations—requiring new developments to have a small number of affordable rental units. Toronto is the only other Ontario municipality with an inclusionary zoning bylaw.
Municipalities are exploring other tools. Hamilton and London, Ontario have created rental unit license bylaws requiring owners of rental housing with five or fewer units to apply for a municipal license. The aim of these bylaws is to address “concerns from community members, property owners and students regarding illegal dwelling units, absentee landlords, property standards and yard maintenance complaints,” as the City of Hamilton explains.
Cities are also exploring restrictions on short-term rental properties, partly to prevent long-term rental units being converted to short-term rentals.
Another municipal tool is providing tax exemptions for non-profit housing providers to encourage more non-profit housing.
On the surface, it may seem that these municipal policies are an obstacle to developers building new homes. In fact, it is an example of municipalities using the few tools at their disposal to stem the loss of rental housing that is affordable for renters.
The common cause of high levels of homelessness is the lack of affordable housing.
Why are Ontario municipalities pulling out all these tools? Housing policy rests at the provincial level, but it is municipalities who have to deal with the consequences when there is not enough affordable housing for everyone. Homeless encampments have popped up in cities and towns across the province, and city councils cannot ignore them.
Sadly, some people, like the Premier of Ontario, cling to the view that people are homeless because they are lazy. Faced with a question about homeless encampments, Premier Ford told people living in the many encampments that have sprung up across Ontario during his tenure as Premier to “get off your a** and start working like everyone else.”
Another perception is that addictions and mental health are the cause of the homelessness crisis. Many people who end up in encampments may be dealing with addiction, mental and physical health issues. But researchers have found that communities with high levels of addiction are not always those with high levels of homelessness. The common cause of high levels of homelessness is the lack of affordable housing.
Canada’s and Ontario’s affordable housing and homelessness crisis are a direct result of misguided policy decisions. The decision of the federal government to stop building non-profit and co-operative housing in the mid-1990s has left Canada’s housing market without enough housing for people with low and modest incomes.
"Two-bedroom units with tenant turnover had increased rents of 35.6% - more than 10x the provincial rent increase guideline."
The Government of Ontario’s decision to remove rent control from vacant units and on units built after November 2018 has led to spiralling rental costs.
In Ontario, some rental apartments are covered by rent control. The government recognizes that landlords face growing annual costs for utilities, property tax and other operational costs. That is why the province provides a rent increase guideline which is related to the rate of inflation.[i] For 2023 and 2024, the guideline was 2.5%.
Between October 2022 and October 2023, rent for two-bedroom units that remained occupied by the same tenant increased 3.9%. (That’s above the guideline for a couple of reasons. One is that units first occupied after November 2018 are not covered by rent control. Landlords can also apply for Above Guideline Increases in certain circumstances.)
But look at what happened to rents for two-bedroom units that became vacant: rent in those units increased by 35.6%, more than ten times the provincial rent increase guideline! This creates a powerful incentive for real estate investors to remove current tenants and bring in new tenants. Demolishing an older building to create a new apartment building is one way to do that. Many tenants evicted this way simply cannot afford the higher rents—whether they have paid work or rely on social assistance.
We want to celebrate and encourage Kitchener City Council and other cities’ efforts to mitigate these loopholes, while acknowledging that municipal policy is not the best way to solve the housing and homelessness crisis. The most powerful levers for change are 1. Federal investment in building many more, new non-profit and co-operative housing units and 2. Provincial rent control that covers all rental units.
Listen to MCCO’s podcast Undercurrents episodes with MCC’s Greg deGroot-Maggetti and Beyond Housing executive director Dan Driedger as they discuss the housing crisis and possible solutions.
[i] There was an exception in 2021: “The 2021 rent increase guideline was 0% due to a government-imposed rent freeze to help tenants during COVID-19. Otherwise, it would have been 1.5%.” That meant owners with sitting tenants could not raise rents, despite any increased expenses. Meanwhile, owners of newer rental units or vacant units have no limit on how much they can raise rents. It is better to have rental increase guidelines that apply to all units and avoid arbitrary rent freezes.