Will Rent Controls Actually Hurt Tenants
It's the first week of September which means it's a busy time for renting. Unlike past years, we now have rent controls. So how will this impact Toronto renters? This is not a panacea for Tenants, in fact, rent controls can cause a big problem for Tenants, for the short, and long term.
In the short term, Landlords are jacking up rents for new Tenants - increases are running at 10% plus. That's because, with rent control, Tenants who stay put will look at increases of only 2% in the second year. That increase will not cover the increase in operating costs for Landlords. So, Landlords want their money up front first. In other words, new Tenants end up paying for Tenants who do not move.
It sounds like the City of Toronto Land Transfer Tax. Because city property taxes are lower in areas outside of Toronto, they slapped on a tax for buyers-they are not voters-and gave a break to existing home owners.
So what about in the long term? Tenants will more likely want to stay put and Landlords will be more particular about who they rent to. We will begin to see less new rentals coming to market and the rental prices will continue to move higher for the foreseeable future.