Tenants of at least two west-end Toronto condominium apartments have seen their rent double as of July 1, while politicians and experts are weighing in on the growing rental affordability crisis in the city.
Graham Farquhar lives in a 430 square foot one and a half bedroom apartment with his roommate in west-end Toronto with no balcony, no real view and said he received notice Sunday his rent had doubled from $1,650 to $3,300 per month.
“We honestly thought 1) it was an April Fools joke or 2) it was fake,” he said Tuesday. “I was like — it can’t be $3,300 there’s no way. So we kind of didn’t really acknowledge it on Sunday.”
WATCH: Critics call on province for stricter rent controls after Toronto landlord moves to double rent of some tenants. Mark Carcasole reports.
Farquhar said he and his roommate live in a “shoe box” apartment and have always like living in the Queen Street West neighbourhood — but agree it’s “nowhere near worth that money.”
“It’s very unreasonable,” he said. “If we’re going to be paying that we’ll obviously look into something that has a waterfront view and 600 square feet or something. But it’s definitely not an option for us to stay.”
Around the corner at 38 Joe Shuster Way, in the King Street West neighbourhood of Liberty Village, the situation isn’t much better for Jon Moorhouse and his roommate.
The pair live in a 650 square foot two-bedroom apartment with no balcony and said they got the same notice on Friday from the company that has rented them their unit since September 2014, which said their rent was doubling from $1,660 to $3,320.
“I would never consider paying this amount, considering I know people who own houses and their mortgages are much less than what the rent is going up,” he said.
“What we’re going to do if nothing changes is look for a new apartment in May or June to move out by June 30 or July 1 because there’s really nothing else … I’m not sure how I can personally fight it.”
Both men rented their apartments from residential developer Urbancorp, but were informed trustee company KSV would be taking over. Neither Urbancorp nor KSV responded to repeated requests for comment.
“If it’s happened to us and our neighbours, it’s happened to quite a few people in the building,” Moorhouse said.
“My guess would be they’re coming in to maybe clear them out, clean them up and then probably resell them to try to make money back.”
Toronto Mayor John Tory said he found the doubling of any resident’s rent in the city “excessive.”
“The private sector — in carrying out their own activities with respects to the rent they charge — should be very careful about what they do in instances like this because it can provoke the kind of legislative and policy reaction that is something they say would be very much against the interest of future construction of rental accommodations in the City of Toronto,” Tory said during a press conference at Pearson International Airport.
“And that would be a very bad thing for tenants and a very bad thing for the economy. And I just hope the people in the private sector like the landlord in this case will consider very carefully how they behave themselves in this marketplace so there doesn’t have to be a reaction that they would define would be damaging in the end to the rental housing sector.”
Avery Shenfeld, managing director and chief economist of CIBC Capital Markets, said while he sympathizes with the renters in this case — he does not believe that imposing rent control is an appropriate reaction by the government in response to this situation.
“The reason why rents are rising sharply in Toronto in part is that we don’t have a lot of rental stock and we need to encourage more. More supply which will actually keep a lid on prices,” he said.
“If all of those people had an empty building next to them that they could move into then the landlord wouldn’t have a lot of leverage in trying to raise rents.”
Shenfeld said rent control undoubtedly helps the renter who already has an apartment that is covered, but it hurts the person who’s still living at home and can’t find a place to move into years down the road.
VIDEO: Real estate agent weighs in after west-end Toronto condo tenants see rent double
“Right now we have a very tight market in terms of vacancies. Which gives the landlord a lot of bargaining power. Landlords would have much less bargaining power if we incented more construction of rental units,” he added.
“Your ability to raise the rent depends on if the market is competitive … If there’s lots of vacancies nobody is raising the rent aggressively on their current tenants because they fear they’re going to have an empty apartment.”
Ontario Premier Kathleen Wynne said during a press conference Tuesday the argument that limiting rent control to older buildings encourages developers to build more rental units “does not actually hold water” with her.
“Those particular examples this morning were particularly egregious. They were, to my mind, really unacceptable,” she said.
“It’s a very urgent matter. It’s an extremely urgent matter and as I’ve said, we are on it. We are working on the different initiatives that we think are appropriate for the Ontario market.”
The Liberal government is in the process of developing what it calls “substantive” rent control reform.
Currently, annual rent increase caps only apply to residential buildings or units constructed before November 1991.
This year the rent for those tenants could be increased by up to 1.5 per cent without the landlord applying to the Landlord and Tenant Board, but there is no cap for units built after November 1991.
Wynne said developers argue that the 1991 rule was important so that more rental units would be constructed, but she says that hasn’t happened in any comprehensive way.
A recent CIBC Economics report said the average rent in the Greater Toronto Area has risen by nearly 12 per cent in 2016 to a record high of $2.77 per square foot, and tenants in some newer units have told media outlets about skyrocketing rents, which in some cases are doubling.
With files from The Canadian Press