Certain landlord applications to increase rent rose following Ontario's rent freeze legislation

Parkdale tenant Shaun Brown says she was shocked when she got a letter in the mail last month saying her rent could increase come June.

That's because last fall, the provincial government announced a pandemic rent freeze she thought would keep her rent in check.

The letter stated her landlord had applied for an above-guideline rent increase (AGI), which would raise her rent by three per cent, or about $44 a month.

"It was a shock, and I think it's kind of unfair and unexpected," she told CBC News.

"I was kind of thrown off."

She's not alone. 

In fact, statistics released to CBC News by Ontario's Landlord and Tenant Board suggest landlords have increasingly been turning to the board to hike rents, despite the October 2020 legislation passed by the Ford government that was supposed to freeze rents for most tenants this year.

Many tenants, like Brown, say they weren't aware the legislation included an exemption allowing landlords to continue to apply for AGIs. Landlords can apply for an AGI if they've completed major capital work. 

If approved by Ontario's Landlord and Tenant Board, a landlord can still pass some of those costs down to tenants in the form of a rent increase. 

Increases are capped at three per cent per year for up to three years.

"With the rent freeze, I was hoping that it would relieve some of the pressure and it kind of hasn't," she said.

Brown lives in a mid-rise building managed by MetCap Living.

A MetCap official told CBC News the AGI would reflect necessary capital work, which includes modernizing the elevators, replacing the boiler and installing a new security camera system.

"All of this work is in complete compliance with the Residential Tenancies Act, and addresses the need to restore the mechanical systems, heating systems and promotes the security of the residential complex," president Brent Merrill said in an emailed statement. 

He also noted that if the application goes through, MetCap offers an AGI relief program for tenants who require financial assistance.

Brown says she feels like the provincial government is making an already stressful time worse for tenants by not including AGIs in the freeze.

AGI applications rise in months following rent freeze legislation

The province, meanwhile, says that AGIs are critical to ensure housing remains safe and well-maintained for tenants.

"Ontario became the first province to introduce a rent freeze for 2021, which applies to the vast majority of tenants in the province" according to an emailed statement from Ministry of Municipal Housing and Affairs spokesperson Conrad Spezowka.  

The ministry also noted AGIs related to municipal tax increases are not allowed during the rent freeze.

The province's rent freeze legislation has seemingly done little to stem the rising number of AGI applications. 

In the first five months following the legislation's enactment, landlords filed 266 AGIs in Ontario. Of those, 91 were in Toronto. 

In the five months before to the legislation came into effect, landlords filed just 84 AGIs in Ontario. Forty-nine were in Toronto.

The Landlord and Tenant Board says it doesn't track how many of the AGI applications are approved.

AGIs harder to challenge during Covid-19 pandemic

Martine August is a co-author of a recent report on AGIs by RenovictionsTO — a volunteer-run organization tracking tenant issues.

"The process of dealing with AGIs is hard for people," August told CBC News.

"It's a challenging process to deal with. It's frustrating. Living through the renovations that are done in advance of the AGI being applied for is also frustrating." 

The report found that in Toronto, 64 per cent of AGI applications were filed by large corporate landlords.

Geordie Dent, the Executive Director of the Federation of Metro Tenants' Association, says he'd like to see the province do away with AGIs altogether. 

Landlords are "quadruple dipping," he told CBC News, noting they first collect rent and then an AGI increase. 

He says building improvements up the value of a landlord's property. Landlords can also claim the work expenses on their tax returns.

"You're dealing with a very precarious time," Dent said.

"AGIs really disproportionately affect seniors who are on fixed incomes, [and] that extra three per cent can mean a lot to them. So, again, we just wanted to see rents frozen."

Paralegal Dan McIntyre has been helping tenants fight rent hikes for 40 years.

He says tenants can challenge AGIs at the Landlord and Tenant Board, but it's particularly difficult during the COVID-19 pandemic.

Most AGI hearings are now being done in writing, rather than in person, which makes it difficult for tenants to fight, according to McIntyre. 

"Even from a paralegal perspective, without that ability to negotiate and ask questions, our hands are pretty much tied as well," he said.