The Ontario government has set the 2012 rent review guideline at 3.1% – more than four times higher than last year’s rent review guideline of 0.7% and the highest set by the Ontario government in a decade. Private landlords are allowed to increase rents (with 90 days notice) up to the guideline limit once every 12 months.
Landlords who wish to raise rents higher than the rent review guideline can apply to the Landlord and Tenant Board for approval. Not all rented properties are covered by the rent guidelines – vacant units, units in buildings built since 1991, social housing, nursing homes and commercial properties are all exempt.
The provincial rent review guideline is set using the Ontario Consumer Price Index (CPI), which is calculated by Statistics Canada. In recent months, the CPI has been rising significantly due to rising energy costs. Tenants who pay their own utilities will be faced with the possibility of a significant rent increase along with higher utility bills.
The guideline increase comes at a time when the province’s renter households – who have annual incomes that are, on average, less than half of owners – are still dealing with the aftermath of the 2009 recession, including stagnant household income.
The high cost of rent is one major reason why there were more than one million visits to Toronto and area food banks in the past year. Lower-income households have to make difficult choices about paying rent or paying for other necessities, including food, medicine, childcare, transportation, clothing and other basics.