Wednesday, October 5, 2016

Residential Tenancies Act Needs Changing to Avert Affordable Housing Crisis

While I loved the musical Les Miserables, the song Master of the House always struck me as backward as the cast sings “Everybody loves a landlord. Everybody's bosom friend.”  From my perch, it seems that everyone despises landlords and wants to make them responsible for government’s shortcomings and many of society's problems.

Decades ago residential landlord and tenant law was contractual, that is, people signed lease agreements and lived by them.  But starting in the 1970’s in Ontario, the contractualization of residential tenancies has given way to a strict, complicated and onerous statutory model.

You can’t open the papers without reading about how government laments the lack of social housing, the lack of affordable housing, the high rents being charged in major cities and alternative rental models such as Airbnb. But the government is burying its head in the sand as politicians refuse to consider realistic solutions to a problem they themselves created.

The change has happened incrementally, as most change does.  Governments have practically nationalized private residential rentals, putting landlords in the driver’s seat and having them foot the bills to administer the government’s misguided public policy. Ontario has been the worst jurisdiction in Canada for piling impossible burdens on residential landlords.  Some examples include:
  • The government mandates rent increase guidelines that discourage building of new rental housing.  While it’s true that post-1991 buildings are exempt, the threat of eliminating that exemption is real, evidenced by two private members’ bills being introduced (and thankfully defeated) over the last decade.
  • The government requires landlords to continue housing tenants for long periods of time even when no rent is being paid.  No interest can be charged on late payments and most rent-arrears are noncollectable after eviction.  Yet the statute, the Residential Tenancies Act (the ‘RTA’) permits easy lease-breaking if the tenant wants to move out before the agreed term is over.
  • The government refuses to allow damage deposits, and won’t allow a landlord to enforce “no pet” provisions in a lease. While eviction applications for smoking in non-smoking units are sometimes successful, it should be clarified in statute.
  • The government allows an automatic right of appeal of Landlord and Tenant Board (the 'LTB') evictions to the Superior Court, costing landlords at least 6 months and thousands in legal fees, even when no rent is being paid.
  • The Residential Tenancies Act is overly complex and too strictly enforced with respect to timelines; the law doesn’t permit “fixing” defective termination notices, a requirement that doesn’t extend to tenants filing and then amending their own applications to the LTB.
  • The RTA cannot end a tenancy after a hearing, even if it’s about getting one’s own house back to move in or in the case of serious safety issues, if the landlord is found to be in serious breach of an obligation under the Act.  I’ve seen landlords forever lose the right to move back into their own homes based on a tenant’s inflated, exaggerated or entirely fictional complaints. 
  • The RTA allows the tenant, without notice, without filing an application and without providing any disclosure, to make their own claims at a hearing that was scheduled to deal with rent arrears, delaying the matter another 6 weeks with a needed adjournment so that the landlord can prepare to defend against the often minor or imagined breach.
  • The RTA doesn’t allow sophisticated parties in high-rent situations to freely contract out of the prevailing statute, and won’t allow absolute fixed-term leases for a set period.
  • The government’s own Policy Guideline on Rental Housing produced in 2009 by the Ontario Human Rights Commission doesn’t permit landlords to make sensible choices regarding income or lack of credit and tenancy history while conducting pre-tenancy application screening.
  • Worse, the Human Rights Code and its Policy Guideline upheld by the Courts don’t allow an eviction until the landlord, even the smallest single-unit landlord, has made efforts to accommodate a tenant’s refusal or inability to follow basic rules if that inability is caused by Code related issues.  Landlords have to accommodate the tenant’s conduct, at their risk and expense, to the point of undue hardship…practically the point of insolvency.  We all agree that those disadvantaged by disability or other Code-related factors need assistance, but shouldn't the dollars come from general tax revenues and not from landlords...the easy targets?
  • The Ontario government refuses to protect landlords who risk renting to those on public assistance by not mandating that Ontario Works or ODSP pay the shelter portion of the tenant’s monthly allowance directly to the landlord.  Tenants on government benefits are among the most likely to face eviction, yet this simple change that would benefit both landlords and tenants is seen as too draconian by Queens Park.
  • The City of Toronto makes it almost impossible to get out of the rental housing business.  Try to get a demolition permit to knock down an old building at the end of its life, and the City will insist you replace it with more rental units.  That type of policy makes a joke of personal property rights.  You can check out any time you like, but you can never leave.
The shortage of affordable rental housing is becoming acute.  But the Ontario government has washed its hands of it, and are practically begging landlords to rent out units despite the terrible risks they take and the unattractive environment government has created. 

The 2011 Strong Communities Through Affordable Housing Act, and new efforts at inclusionary zoning are honest efforts to create more accessory suites. But it won’t work and landlords won’t open up their homes until some of the risk is mitigated and the playing field levelled.

Some on the left are satisfied to retain tenant-centered policies that are creating this crisis.  They imagine that more social housing, built and operated by government will be the result. But the government coffers are empty.  Coincidentally, so are hundreds of thousands of potential basement apartments that could be freed up as affordable housing units. 

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