October 27, 2020
Honourable Steve Clark
Minister of Municipal Affairs and Housing
17th Floor, 777 Bay Street
Toronto, ON M7A 2J3
Dear Minister Clark:
The Ontario Real Estate Association would like to applaud your Government’s hard work and quick decision making during the last seven months of the COVID-19 pandemic. By extending the province’s Canada Emergency Commercial Rent Assistance program, more tenants will be able to keep their businesses open, even in the case of a mandatory public health shutdown. As each month brings a new layer of uncertainty to Ontarians’ lives, the government has provided guidance and financial support to ensure that people and businesses can continue to adapt to this new state of “normal.”
OREA would like to commend your work in overAn Open Letter to Minister Steve Clarkhauling housing legislation with the More Homes, More Choice Act, that demonstrates your government’s commitment to doing more for housing choice and affordability for Ontario’s homeowners, aspiring homeowners and tenants and to make sure that Ontarians have a great place to call home. On behalf of Ontario’s 80,000 REALTORS®, I am writing to you today to share our response to Bill 204, the Helping Tenants and Small Businesses Act, 2020. While the bill intends to promote a fair and balanced rental landscape for tenants and landlords, OREA is asking for your support for Ontario’s hard-working rental providers – particularly Mom and Pop landlords – as they continue to bear the weight of the pandemic through their small businesses.
At the beginning of the COVID-19 crisis, we saw the pandemic’s immediate effect on our economy through massive layoffs across all sectors. As a result, many tenants saw a loss of income. They were forced to decide between paying for necessities or paying their rent, leaving small landlords feeling increasingly strained. As we head into the fall months, new restrictions on specific industries result in a similar pattern of loss of employment and income for Ontarians, bringing on a myriad of new challenges facing both landlords and tenants.
Many of our members are landlords and have spent years saving tirelessly to purchase their income property. Many Mom and Pop landlords depend on their income from their rental properties for their retirement or use that money to help pay the mortgage on their primary residence or rental property. In response to the COVID-19 pandemic, many landlords deferred issuing rent increases since March 2020, to ease financial pressures on their tenants. Many small landlords were hoping to use the 2021 rent increase to make up for some of the losses they experienced with missed or reduced payments during the initial provincial lockdown period.
It is also important to note that a 1.5 per cent break for tenants does little to help those struggling to pay their rent in full every month. To address the root of the rent affordability issue, tenants and landlords alike need a more comprehensive solution through this crisis.
OREA is again asking the government to target those tenants that have demonstrated that they are in the greatest need of rent assistance. Bill 204 presents itself as a one-size-fits-all policy approach that may end up benefitting those tenants that can afford to pay their rent in full every month while penalizing landlords who have been working with their tenants to defer or lower rent during the COVID-19 pandemic and who were hoping to use the rent increase to even out their balance sheets.
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Rental property owners, especially Mom and Pop investors, choose to invest their savings from careers of hard work into housing. Their investments ensure that tenants have more choices in the marketplace with high-quality rental properties. In return, middle-class investors and entrepreneurs expect that they will receive a fair return on their investment. Otherwise, they may choose to invest elsewhere in the future, limiting Ontario’s rental housing stock. As landlords continue to struggle to collect or raise rents, investors may see Bill 204 as a deterrent to investing in ancillary properties in Ontario. Ultimately, this hurts tenants in communities across the province who depend on these small Mom-and-Pop investors for a steady supply of affordable, accessible, and safe housing options.
OREA is suggesting a time-limited, direct support payment to Ontario’s rental housing providers. For tenants who have demonstrated that they are unable to pay their rent due to a loss of employment or hours as a result of COVID-19, the rental-provider should receive some form of financial assistance to help with financial pressures and avoid a situation where they may be forced to sell their properties. In British Columbia, the BC Temporary Rental Supplement Program provided tenants and landlords with temporary support towards rent payments from April to August 2020 for renters experiencing a loss of income due to COVID-19. The program offered eligible tenants up to $500 a month in the form of a rent subsidy paid directly to landlords. Eligibility was determined by income, whether tenants had a dependent child and whether tenants paid more than 30 per cent of their household income towards rent. From April 2020 to June 2020, 90,000 applications for the subsidy were received by BC Housing, with 82,500 qualified applicants.
With the success of BC’s program to help tenants and landlords, OREA believes that a similar program should be implemented in Ontario to ensure that the most vulnerable rental providers are not forced to sell their properties or prepare for an unprecedented number of evictions due to a tenant who refuses or is unable to pay their rent.
As we continue to work together to promote a safe, healthy Ontario, OREA respects the government’s call to ask tenants and small rental-providers to work together to come up with meaningful solutions and work with residents in need. OREA is encouraging the government to offer immediate support to those with limited resources who will feel the rent freeze’s effects the most – Ontario’s Mom and Pop landlords.
We would welcome the opportunity to discuss a program that would best fit the needs of Ontario’s small rental-providers with yourself and your officials at a time that works for you.
I would like to conclude by thanking you and your staff for always making time to meet with OREA on this and other issues. OREA greatly appreciates the outstanding working relationship that we have developed with you and we look forward to continuing to work with you moving forward.
Please feel free to contact Jason Lagerquist, OREA’s Head of Government Relations, at jasonl@orea.com should you require additional information.
Thank you for your attention to this matter.
Sincerely,
Tim Hudak
Chief Executive Officer, Ontario Real Estate Association