By Jean Fair
The Vacant Unit Tax (VUT) should not apply to owner-occupied homes, but only target speculators. Counc. Danko said: “You only have to pay the VUT if you own two houses and decide to leave one of them vacant for more than 183 days. They must own more than one home.” Counc. Jackson said he could point out where there are derelict properties that had been uninhabited for a long time…to go right after them. Those are the problem properties that can easily be on the market and provide affordable units & housing.”
Some couples now need two bedrooms. According to The Center for Disease Control and Prevention, one in three adults in the U.S. reported not getting enough sleep. One in 25 American drivers admitted to falling asleep while driving at least once in the previous month. The American Academy of Sleep Medicine survey shows that more than one-third of people say they occasionally or consistently sleep in another room to accommodate their partner. Should some property owners have to give up their homes because of changing sleep requirements and health conditions? At the December 14th Wards 2 and 3 townhall, Counc. Kroetsch advised that if a property worth $1M were expropriated, the city would pay them $1.2M… an extra $200k for the inconvenience. The city offers no incentives to residents to create rental units, nor does it offer any compensation for a forced move because of the VUT. It should do both.
A February 2023 opinion piece, “Don’t fault the market for out-of-control rents”, said that in Ontario, rent controls “allow rents to keep up with inflation”; however, the Federation of Metro Tenants Associations advises that a cap was introduced years ago. Even if inflation is five or six per cent, a landlord can’t increase rent above two and a half per cent” …with a few exceptions including units that come to market after November 15, 2018. Go after them! Ontario’s Rent Increases were limited to 0%, 1.2%, and 2.5% in 2021, 2022, and 2023, respectively. Municipal Affairs and Housing Minister Steve Clark said that 2024’s rate increase is also set at 2.5%, it is below the average inflation rate of 5.9 per cent. The former Carlisle Retirement home was bound by those guidelines; it could not afford to continue… the canary in the coal mine.
The rights of landlords are in a sad state. The city advises how many people may occupy each unit. There’s no such thing as a damage deposit. In Ontario, landlords cannot unreasonably withhold consent for requests to sublet but sublets can easily run amok. Kelly Cutrara (How bad have things gotten between landlords and tenants?) has friends who are small landlords who say that they will never rent out their space again. 90% of the Landlord Tenant Board unheard cases are coming from landlords.” The LTB backlog predates Covid. Some owners, wishing to sell, are waiting over 9 months for a hearing because it’s difficult to sell without vacant possession. Small landlords are losing their properties, and going bankrupt. Many landlords are paying exorbitant amounts, “Cash for Keys”, to get tenants to leave.
In the 1960’s and early 70’s, 60% of building permits issued in Toronto were for multi-family rental dwellings, and vacancy rates were around 6%. In the 1970’s, governments gave incentives for home ownership which led to a rental housing construction reduction of 77%, and vacancy rates of 1% where they remained for 25 years. After the creation of the Rental Fairness Act of 2017, some GTA Real Estate Brokers advised that up to 10,000 purpose built rental housing units were either eliminated or converted to condominiums. Governments must, again, offer incentives to investors to develop (or maintain) rental properties, and match the numbers invited to our shores to the housing available.
Many issues confront small landlords. City Hall should halt this version of the VUT, and, instead, make owning a rental property an attractive option for investors.
