TENANT PROTECTION ACT, 1996 / LOI DE 1996 SUR LA PROTECTION DES LOCATAIRES
CANADIAN MANUFACTURED HOUSING INSTITUTE
ONTARIO NON-PROFIT HOUSING ASSOCIATION
METROPOLITAN TORONTO APARTMENT BUILDERS ASSOCIATION
ONTARIO ASSOCIATION OF PROPERTY STANDARDS OFFICERS
HOME-OWNED, LAND-LEASED ASSOCIATION
ST JAMES TOWN TENANTS' COUNCIL
HIGH PARK TENANTS'
ASSOCIATION
BRETTON PLACE TENANTS' ASSOCIATION
CO-OPERATIVE HOUSING FEDERATION OF CANADA, ONTARIO REGION
CITY OF TORONTO COMMITTEE ON THE STATUS OF WOMEN
CONTENTS
Tuesday 5 August 1997
Tenant Protection Act, 1996, Bill 96, Mr Leach / Loi de 1996 sur la protection des locataires, projet de loi 96, M. Leach
Canadian Manufactured Housing Institute
Mr Doug Barker
Tenant Advocacy Group
Mr Kenneth Hale
Ms Kristin Marshall
Ontario Non-Profit Housing Association
Ms Kathleen Blinkhorn
Dr François Rouleau
Metropolitan Toronto Apartment Builders Association
Mr Richard Lyall
Mr Kyle Rae
Daily Bread Food Bank
Ms Sue Cox
Ontario Association of Property Standards Officers
Mr Joseph Perrone
Mr Frank Weinstock
Home-Owned, Land-Leased Association
Mr Fred Cox
Mr Jim Glover
St James Town Tenants' Council
Mr Cliff Martin
Mr Robert Kernerman
Rent Check Credit Bureau
Mr Henry Verschuren
Mr Richard Fink
High Park Tenants' Association; Bretton Place Tenants' Association
Ms Janet Lisboa
Co-operative Housing Federation of Canada, Ontario region
Mr Bill Morris
Sherkston Shores
Mr Ian Wilbraham
City of Toronto Committee on the Status of Women
Ms Catherine Leitch
Ms Janet Forbes
Mr Rob Herman
Mr Aslam Ahmed
STANDING COMMITTEE ON GENERAL GOVERNMENT
Chair / Président
Mr David Tilson (Dufferin-Peel PC)
Vice-Chair / Vice-Présidente
Mrs Julia Munro (Durham-York PC)
Mr Mike Colle (Oakwood L)
Mr Harry Danford (Hastings-Peterborough PC)
Mr Carl DeFaria (Mississauga East / -Est PC)
Mr Ed Doyle (Wentworth East / -Est PC)
Mrs Barbara Fisher (Bruce PC)
Mr Tom Froese (St Catharines-Brock PC)
Mr Steve Gilchrist (Scarborough East / -Est PC)
Mr Michael Gravelle (Port Arthur L)
Mr Rosario Marchese (Fort York ND)
Mrs Julia Munro (Durham-York PC)
Mr Mario Sergio (Yorkview L)
Mr R. Gary Stewart (Peterborough PC)
Mr David Tilson (Dufferin-Peel PC)
Mr Len Wood (Cochrane North / -Nord ND)
Substitutions / Membres remplaçants
Ms Isabel Bassett (St Andrew-St Patrick PC)
Mr Howard Hampton (Rainy River ND)
Mr Frank Klees (York-Mackenzie PC)
Mr Monte Kwinter (Wilson Heights L)
Mr Joseph N. Tascona (Simcoe Centre / -Centre PC)
Clerk / Greffier
Mr Tom Prins
Staff / Personnel
Mr Jerry Richmond, research officer, Legislative Research Service
The committee met at 1002 in room 151.
TENANT PROTECTION ACT, 1996 / LOI DE 1996 SUR LA PROTECTION DES LOCATAIRES
Consideration of Bill 96, An Act to Consolidate and Revise the Law with respect to Residential Tenancies / Projet de loi 96, Loi codifiant et révisant le droit de la location à usage d'habitation.
CANADIAN MANUFACTURED HOUSING INSTITUTE
The Chair (Mr David Tilson): Good morning, ladies and gentlemen. We are holding public hearings with respect to Bill 96. We have before us Doug Barker of the Canadian Manufactured Housing Institute. Good morning. You'll notice that not all members are here, but we've got a time restriction. If we want to keep to our time frame, we have to proceed, so if you could proceed, that would be appreciated.
Mr Doug Barker: Thank you, Mr Chairman, and good morning to everyone. I would like to thank you for the opportunity to appear before the committee to make this presentation. Just to introduce CMHI, the Canadian Manufactured Housing Institute is a national association representing the manufacturers of mobile and modular homes, together with the suppliers of goods and services to the industry, community owners and park operators. Of our approximately 19 manufacturer members across Canada, six are located in Ontario and contribute significantly to the Ontario economy.
CMHI also works closely with provincial associations across Canada, and this committee will have an additional presentation from the Ontario Manufactured Housing Association during your hearings.
Some members of the committee, others of the Legislature and staff, may recall that CMHI has previously been active in assisting in formulating legislation for mobile home parks and land-lease communities. We support now, as we did then, legislation that gives fair and equitable treatment to both tenants and landlords, and we applaud your intent to consolidate the six existing pieces of legislation into the one new Tenant Protection Act.
Our comments will be specific to the mobile home and land-lease communities portion of the legislation. The legislation specifically defines "mobile home" and "mobile home park" and "land lease home" and "land lease community."
Mobile homes and mobile home parks are generally communities of older-type homes that have been in existence for a number of years and have modest services and amenities. Frequently they are owned and operated as small family businesses. Conversely, land-lease communities generally are more modern facilities specifically developed with up-to-date services and amenities and are often targeted at the lifestyle retirement community age group.
Both developments provide the opportunity for the tenant to maintain equity and pride of ownership in a low-maintenance, single detached unit situated in the community at an economical price. These communities have pioneered the concepts of alternative development standards and privatization of services that are now becoming acceptable in other municipalities.
We firmly believe mobile home parks and land-lease communities have a significant role to play in providing affordable housing for the residents of Ontario. We wish to speak to the intent of the new legislation by offering the following specific comments.
Our first pertains to the rent control guideline formula. The intent of the legislation is that tenants in mobile home parks and land-lease communities receive the same protection as tenants in other rental accommodation. That is fine; that's a given. However, the legislation currently does not, but must, recognize the special maintenance and operating provisions needed for mobile home parks and land-lease communities. Legislation must acknowledge and address this situation.
For example, the annual rent increase guideline is apartment oriented and comes from a formula based in part on the increases in costs for heat, hydro, water and property taxes. The weight given to each of these components is supposed to reflect the average percentage of an apartment's operating costs attributable to each factor.
The situation is entirely different in a mobile home park or land-lease community. In those situations, the heat is paid by the tenant; water and sewer charges vary greatly depending on whether the services are individual, private communal, connected to municipal services or a combination of any of the above. Municipal taxes for the site may or may not be included in the rent. The park operator is responsible for the provision, ownership, operation and maintenance of all services; ie, water, sewage, roads, amenities etc.
The rent control guideline has some merit for modern land-lease communities. It does not for the older mobile home park. The majority of these older parks, due to the initial low rents they established, some mismanagement where capital was used to finance the park operation, failure to set aside replacement capital and tenure of rent control, are in dire economic situations. Rents of $100 per month are common, and with an increase of 2% to 3%, this does not offer any economic incentive for the owners.
We would like to work with the government to resolve this issue. We and the Ontario Manufactured Housing Association suggest the guideline address this situation by allowing rent increases to be the greater of guideline times three or $50 per month and that rent be decontrolled, as per the intent with apartments, when the unit or site is vacated. The effect of this effort will be to maintain healthy, viable communities in which the owners' equity in their units will increase with time.
The second point we'll comment on is required capital expenditures, principally infrastructure upgrades. The draft legislation has recognized the need for a cost pass-through allowance for capital expenditures when a public agency requires infrastructure upgrade; ie, water and sewer systems. There has been some discussion whether there should be an appropriate cap on this. We suggest that these requirements are outside the landlord's control but will be defined by appropriate engineering studies and subsequent municipal and MOEE approvals.
It is recommended that the actual costs involved, as attested to by the approval agency, be amortized and added to rent. Once paid, this cost would fall away from rent. Tenants should have the option of paying this expenditure as a lump sum and not be subject to rent increases.
There is also the potential of capital expenditures requested by the tenants. Similar to the principle of required upgrades for capital expenditures, we can envision a situation where the tenants may wish to instigate an upgrade relative to physical services; ie, paved roads and some new amenities. We would like to see provision in the legislation for the costs of such improvements, as recommended and approved by the majority of tenants and the landlord, to be a cost pass-through, to be amortized and charged again on rent and to fall away from rent when that is paid.
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The fourth point we would make is positive discrimination. Many of the modern land-lease communities are retirement-oriented and function exclusively in that regard. We would like to see the new legislation provide for positive discrimination in the form of zoning specifically for retirement communities. A recent decision in British Columbia and some recent events in the US have supported the principle of zoning related to age.
In making this presentation, we are summarizing just a few key points. Just to go over them briefly: A rent-control guidelines formula has some merit for the modern land-lease community, but provision must be made to address the existing chronic depressed rent situation of the older-type mobile home parks. Required capital expenditures, particularly in infrastructure upgrades, must be allowed to be a 100% pass-through of approved costs. And we would like to see the subject of positive discrimination addressed.
In our previous submission to the committee on August 22, 1996, we commented on various other points of the legislation; ie, balanced landlord-tenant protection, fair market rent, rent reduction application, new construction, maintenance, sublets, abandoned property, dispute resolution and For Sale signs. For the sake of brevity, these have not been repeated here, and we urge the committee and staff to revisit our previous submission.
In summary, we feel that manufactured housing developments on land-lease tenure offer an ongoing and increasing opportunity to provide affordable housing for the residents of Ontario. Being unique and distinct from apartment and condominium units, they can best be served by a distinctive land-lease community act. This would be a preferred alternative to being part of the legislation that principally relates to other unit types and tenures. However, we do intend to work with the government on the new Tenant Protection Act and we appreciate the efforts in that regard. But we are anxious to pursue at an appropriate future date a separate act specific to land-lease communities.
I thank you again for your time. I will attempt to answer any questions there are, and if I can't, I can get the answers from our association members and advise the committee at a later date.
The Chair: Thank you, Mr Barker, for your presentation. Members of the committee may have some questions.
Mr Monte Kwinter (Wilson Heights): How much time do we have?
The Chair: We've got about five or six minutes.
Mr Kwinter: Each?
The Chair: Oh, no; we have to share. We share in this committee. You've got a few minutes, Mr Kwinter.
Mr Kwinter: I just wanted to know.
I apologize for not being here at the very start of your presentation. You're right: You do have a unique situation. I think one of the confusions that probably compounds the issue is the reference to mobile homes, the feeling that people pull up with their home on the back of their car, park it for a bit and then take it off again. In fact, these are not mobile once they get there; they are really permanent houses on a park.
I agree with you: It's unique. It doesn't fall under the condominium provisions and it doesn't fall under a conventional rental situation. But how do you deal with the issue of different services provided in different parks so that you legislate it? If you had a minimal standard that every single park had to adhere to, I could see some legislation that would cover it. But in some parks it's minimal; you really are given a spot and minimal services. Others are very sophisticated, with entertainment centres or recreational centres, things of that kind. Have you had any thoughts on that?
Mr Barker: I think your legislation is trying to get at that a bit with these capital costs, upgrades and that sort of thing. Where you have the concern is with the minimal services. That's where the Ministry of Environment has a concern. I'm thinking specifically of sewer and water. If those parks can be upgraded -- we're not asking for any government handouts to do this, any support, any finance, any grants or anything like that. It can be done by the park owners and operators if they have the proper legislative and planning tools to do it.
That is simply to allow those capital costs for the appropriate upgrades, which would have to be overviewed by an engineer, or the appropriate engineering report overviewed by the Ministry of Environment or some agency such as that, and allow the services to be upgraded to a good standard.
That would bring the parks up in standard, not all to the same level because some, as you say, are very sophisticated and the people who live in those parks pay in their rent for those amenities, the big clubhouses and so on. Not everybody needs that, but everybody needs basic sewer and water and everybody needs the park owner-operator to make a decent living and maintain his park, because if he maintains his park, the units in that park increase in value. They retain their value, they increase in value and the people retain the equity in their units. If the parks deteriorate in quality, the people lose their equity in their units; it's not just the park operator who suffers.
Mr Rosario Marchese (Fort York): Mr Barker, at the outset you talked about having an interest in fairness and equity, or fair and equitable treatment of landlords. You're speaking generally here, not just around the issue of mobile homes but as it relates to all landlords. What is fair and equitable, in your view, with respect to landlords and tenants?
Mr Barker: In general principles, the tenant should pay a fair rent for his facilities. In this case, in our situation, the tenant owns his unit and rents the site it is situated on in the park. The landlord should make sufficient from that to maintain the park and make his reasonable profit or living.
Mr Marchese: We have generally about three million tenants in Ontario, 3.2 million, and our worry in terms of the public interest is how to protect the majority of those tenants. We thought we did that with our bill, but obviously this government doesn't agree and you don't agree. Tenants, by and large, came here saying that they had the best protection under our Rent Control Act and that if anything needed to be done, to try to make some changes to that rather than changing it in such a way that the focus shifts the interest to protecting landlords over the tenants, as I see it and as the tenants see it. You don't see it that way.
Mr Barker: I don't see it as protecting the landlord over the tenants. There are many things in the legislation that we accept and are very appreciative of. The For Sale sign question has been resolved and so on, and that's fine. I think we've still got to get to a balance of landlord and tenant protection, particularly in the older parks where there's a concern that the landlords be able to make a fair living.
Mr Steve Gilchrist (Scarborough East): Thank you, Mr Barker, for coming before us today. I appreciate the fact that you folks were also here last summer and made a presentation. I hope we've been able to respond to some of your concerns.
I would just like to seek clarification from you on one point, because while you commented that there is a need for special relief for chronically depressed rent, you then went on to talk about the fact that in many of those parks the issue is minimal services -- sewers and roads and the like. I'm curious to know why the section in the bill that would allow you a no-cap flow-through of any costs ordered by the municipality or the province, which would certainly relate to sewer systems, wouldn't arrive at exactly the same end; namely, the landlord's ability to ensure that services are upgraded with the knowledge that those costs could then be passed along to the tenants.
Mr Barker: I may be out of date. I wasn't aware there was 100% pass-through. Is that what's currently in the legislation?
Mr Gilchrist: For anything ordered by a municipality or any level of government you have a no-cap pass-through. Of course, on any of the other capital improvements -- you mentioned if tenants request any improvements -- the 4% cap would apply to that. We think that's a step forward as well in terms of meeting that test of fair balance between the two.
Mr Barker: I apologize. I didn't realize the 100% pass-through was there.
The Chair: Mr Barker, thank you for coming this morning and making your presentation to the committee.
The next group that is to appear before us is the Tenants Association of 54 Roncesvalles. Are they present this morning? Is there a representative? Could you call in the hall, please? The hall is empty.
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TENANT ADVOCACY GROUP
The Chair: I understand the Tenant Advocacy Group is here and would be prepared to make its presentation now. If there is an opening later in the day, we will try to make it available to the Tenants Association of 54 Roncesvalles. Mr Hale and Ms Marshall of the Tenant Advocacy Group, good morning.
Mr Kenneth Hale: Good Morning. My name is Kenneth Hale, and with me is Kristin Marshall. We're lawyers who work for community legal clinics and we're here on behalf of the Tenant Advocacy Group, which is an organization of lawyers and legal workers who represent tenants in the Metropolitan Toronto area. We appreciate being invited to speak and we hope your invitation to us means you're willing to listen to some of the concerns tenants and tenant advocates have about the legislation as it's presently drafted.
We can't talk about every issue raised by the bill in 20 minutes, but we would like to endorse a number of presentations that we've seen and heard, specifically the Coalition to Save Tenants' Rights, the Federation of Metro Tenants' Associations and the Legal Clinics Housing Issues Committee brief, which is to come.
Like these other groups, we believe it's a mistake to give landlords an immediate financial incentive to get tenants to leave their homes. We believe it's a mistake to take away the powers of municipal governments to control demolition, conversion and renovation of tenant homes. We believe it's a mistake to hand over to the cabinet the power to overrule the conclusions of a human rights board of inquiry on the issue of discrimination in housing, especially when the board hasn't even issued its decision yet. We believe it's a mistake to provide care home operators with an open-ended cause for eviction of their vulnerable tenants, and we believe it's a mistake to end all rent protection for tenants of new buildings.
However, we know other groups have got into detailed criticisms of these major problems with the bill, and I'm sure you'll hear more about it as you travel around the province. We would strongly urge you to listen to what these people are telling you. These are real problems that they're highlighting.
We would like to focus on some of the issues that might be overlooked and share with you some of the legal expertise from our group. We have a detailed written brief which covers a lot more than we're able to summarize in 20 minutes and we hope that at some point you'll look at it when you're reviewing the suggestions for changes to the bill.
I'd like to talk to you about the way the bill treats tenants' privacy, tenants' personal property, problems with unnecessary parking charges and some issues about rent increases. Ms Marshall will speak to you about our concerns about the tribunal.
Our comments are based on our practical experience in using the existing system to address tenant concerns and to resolve disputes between landlords and tenants. Unfortunately, most of the expertise that's in the Ministry of Housing and in the minister's office has to do with rent regulation, and the determination of landlord and tenant disputes, which has always been in the Attorney General's department, seems to have got overlooked in a lot of this. Those are some of the concerns we're bringing here.
First, I'd like to deal with privacy. Under the common law, tenants' right to privacy was absolute during the term of their tenancy. Any rights of entry a landlord or anybody else had were written into the lease and were strictly construed by the courts to protect the privacy of the tenants. Any other entry by the landlord or anybody else was a trespass and was considered to be an offence against the tenant's property and against public order. Of course, back in earlier times, the landlord had no obligations to the tenants which they would have to come on to the property to fulfil, but the law was clear that the landlord's financial interest in a property was secondary to the tenant's privacy.
The Landlord and Tenant Act, as it's presently drafted, recognizes there are emergencies which may require the landlord to enter without notice. It also recognizes that where the landlord has obligations to clean or to repair, there must be a right of entry, on notice, to fulfil those obligations. However, any other right of entry may only be on notice and must be spelled out in a tenancy agreement.
Bill 96 proposes to sweep this protection away and authorize invasions of the tenant's privacy whether or not the tenant agrees. In fact, the bill would prohibit tenants from making agreements to prevent such intrusions. The bill does not limit intrusions to entry by the landlord. It permits entry by prospective tenants without notice, and potential mortgagees, insurers and purchasers; that is, pretty well anyone the landlord wants to bring in. Even the existing restriction against entry after dark has been lifted.
We think the need for families to have a safe haven from the outside world is treated in this bill as if it were secondary to the whims of investors or potential investors. We think common decency and respect for people's families and families' privacy means this section should be voted down.
As well, section 23 permits the landlord to change the locks of the tenant's door at any time as long as they give the tenant a replacement key. If the tenant was to change the locks and give the landlord a key, they could face a fine of up to $10,000. We think the tenants deserve a reciprocal right to protect themselves.
On the issue of tenants' personal property, we'd just like to remind the committee that for the vast majority of tenants being a tenant is not a choice of lifestyle. Tenants rent their homes because they can't afford to own their homes. Whether this is a temporary situation or a permanent situation differs among tenants, but for a lot of tenants the only things they actually own are their furniture, their clothes, their books, their papers, their keepsakes. Traditionally, the obligations of landlords to protect this property are very stringent. While we would admit that the rules about how property should be cared for when the tenant leaves the apartment haven't been all that clear, until Bill 96 the rules have recognized that there's a vital importance this property be dealt with fairly.
When we had the discussion paper issued by the minister, he proposed to clarify the landlord's obligations, suggesting the landlord would apply to the tribunal, and upon being granted possession of the premises, the landlord would be entitled to throw out the tenant's property after 30 days. The bill follows this suggestion, adding the right to immediately dispose of any unsafe or unhygienic items.
I guess we don't really have any big quarrel with that, but unfortunately the bill doesn't stop there. The landlord doesn't have to follow the rules if property is left behind by tenants who move out because of a notice, because of an agreement or because of a tribunal order. Their property can immediately be kept, sold or thrown out by the landlord and the landlord isn't liable to anyone for doing so. If the tenant dies, their property can be kept, sold or thrown out on the 31st day after their death and the landlord doesn't need any authority from the tribunal. Where the property is a mobile home, the landlord has duties to try to reach the tenant and must wait for 60 days before seizing, selling or disposing of the mobile home.
In our view, these provisions legalize the theft of a tenant's personal property by unscrupulous landlords. They take away any civil or criminal remedies that the victims of such thefts have now. When you combine this with speedier evictions, less affordable housing and more and more problems with access to emergency shelter, they are cruel and unnecessary treatment of people who have lost their homes. We're not saying that honest business people will take advantage of this immunity, but crooked and corrupt people will find new sources of revenue by stealing the property of people they evict.
There should be no seizure, sale or disposal of the tenant's property, unless it's unsafe or unhygienic, without an order of the tribunal. Any net proceeds of a proper sale should be paid to the tribunal, where the tenant or the owner of the property that was seized can claim it within a year. These were the kind of principles that were adopted by the Legislature in the Residential Tenancies Act, 1979, and they provide a minimum recognition that the tenant has property rights in personal goods. We urge you to recommend that those kind of provisions be included in Bill 96.
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I'd like to speak very briefly about parking charges. Since landlords now have lots of new opportunities to increase their revenue, it seems only fair that a Tenant Protection Act should offer some relief to tenants who are suffering from unfair charges.
The most common of these and the one that's the easiest to remedy, is the mandatory parking charge. Tenants who don't have cars and who never will have cars are, in many cases, required to pay a charge for parking each month, $30 or $40. These charges seem to be most often applied to older women who are living alone on modest incomes. Often this charge started as a condition of signing the initial lease or perhaps they or their husbands had a car when the apartment was rented many years ago, but landlords and the rent control office refused to remove these charges when the tenant requested them without the landlord's consent. We're asking that you add a section to the bill which would allow tenants to terminate their agreements to rent parking spaces on 60 days' notice.
Dealing with a couple of the rent issues, the way the law is presently written, the Rent Control Act recognizes that there may be circumstances where landlords and tenants would agree to a rent increase above what would otherwise be permitted because the landlord is doing some work on the property or providing a new service to the tenant. The law controls abuse of this by requiring landlords to get approval from a rent control officer before they actually charge the rent increase.
There haven't been that many of these applications and we're not aware of any abuse of these applications. However, for some unknown reason, Bill 96 proposes that the requirement of this approval by the tribunal be dispensed with and it be replaced with a five-day cooling-off period. We don't think this change is necessary or well advised. Because there is a major shift here in the balance of rights between landlords and tenants, our concern about tenants being pressured into signing agreements for increased rents without receiving anything of increased value is stronger than it ever was unless there's a review by the tribunal of these agreements. The committee should have some faith that the tribunal is going to be fair in its treatment of people instead of taking away this jurisdiction that they already have before they've even had a chance to set up their operation.
The final thing I'd like to talk about is orders prohibiting rent increases. One of the other changes that Bill 96 proposes, which doesn't seem to have a rational explanation, is the proposal that landlords should be allowed to continue to raise the rents of sitting tenants while the landlord ignores municipal work orders to comply with minimum maintenance standards. This works against all the changes that you're putting into the Building Code Act in section 212. Landlords whose buildings have outstanding orders against them do not deserve to increase the revenue at the expense of their tenants and to allow them to do so undermines the credibility of the whole system. As well, tenants whose rents are going up while their homes are falling apart are more likely to come to the tribunal with their complaints, adding to a workload that already looks quite frightening.
We've tried to get an explanation from the minister's office and from the ministry staff about why this change was made but we've never received an answer and we don't really think there is an answer. So we ask that the committee recommend that the bill be changed to continue the orders prohibiting rent increases as a consequence for the landlord failing to comply with a building code order.
I would like to turn it over to Ms Marshall to speak about the tribunal.
Ms Kristin Marshall: We have serious concerns about the proposal to shift the landlord and tenant matters from a court to a tribunal. Bill 96 provides little insight into how the tribunal will be set up. What insight it does provide points to an unbalanced system which favours landlords and takes away many of the protections formerly available to tenants. Since the members of the tribunal will have very important decision-making functions, it is essential that they be hired on merit and experience rather than on political connections. The appointments should be for fixed terms to guard against political interference once they're appointed.
As for procedure, there are a number of ways in which Bill 96 puts fewer procedural requirements on landlords at the expense of fairness to tenants.
First, landlord notices to terminate only have to set out reasons for termination. They do not have to give details or any particulars. Also, the warning to the tenant is inadequate. It should tell the tenant that he or she doesn't have to vacate pursuant to this notice. In our experience, notices to terminate have often been misunderstood by tenants and new legislation should ensure that these notices are as clear as possible.
Second, landlord applications to evict tenants without notice: Applications made without notice to the tenant are inherently unfair. When as fundamental a right as the right to one's housing is at stake, there should be more procedural safeguards in place to protect tenants. No application for eviction should be granted unless the tenant has had notice of the application. A landlord should only be able to rely on an agreement to terminate or evict a tenant if it is in writing. In this type of application, Bill 96 allows a landlord to produce merely an affidavit about the alleged agreement. This is open to abuse by unscrupulous landlords. In order to be fair, a copy of this notice or agreement should be filed with the tribunal so that it can then decide if the eviction request is proper.
Another huge imbalance that appears in several sections of the bill is the one-year limitation period imposed on tenant applications as compared with the existing six-year limitation which will still be available to landlords.
In addition to making procedures easier for landlords, the unfairness of Bill 96 is made worse by the additional burdens it imposes on tenants. First, the requirement that the tribunal consider whether tenants have advised their landlord of disrepair before they seek an order is another burden. Most tenants do inform their landlords of disrepair, often repeatedly, but requiring them to prove that they have done this not only goes against existing case law but it could unjustly deny them remedy.
Tenants can apply for reductions in rent where there has been a decrease in services. Under Bill 96 they must do so individually. The reg is not that effective unless the parties can be automatically added to applications which will affect all tenants in a building. Making separate applications imposes more burden on tenants and will also clog up the tribunal system.
Tenants will now be required to file a written dispute to a landlord's application. They can no longer appear before an official to say that they dispute. Written disputes will create an obvious impediment for tenants with limited language skills. Furthermore, it's grossly unrealistic to believe that tenants will have the time to get advice and respond to a dispute in writing within the proposed five-day time period. We feel this should be at least 20 days.
There are two other areas of imbalance in Bill 96 which result in windfalls to landlords and even less protection for tenants. Landlords are permitted at any time to give a tenant a catch-up rent increase to the maximum rent level as specified by the rent registry. How can it be called fair where landlords can take advantage of the maximum rent concept under the rent control system while the protections that maximum rents and the rent registry system gave to tenants are being abolished?
The second windfall is section 131, which grants an amnesty to landlords who have been charging illegal rents. Tenants have only six months after the bill has been in force to make an application against illegal rent even if they've been paying too much rent for years.
Concerning the tribunal, its efficiency does not have to come at the expense of fairness. It is possible to ensure proper protection for tenants without imposing an undue burden on landlords or even the tribunal. First, one modest addition to the bill is quite simply that landlords be required to provide tenants with rent receipts. In our experience, such a provision could reduce the overall number of disputes and applications to the tribunal and would offer protection to both landlords and tenants.
Bill 96 requires landlords to pay interest on rent deposits. However, there is no mechanism for tenants to enforce this right. Rather than an amendment which could generate hundreds of tenant applications at the tribunal, tenants should be permitted to deduct the interest from their rent. Making this right of setoff explicit would provide a remedy for the right already given and it would not burden the system.
Concerning service of documents, the tribunal can't operate properly if parties don't know there's a proceeding going on. We suggest that the tribunal should serve notice of application on all parties.
The tribunal is allowed to make default orders against a person who doesn't show up. Even if the tribunal delivers the originating document, there is no guarantee that the person has had notice of the proceeding. It's wrong to assume that parties who don't respond do not deserve any legal protections.
Our first concern about default orders is that the tribunal is not required to assess whether there is any merit to an application or a money claim. A default order should not just be made outright without the tribunal's scrutiny using its supervisory jurisdiction.
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Our second concern about default orders is that neither the tribunal nor the landlord has to notify the tenant, and this is kind of a basic procedural fairness that shouldn't be ignored. Tenants also need to be notified to apply to set them aside, and there should be provision to extend time in appropriate cases.
Briefly, there are three areas of tribunal powers which we think are vague and overly broad or ill defined. The power to mediate a settlement has to acknowledge the unequal bargaining power between the parties. The power to refuse to hear evidence in submissions, if money hasn't been put into it, has to be limited to reflect the current circumstance of the law today. The power to establish rules and guidelines is so vast that it has to have input from both sides to make sure it will run smoothly and operate fairly, and the cost-awarding authority has to be limited to merely frivolous and vexatious proceedings so it won't intimidate the general public from using the system.
The Chair: Thank you very much. I regret that we've run out of time. I'm sure you had a few more words to say and I know there are questions, but we've simply run out of time. Thank you, Ms Marshall and Mr Hill, for coming this morning.
Is the Tenants Association of 54 Roncesvalles here? They were to appear at 10:20.
ONTARIO NON-PROFIT HOUSING ASSOCIATION
The Chair: I believe the Ontario Non-Profit Housing Association is present, Mr Joseph Debono and Ms Kathleen Blinkhorn. Thank you very much for coming. Please commence your presentation.
Ms Kathleen Blinkhorn: My name is Kathleen Blinkhorn. I'm a policy analyst with the Ontario Non-Profit Housing Association. Mr Joseph Debono is here with me. He's a solicitor for the law firm of Fraser and Beatty, and he has assisted us in putting together our submission to you.
I first want to take a couple of minutes and explain who we are and who we represent. We're a non-profit-sector organization. We represent over 325 non-profit and municipal non-profit housing providers in Ontario. The majority of our members are one-off providers, that is, about 70% of our membership represents one building in one small community or even, in Metro Toronto, with less than 100 units. About 30% to 40% of our members are supportive housing providers. They're either dedicated, where they have a group home that provides specific services to people with special needs, or it's integrated within a regular apartment building within the non-profit or municipal non-profit portfolio.
We originally looked at this legislation -- I shouldn't say the legislation that came out in November, but prior to that, a year ago last spring, we took a very extensive consultation of our supportive housing members across the province. We visited and spoke with 148 supportive housing providers throughout Ontario to get their concerns with the present legislation, specifically the Residents' Rights Act and how it was affecting the operation of their building. At that point last June we submitted a paper to this committee, which is attached to the paper we submitted to you today. When we reviewed the legislation that came out in November, we felt that some of our concerns were addressed in the proposed legislation, but we still have additional concerns that we'd like to discuss with you today.
I just want to highlight that our supportive housing providers cross the gamut, and I think ONPHA is unique in that way. Our members house people with physical disabilities, people with developmental disabilities, victims of family violence, people with AIDS, people with mental health issues, street youth, homeless people; as I indicated earlier, all within either a dedicated or integrated building within the community.
In many of the recommendations we have brought forth, we tried very hard to balance the rights between the tenants and the owners we represent as a non-profit organization. But I guess we're also unique in the way that many of our members -- I would say most of our members -- are very strongly committed to the tenant populations they house. Therefore, in looking at this legislation, we wanted to ensure that the rights of the tenants were not jeopardized in any way with the recommendations we were bringing forward.
I'm not sure, but I hope you'll have an opportunity to look at our report. We've come forward with 53 recommendations. Many of them are detailed. With the assistance of Mr Debono, we took the present legislation, compared it to the proposed legislation and tried to really fine-tune some of the areas that we felt needed further clarity, both for tenants and for providers.
I'm not going to go through each one of those recommendations today, but what I'd like to do is highlight some of the areas I think you need to hear. I also had the opportunity over the weekend to read all the deputations that were done here in Toronto. Some of them were done by our members, so I don't want to repeat some of the things they already brought forward. I think you probably remember Jessie's Centre for Teenagers, Woodgreen, the Supportive Housing Coalition; those are all members of our organization. Also the Metropolitan Toronto Housing Authority, Cityhome; those again are members of our organization.
We have great concern with the repeal of the Rent Control Act and the Rental Housing Protection Act. We know there's no new supply program on the horizon for social housing and there's a real concern with the waiting list our members presently have for people who need housing that is decent, safe, secure and affordable. Therefore, our concern comes from the fact that with the repeal of those two acts and the amalgamation of some of the requirements of that legislation in the Tenant Protection Act, there will not be a supply of affordable housing through the private stock as there presently is. We also know -- and FRPO has come out publicly and said this -- that many of the people that our members, especially the supportive housing groups, house within their housing are not traditionally housed in the private sector.
So I'm not here to talk about the need for a new supply program, even though I would like to, but the fact that with the repeal of those two pieces of legislation and the fact that rents can go up higher, there is a problem with affordability in the future, and I think you've heard that from other people.
In addition to that, as the proposed legislation deals with what we consider social or not-for-profit housing, we have concerns with the conversion items, articles within that. The way it's presently drafted, our members are under an operating agreement with either the province or the federal government, so they cannot convert because of that agreement. With devolution to the municipal government on the horizon, we have a concern that there would be an opportunity to convert some of those non-profit housing projects to private or other kinds of ownership models.
While we don't feel that should be totally restricted, because we feel that there would be opportunities for our members and for the municipalities to look at that stock, we do feel that there should be some additional regulations put on the not-for-profit housing stock. Recommendation 53 in our report deals with wording we're proposing regarding that, that if in the future any of the non-profit stock, whether it be our members, whether it be the non-profit co-op stock or the Ontario Housing Corp stock, is up for conversion, there would be a higher body that would look at that, whether it be the Ontario Rental Housing Tribunal, the Ontario Municipal Board or some body within the community that would have to look at the overall picture of the community to see whether that would be the best for that specific community.
We also are proposing, given that, that certain sections in section 5.1 of the proposed legislation be amended to reflect that if in the future those kinds of things happen, the tenants living in those buildings would have the same rights as the tenants living in private ownership projects.
The other area I'd just to like to highlight is care homes. As I indicated to you earlier, a very large percentage of our members are what you would consider care homes within this legislation, and we have had a special section of the report to deal with that. I don't know whether you've heard this in other parts in the province, but one area that didn't seem to be covered in the previous deputations was a concern around shared or congregate living situations. Many of our providers, those that have group homes, those that deal with housing the homeless, they live in a group setting. They share a common bathroom, a common living room. There may be three people, four people, there may be eight or 10 people. There are real concerns with that group around shared living accommodations and some of the issues that they face.
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Just to highlight a few of them, visitors are a real concern, especially if you're looking at second-stage housing or victims of family violence in a shared situation, who is coming in and visiting. While under the present legislation, and also under the proposed legislation, the landlord would not have the right to restrict the visitors, what we're proposing in those cases, with agreement with the tenant that the landlord does not have the ultimate right to say who comes to visit that person, is that they can restrict certain visitors. It's also been a problem for people who are dealing with the homeless population. Maybe some of those people are going through some kind of treatment program. If they have visitors coming in who are maybe not going through that same program and needing to indulge in certain things that another member of the household may be trying to not indulge in, it makes it very difficult for them.
Another area is pets. I'm not going to spend a lot of time on pets because pets is an issue in rental accommodation. What we're proposing in shared accommodation and in supportive housing accommodation is that the landlord has the right to restrict certain pets in those areas because of the fact that they're sharing a unit with a number of other people. Under the legislation, your bedroom is your rental unit even though you share common areas -- bathrooms, kitchen areas and so on.
Another area we want to look at, and it was very difficult for us to come forward with a position that we felt all of our members were satisfied with without jeopardizing the rights of tenants, is that we're proposing an interim removal process for tenants only in situations of violent behaviour. It's outlined in quite a bit of detail both in our submission that we submitted to this committee last June and also in the submission that we propose to you here today.
It has been brought forward by our members that in shared living accommodation or even in self-contained units where there's a very high concentration of people with special needs, violence is an area that often affects many of the people sharing the unit within the building itself and also the community at large. We are looking very much at what the Lightman report recommended a few years ago, which was a fast-track eviction process. We understand that under the proposed legislation you're looking at not legislating a fast-track system but through an administration process giving priority to that system.
We're actually proposing a process of interim removal. Why we feel we can do this with good heart and protecting both tenants and the landlords is that part of our proposal is that the landlord would have the responsibility under this to keep the unit vacant. We're asking that a violent person be removed fairly immediately, within a day or so, going through a quick process. The landlord is then responsible for keeping the unit vacant during that period and if, after the tenant goes through a tribunal process and it's not weighed on the landlord's side, then the tenant has a right to go back to that unit and the landlord has to pay for any over-and-above costs associated with the relocation of that tenant during that period prior to them going to the tribunal. We feel that landlords will not take advantage of this system, this interim removal, unless it's a very special case of violence and they feel that the safety of not only staff but other tenants in the building is in jeopardy.
In closing -- and I'm certainly available for questions too -- we have real concern with the fact that, as previous speakers have indicated, there's not a lot of detail in the proposed legislation of exactly how the tribunal is going to work. We understand that this government felt a need to take this process out of the court system and put it into a separate system. However, we have concern on behalf of our members that the time it's going to take to go through that process may be as long, if not longer, than the present system. Our providers are committed to keeping people housed, but unfortunately they often have to use the court system in order to enforce that or to get people out of their building whom they just cannot deal with.
The time that's associated with how you go through that process, the cost from a staff standpoint, when dollars are being cut on a yearly basis for our providers for the administrative cost -- they don't have the extra dollars to hire independent advocates to advocate on their behalf. We feel it's very important in this legislation that the regulations and the rules and principles under which the tribunal is established, the process from the time a person walks into the office until they walk out after a tribunal hearing takes place, are very clear and concise, they're in plain English and they're user-friendly.
I understand that some other deputants had concerns with it being taken out of the court system and put into another form of system. In fact, we feel that if done correctly it could be a friendlier way to deal with it, for both the tenants and the landlords. But we have real concern with the process, whether it will be overbureaucratized, and the time frame associated from the time a person walks in until they actually get a hearing date.
Other than that, as I said, our report deals with quite a few other recommendations. Those are the highlights: the concern with affordable housing stock, with the repeal of the Rent Control Act and the Rental Housing Protection Act; that you look at special considerations around shared living accommodations because that is unique and it is very much part of some of our supportive housing members' portfolio; that you look at an interim removal process for violent behaviour only and the effects that could have in removing someone immediately but still going through a process where they have all of the rights under the tribunal as if they went through the regular process; and finally, that in your decisions around the legislation you are very clear and concise to the people drafting the regulations and that it's done in a very simple and friendly way for both the tenants and the landlords. I don't know whether Mr Debono has anything else to add.
Mr Joseph Debono: Given the time, I think perhaps we'll open it up to questions, assuming there is time.
The Chair: We're pretty stuck for time. I'm going to allow one question from the NDP caucus, and we'll catch up with the others another time. We're out of time.
Mr Marchese: I'll just ask one question around orders prohibiting rent increases, because you didn't touch on that. My sense is they're not likely to change very much. This is one area that many tenants feel we need to maintain, simply because when you have work orders in place and the landlord isn't doing that, the order prohibiting rent increases was a very useful tool for tenants. What is your suggestion or view with respect to that?
Mr Debono: Unfortunately, under the current statutory regime, under the Rent Control Act, the members of the Ontario Non-Profit Housing Association wouldn't be subject to those provisions. It's not really something we've canvassed with the membership, so I don't know that we're in a position to make any comment on that.
Ms Blinkhorn: As a not-for-profit organization, our members are exempt from certain portions of the legislation that presently exists.
Mr Marchese: We have no more time?
The Chair: One brief one, Mr Marchese.
Mr Marchese: The government speaks about balance and protecting tenants. This bill will improve maintenance, it builds a climate for investment and so on. What is your sense of this bill? Does it achieve the balance that they're talking about?
Ms Blinkhorn: If you want to look at it as to whether it's going to stimulate the growth of new rental, I don't believe it will. It cannot do it singly; it needs to have other things enacted: tax credits, looking at some of the service and impost charges associated with development, more incentives for developers to come forward. If we look at what happened in British Columbia with the removal of the Rent Control Act, it did not stimulate the development of new housing.
We looked at it very much from an equity standpoint on behalf of our members who are landlords, but also the tenants who live in the buildings. Our recommendations in the report tried to address that balance. That's why we have said very clearly, with the help of Mr Debono -- he literally went through the present legislation and the proposed legislation and tried to bring forward recommendations that would make that equitable, a better balance on behalf of our members.
The Chair: Thank you, Ms Blinkhorn and Mr Debono, for coming this morning and making your presentation to us.
We had a 10:20 delegation, the Tenants Association of 54 Roncesvalles. Are they here? By chance, would the 11:20 delegation, the Metropolitan Toronto Apartment Builders Association, be present?
I do know that Mr François Rouleau is present.
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FRANÇOIS ROULEAU
The Chair: Mr Rouleau, thank you for coming.
Dr François Rouleau: My name is Dr François Rouleau. I hold a PhD in astronomy from the University of Toronto and had some post-doctoral research experience in Europe.
Since returning to Canada a year ago, I have been working full-time as a volunteer to expose and to fight the destructive agenda pushed by the Harris government and its corporate backers. My only affiliations are with Riverdale Against the Cuts, a citizens' group also exposing and fighting the Harris agenda, and Citizens for Local Democracy, the citizens' group fighting the megacity and attempting to salvage some local democracy.
I am also a tenant living in St James Town, the most densely populated area in Canada. As a tenant, I will be directly affected by Bill 96, the bill with the Orwellian name of Tenant Protection Act.
In this deputation I wish to express my gravest concerns that democracy is dying in Toronto, in Ontario and throughout Canada. This attack on democracy by the corporate and financial élite is being mainly carried out by its most zealous lapdog: the Harris government.
Before addressing Bill 96 specifically, I want to show that the Harris government shares many features with religious cults and Fascistic regimes. I want to expose the rhetorical devices, the propaganda, the lies and the sheer mega-chutzpah used by this government, particularly the Minister of Municipal Affairs and Housing, Al Leach, to mislead and manipulate key segments of society to push a corporate agenda that will make Canada look increasingly like a Third World country. This agenda has been allowed to be pushed ahead thanks to the complicity of the corporate-owned media.
The Harris government has been accused of being dictatorial by its own backbenchers in the context of its show of utter contempt for democracy, due process and meaningful public consultation. These were exemplified in the way it handled the proposal and passage of Bill 103, the megacity bill. The Speaker of the House found Al Leach and the Harris government in contempt of the Legislature for putting out a propaganda pamphlet making mincemeat of due process. The will of 76% of the population who said they did not want the megacity in one of the clearest possible ways of expressing itself -- referendums -- was ignored.
In the recent legal challenge to Bill 103 in the lower court, Judge Stephen Borins also lashed out at the imperiousness of the Harris government's handling of the public consultation regarding Bill 103. His decision that the process was nevertheless legal unfortunately clearly shows the élite view of democracy as being little more than what common mortals would call elected dictatorship.
The proposed changes to the standing orders recently introduced by the Harris government, fortunately delayed, at least temporarily, are another example. With these, the Harris government could ram through legislation without the public even knowing about it by sitting during evenings and even nights and limiting questioning by the opposition and the public.
When Slobodan Milosevic in Serbia rammed through legislation at 7 in the morning without even the presence of the opposition, there were howls of protest in the media on this side of the Atlantic. Now that the Harris government is taking the same path right here in Ontario, the media are cheerleading the government's actions, spinning them to make them look so reasonable, but the same dictatorial process is at work right here, right now, with the complicity of the media.
Another example is in Alberta, where Premier Ralph Klein wants to eliminate the fall session of the Legislature altogether, sitting only 34 days a year; all that because, in his own version of the end of history, the government has become so small and efficient that it doesn't need to waste all that time any more. That's what happens when you downsize government: You also downsize democracy in the process, because it's too costly, slow and expensive. A dictatorship at least makes the trains run on time.
The Harris government is also impervious to either logic or evidence. This is typical of cults; they have fancy ideological constructions that are based on ludicrous premises. You cannot argue logically with cult members because they are so wrapped up in their own ideology that they cannot accept any evidence that is contrary to their core beliefs. Here we have what could be called economic fundamentalism: the belief in the perfection of the free market, that anything can be reduced to market forces -- no place for equity or compassion here.
This overarching binding myth is analogous to that of the Aryan race under Nazi Germany or the symbolic grandeur of ancient Rome in Mussolini's Italy. In this neo-Fascist framework, the intrusive role of the state is replaced by the global economy. Nothing and no one can escape it. There is no alternative. You have to accept it or fall behind, as if a government destroying any signs of equity, humanity or compassion in its path -- like in Ontario -- were progress.
Over and over again studies have contradicted the claim that income tax cuts stimulate consumption. I note in passing that a consumption tax cut has never even been discussed. It only makes well-off people richer but doesn't do anything for those at the bottom of the economic ladder. But Al Leach and the Harris government don't give a hoot about those people.
Studies have never recommended a megacity, yet that's exactly what this government is ramming through, against the will of the people. The argument about saving money through amalgamation has been repeatedly shown to be without foundation. Anne Golden and, most recently, Peter Tomlinson, the senior city of Toronto number cruncher, make that point abundantly clear in their respective studies. Property taxes are expected to go up even more due to downloading and a thinly disguised market value assessment property tax. I for one will pay dearly for these, as 40% of rent is due to property taxes and Bill 96 allows increases beyond the guidelines when property taxes go up.
Not only is the government's propaganda on Bill 96 pervading mainstream newspapers, but it has managed to find its way into community newspapers, namely, this summer's issue of the Toronto Voice. In a letter to the editor, Al Leach, no less, spews out his usual fantasy-world rosy picture about "listening to the people," making a "faster, fairer, less costly system of rent control" and stimulating building of new rental units by the private sector.
Al Leach introduced the idea of removing rent control when a tenant moves out knowing full well that this would amount to a de facto total removal of rent control within a few years because 20% of tenants change apartments each year, according to Michael Walker. Students would be hit even faster by this measure since they move more often.
Under questioning last fall, Greg Lampert, author of a report on encouraging investment in new rental housing, criticized the government for moving on rent control reform alone rather than looking at a comprehensive, affordable housing strategy. He expressed scepticism at the prospect of building new private apartment stock at the lower end of the market using the government's proposal. Leach asserts that there is no evidence to support any claim that rents would skyrocket under this new system, yet that is precisely the conclusion reached in a report by John Todd on the impact of rent decontrol. He predicted that scrapping rent control would result in rent increases for lower-priced units and little or no increase for high-priced ones. In Harrisville, the poor always pay, while the rich reap the benefits. The report also pointed out that rent decontrol in Vancouver in the 1980s led to skyrocketing rents but did not result in the predicted increase in construction of new rental accommodation.
The claim that partial removal of rent control would lead to more private construction of rental units is ludicrous in view of the recent statistics. In the early 1990s, when interest rates were extremely high, many more rental units -- 278 in 1992 -- were built than last year, with only 37, when interest rates were the lowest in decades. If low interest rates do not stimulate the building of new rental units by the private sector, how could Leach's Orwellian rent control ever pull it off? Also, the claim by Leach that "about 50% of the rental units in Ontario are rented below what the landlord could legally charge," meaning that many rents are determined by what the market can bear, speaks volumes about the fact that he doesn't care whether low-income people can afford an apartment or not, as if housing is a luxury good that people can do without.
By focusing on broad statistics rather than focusing on the most vulnerable segment of society, Leach misled people into believing that everything will be all right: "Trust me." He gushes about the current increasing vacancy rate in Toronto, forgetting about the current explosion in homeless people, as if there were no connection between the drastic welfare cuts introduced by the Harris government and homelessness in Toronto.
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Under the provisions of Bill 96, particularly section 200, amending the Ontario Human Rights Code to include income information, many people will be discriminated against, according to human rights chief commissioner Keith Norton. Using income information in housing usually means that if a prospective tenant would pay more than 30% of his or her income on a rental unit, the landlord would have the right to refuse that prospective tenant. If Bill 96 had been law when I came back from Europe with no income, though significant savings, I could have been refused housing anywhere. I am writing a book at the moment, not earning anything and still living off my savings. Does that mean that housing should be beyond my reach if I were to move?
People know what they can afford in terms of rent, and such arbitrary and discriminatory criteria should not be used in any civilized, democratic country. I thus join my voice with those of Keith Norton and countless others in demanding that income information be deleted from sections 36 and 200 of Bill 96.
I also demand that full rent control be reinstated in the bill. I am particularly alarmed by the section on condominium conversion, section 52, particularly subsections (4) and (5). I may have a right of first refusal to buy my apartment, suddenly converted into a condo without the proper warning -- 72 hours' notice can hardly be called reasonable -- but I but I would prefer to simply have a right of refusal to have my apartment converted into a condo without my consent in the first place. Again, the right of the landlord is given precedence over that of so-called protected tenants. Anyway, how could this measure possibly lead to the construction of more rental units? It looks like just one more freebie thrown at developers.
The housing tribunal is also a cause for concern. Section 148(1) says the tribunal consists of cabinet appointees. Well, guess who are likely be the government's appointees? Judging by appointees on the Health Services Restructuring Commission, the transition team and the financial advisory board, these are unlikely to be particularly tenant-friendly.
Furthermore, as in Bill 104, section 183 states: "Except where this act provides otherwise, an order of the tribunal is final, binding and not subject to review." That's in section 183. The only recourse for appeal is through the Divisional Court, but only on a question of law, which is stated in section 184(1). More dictatorial powers exercised by Tory appointees: These features of the bills, as in so many other bills, including Bill 136, do not bode well for democracy, fairness and due process in Ontario and just underscore my point that we are drifting toward an authoritarian corpocracy.
The Chair: Mr Rouleau, we've got about a minute to two minutes left. I am going to allow the government caucus to respond or to ask questions.
Mr Gilchrist: Mr Rouleau, I am quite flabbergasted at your presentation. I think it ranks right up there with some of the most hateful stuff we've heard in this building. I must say it's intriguing that someone could sit here, able to make a presentation, and at the same time start with the premise that they don't believe there's democracy in Ontario. Such a pathetic attack, at the same time contradicted by your mere presence here. To suggest that this government is in any way, in its practices, analogous to Hitler's Germany I think is absolutely below any reasonable standard of commentary in this building. It is contemptible, sir.
The Chair: Mr Rouleau, we've still got a minute.
Dr Rouleau: I think he has just sunk himself. It proves my point.
The Chair: Thank you very much, sir, for coming, particularly for speaking ahead of the other groups.
METROPOLITAN TORONTO APARTMENT BUILDERS ASSOCIATION
The Chair: Is the Metropolitan Toronto Apartment Builders Association present? Mr Richard Lyall, thank you for coming.
Mr Richard Lyall: Good morning, and thanks for the opportunity to appear before you on behalf of the MTABA. I am Richard Lyall, the general manager of the association.
The companies I represent are the leading builders of all forms of multi-family housing in Ontario, including condos, non-profits -- although not many of those are built now, of course -- and co-ops. The association is involved in all issues related to the actual process of building. We have made many presentations on housing policies, including rental, and have been a founding participant in the Rental Housing Supply Alliance, other members of which have already made presentations to you, including the Ontario Home Builders, the Urban Development Institute and the Fair Rental Policy Organization.
As you will recall, the alliance was formed in response to the present government's inquiry on how to get the private sector back into supplying rental housing.
Rather than repeat points raised by other associations, I would like to touch on a few thoughts concerning new rental housing in a big-picture context. We believe that Bill 96 or, as I shall refer to it in this presentation, the Tenant Protection Act or the TPA, must be considered within the bigger picture and not in isolation. In doing so, I will not address the serious challenge with respect to the massive amount of renovation work needed on existing buildings.
Our association was originally established during the boom of purpose-built rental housing in the late 1960s and early 1970s, when thousands of units were built every year. For example, in the peak year of 1972, 39,000 units were built when the vacancy rate was higher than it currently stands. Many of the buildings were not considered aesthetically appealing, but they were, and remain to this day, fully occupied, and most of the tenants are happy to have them. Unfortunately, new units have not been built to add to that stock for some time.
There is a reason why the industry used to build thousands of units and now builds nothing. There is a reason why Toronto is the only major metropolitan area in North America that lacks new rental construction. It has nothing to do with the industry's ability to build and everything to do with government policies at all levels. After all, our industry is recognized as a leader in North America, with many Toronto builders and suppliers active in the US, a fact, sadly and not without precedents, which has not been recognized at home.
The reason is that progressive layers of government intervention, for one reason or another and without due consideration given to their collective impact, have completely killed investment in a once healthy industry. How? For one, by making it virtually impossible to forecast a stable return, much less a return at all; second, by effectively causing production costs to increase to a point beyond the reach of the market. The process can be described as insidious, possibly not by design, but certainly in effect.
Where does TPA fit into this equation? The TPA is one part of a solution to a problem which the Toronto Star succinctly described in an editorial as "A Housing Crisis by Policy Design," and I have attached a copy of that for your interest. While we disagree with the Star's conclusion that the answer is to go back to social housing, it does provide a historical perspective which is frequently lacking in reports on this issue.
The social housing solution has not worked in the past. Why do we say this? If there is one lesson that the world has learned in the last 10 years, or maybe beyond that, it is that government's direct intervention in industry generally typically results in failure. Direct government intervention in markets typically has unforeseen consequences such as is the case in housing.
For example, in killing rental housing, government created a major social housing problem out of a minor one. I would argue it helped fuel the condo boom in the 1990s which ended in a crash. Why? Because no rentals were built other than condos on spec, which were rented at high rates.
It progressively became an accepted truth that the industry was not interested or the market simply did not work. Over the years people forgot to ask why the industry was not interested. A recent letter to the editor which I wrote deals with this particular issue and is attached for your interest.
By the way, we are not suggesting government has no role to play. The government has a clear role in setting housing standards and rules for building and dealing with very specific housing needs for the physically or mentally challenged, but not in direct involvement in production or supply and the pricing of products. That is why our association has never recommended the outright elimination of a rent regulatory system. Tenants have rights and a right to some protection.
The question is, to what extent and at what cost? Can you imagine what would happen to automobile supply if the government intervened in that industry to the same degree it has done in housing? Can you imagine what would happen if government dictated what price cars could be sold for or became involved in design and production? Housing is just as complicated an industry, if not more so. It would result in unmitigated disaster.
The government's ability to respond to new demand is inadequate at best. A useful example is to consider the amount of work which has been put into the Regent Park renovation initiative, to create what? One hundred new units. It's a drop in the bucket. Toronto could absorb 10,000 new units a year in the core, where they are needed -- a fact which has been recognized by Metropolitan Toronto. I've attached another article for your interest on that. Another example is the Ataratiri lands, a government brainchild turned into a nightmare. The taxpayer picked up the tab because the government took a risk of a kind which should only be taken by industry.
In terms of the big picture, the Tenant Protection Act is one step in dealing with one of the last bastions of government's direct involvement in industry. Incidentally, the industry is not alone in this view; every major newspaper in the province has recognized that changes to the rent regulatory system are required.
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However, the problem is difficult to fix because the rental regulatory regime is entrenched in the bureaucracy and the issue has electoral significance. We know that a bureaucracy, once created, is twice as hard to dismantle. The policy analysts who track why housing policies work or don't are the same people who design social housing programs. The one thing they unfortunately share in common, almost without exception, is a lack of industry experience.
In any event, the TPA does not dismantle the system but streamlines it somewhat, which should allow for badly needed renovation investment and general improvements while providing significant tenant protection.
No, the TPA by itself will not itself result in new construction of purpose-built rental housing. No one ever said it would. However, it is a necessary step in its resurrection. The other steps needed are fair property tax changes, equitable GST treatment, the removal of excessive or discriminatory development charges and other regulatory measures which do nothing other than slow the ability of the industry to build. To oppose the TPA on the grounds that it alone will not result in new rental housing is just simply playing politics and ignoring the bigger issue concerning the economics of housing supply and renovation.
If we have one complaint, it is this: The rental housing solution writ large is not being brought in quickly enough. The issue is still being used as a political football, which is ironic given that all levels of government and all parties decry the lack of affordable rental housing supply. For example, the Liberal leader recently -- and I've attached a copy of the press release -- released a misinformed press statement saying that Bill 96 will wipe out rent controls. It's a gross exaggeration in the aid of a political cause. Was an alternative offered? No. Because they may not have one or, worse, possibly do not consider the matter a priority. We are looking forward to discussing the matter with them.
Reality suggests that in two years we will have had an extended period where no social housing or rental housing will have been built. Meanwhile, we know immigration continues with a huge proportion moving to Metro Toronto -- 75% of immigrants to Canada -- whether the government likes it or not. We know 80% of new immigrants live in rental housing. So where are they going? The answer is that the majority are in substandard housing or overcrowded housing conditions which will have shocking social consequences in the future, if they don't already.
The crazy thing about the rental housing supply issue is that our analysis and those by others suggests that, with change, government will be a net beneficiary in taxes to the tune of $464 million for every 10,000 units built. This does not include the benefit of creating jobs and housing Ontarians or less obvious matters concerning, for example, the impact on traffic congestion and public transit utilization -- one of my favourite pet subjects. By the way, the analysis has not been challenged. Frankly, no one group has come up with a solution that does not involve billions in taxpayer dollars, which is an unacceptable alternative considering the tradeoffs relative to other matters like health care and education.
It is a regrettable fact that the first-time renter does not have anyone representing their interests. In the US, investors have built over one million new rental units in the past five years; in fact, it has been a boom. Rentals are being built in the rest of Canada, including Vancouver.
Rental housing is one of the fastest-growing housing markets in the US. Why? They are, for example, building the housing in response to the demand generated by individuals working in knowledge-intensive industries, or people who simply want the many amenities which can be provided which may not be readily available in a subdivision or in a resale house, or people who simply choose to rent rather than own. We all know here that investment in housing isn't what it used to be because of the low inflationary rates. Some people are choosing to rent and invest their money elsewhere rather than in a house.
The funny thing is that governments talk about creating the jobs of the future. Where's the multirental housing of the future? Where's the choice? For those would be renters in the Toronto area who can't find an apartment but who are lucky enough to come up with the 5% down payment, the government gives them the privilege of amortizing over $20,000 in taxes for 25 years and a home in the suburbs which could be on the other side of town from where they work.
At the same time, we have a system which encourages many of the tenants who don't need government protection to stay in units which otherwise would be the part of the affordable housing supply -- in doing so, denying those who need housing. Of course, the insult added to this injury is that nothing new is being built.
The Tenant Protection Act has been the subject of industry criticism but, with some changes, it is something that the industry can live with. What really needs to be done is for all parties to work together to solve the bigger problem of housing because the consequences are too serious to be left to chance.
If an industry is taxed to a point it can't function, then the tax structure has to be changed. The problem here is all levels of government have their hand in the tax jar and no one is prepared to make the first move. If the supply of rental housing and affordable housing is the big issue everyone rightly recognizes it to be, then why not make it an attractive investment and let us do our job? It would be like cutting the Gordian knot.
The TPA, with its warts, remains part of the solution and not the problem. That is why it must be considered within the context of the big picture. The real problem is that the total package of changes required from government is taking too long, and in the meantime the people of Ontario are being denied housing and, of equal importance, being denied housing choices.
The opposition should encourage the government to require that rental housing be treated no differently than owner-occupied housing without increasing the tax burden on owner-occupants. The Fair Municipal Tax Act passes the decision on the proverbial buck to individual municipalities which, with all the other changes happening, are not likely going to make unilateral decisions.
The industry has been on record on this issue for some time. Presumably we can learn lessons from the past and fix this problem once and for all rather than perpetuating a disaster. Thank you for your considered attention.
Mr Kwinter: Mr Lyall, I found your presentation very interesting, and I agree with a lot of what you say, but I think there are some basic concepts that you really have to address. One of them is your analogy, "Can you imagine what would happen if government dictated the price cars could be sold for or became involved in design and production?" To me, that is of no consequence. You can either have a car or not have a car. There's public transit. You can walk. There are lots of ways that you can get from point A to point B without having a car.
When it comes to shelter, you either have it or you're homeless, sleeping in the park. If you can't afford that shelter, you have a problem. I think we as a society have a responsibility to make sure that all our citizens have some minimal standard of housing. I think that's something that has to be addressed, and you can't just fall back on the free market: "Let the market dictate, and if you could only get rid of all of these impediments like taxes and service charges and everything else, we could do just fine."
The other basic problem that I have, and I have made this argument so many times with friends of mine who are in the development business -- and I can tell you I have a lot of them -- is that it seems to me that the basic structure of rent control is that you as a property owner build a product for a market that you are trying to reach and you set the price. You build in your profit, you build in everything you want and say: "This is the building. Here is what I need to get an adequate return on my investment."
If something happens that I could not predict, for example, taxes go up, costs of basic services like water and energy go up, then I should be able to pass that through, and yet in your statement you're saying one of the biggest problems you have is that it's virtually impossible to forecast a stable return, much less a return at all. Why is that so? If you could address those two issues, I'd appreciate it.
Mr Lyall: Just on the point about the cars first, some people have to have cars in our city now. We haven't been building public transportation to the extent we should have been building it, and some working people have no choice other than to own an automobile. If they don't have one, they can't get to work. It's not simply a choice of whether you want to own a car, that you can walk.
Mr Kwinter: You can always lease one or take a cab.
Mr Lyall: You're right that the industry does set the price. Any industry sets the price for the product it produces, but there are factors which of course determine what that price will be, and some of those factors are tax factors. Yes, theoretically you can pass that on to the consumer. However, if the price that ultimately is set, based on those things being passed through, exceeds what the consumer can pay, then you've got a problem. Therefore, why would you invest in an industry where you're going to produce something the price of which is going to be beyond what the market can bear? Then you'll build a building that will just have a bunch of empty units on it and you'll lose your shirt or have some pretty annoyed investors. So while the industry does control what the price is and can pass things through, if you can't hit the market price points, then you can't build.
Mr Kwinter: I just want to point out that is the problem we have. That's why they're not being built.
Mr Lyall: Exactly. I'm agreeing with you.
Mr Kwinter: I'm saying that's the problem, but what I'm saying to you is that what is happening is that unless you alter a lot of other things in the chain, that's not going to change.
Mr Lyall: Exactly. The other solution is to give everybody huge wage increases, which isn't likely going to happen.
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Mr Marchese: Mr Lyall, I have lots of questions of you. Of course, there isn't going to be too much time for that.
I hear your distaste for government regulation, but I have to tell you that all aspects of life are governed by various types of regulations. For me, it's something that I think we as people in this society need. You're saying regulation in this matter as it relates to landlords is a bit of a problem; as it relates to those who build it is a problem. You say you don't like government regulation or its interference, but you do want government to interfere with reducing development charges. You want the government to intervene in that regard. If they do intervene in that regard, you think that's okay, but you don't like government intervention in general.
Mr Lyall: No, I didn't say that. What I'm saying is that government intervention to the extent we have it now has killed an industry. I'm not a Libertarian.
Mr Marchese: I was trying to keep track of what you were saying about government intervention and how that has affected your industry. I didn't get a chance to write your words accurately, but you want us as a government to equalize property taxes, because that's a big problem.
Mr Lyall: Huge.
Mr Marchese: Sure. That has political consequences in terms of where money comes from. If you put money here, you've got to take it from somewhere else, so politicians will have to bear the problem of that action. It's none of your concern how they deal with that, but you want them to get involved in dealing with that.
You want the government to have the GST, because that's what Mr Lampert says -- I think most of you guys agree with this stuff -- streamlining regulations on building, have the CMHC mortgage insurance fee and lower the administration due to reform of rent regulations, which is this bill. That's a small part of the big picture, because you said we need to see this in the larger picture.
Mr Lyall: In terms of the economics of it, yes.
Mr Marchese: That's a small part; it's 200 bucks out of that $3,000 gap. In my view, this is not the big part of the problem. You've got other big problems to deal with, and you're not building --
The Chair: Mr Marchese, can you get to your question, please.
Mr Marchese: Gee, three minutes certainly goes fast.
The Chair: It's fast, three minutes.
Mr Marchese: You're not building because you're not making enough money, but you want the government to intervene, is the question. This has a lot of consequences. This bill, in my view, is going to hurt a lot of tenants and it's not going to make you guys build, is the point I make.
Mr Lyall: The point I'd make there is that you're right in terms of the economics of it, but if you don't change the regulatory system we have now, in terms of the rental regulatory system, with something like the TPA, you won't have any investment. You can make all those other changes, but no investor is going to stick their neck into a market where at any given point in time the government can turn around and say, "Oh, sorry, this is where your price point will be in the future." The banks won't finance that.
Mr Marchese: This is not going to change it at all for you; it's not going to help you out at all.
Mrs Julia Munro (Durham-York): I wanted to come back to something we've heard several times in the submissions that have been made. You suggest in the second paragraph of your opening that the group of companies that you represent includes condos, non-profits and co-ops. This Tenant Protection Act only deals with regulatory burden and clearly there has to be an economic part that goes along with it to provide incentive. One of the recurring themes that we hear is the concern over the industry having incentive for low-cost housing, that there might be an incentive created that would do upper-end, but clearly -- and you identify immigration, for instance, as an issue for first-time renters and things like that. I just wondered if you could comment on those kinds of criticisms.
Mr Lyall: Sure. The economics of this notion of affordable housing are such that with all the package of changes, if they were brought in we could certainly hit the upper range, the luxury range, and the midrange market or the average market. In terms of what we know as being base affordable housing, no, we're not going to build those under these circumstances. However, the economics of housing markets dictate that what happens is that when you build new units, you'll attract renters from existing units into the new units because they'll want the newer toys and everything else, and then those existing units will be freed up. You see, if you've got a problem with how many units there are relative to the demand for units, if you increase supply you ease the pressure on that, obviously, and then what happens is that those existing buildings will have to compete more.
One of the things right now is some of the existing buildings don't necessarily have to compete; there's no competitive market out there. If you own an apartment building and a vacancy comes up, it's occupied immediately, but it's occupied at a price dictated by the government.
Mr Frank Klees (York-Mackenzie): Mr Lyall, thank you for a very enlightened presentation. You mention that the rental housing market in the US is booming, and you also make reference to the fact that there's a very healthy rental market in Vancouver. Can you tell us some specifics that are present in that US market or in the Vancouver market that are not present here in Ontario?
Mr Lyall: They don't have the same rent regulatory regime we have here. It's well known that Ontario has, certainly outside of Manhattan, and even Manhattan's made some changes recently, the most onerous and prescriptive rent control system in North America; and it's a province-wide system, it's not just Toronto. That's one major difference that we have with Vancouver and certainly a major difference with the US.
Rent controls were brought in in Ontario at the same time as they were brought in in many parts of the US, back in the 1970s, in response to the wage-and-price controls, inflation, a whole bunch of factors that were happening back then. But the massive trend in the US has been to get right back out, and to a point where there really are very limited pockets in the US where there are effective rent controls, certainly to the extent that we think they are -- not as a result of that, but I'm sure it has something to do with it, and also in response to the demand for rental housing which has come up in the last five years. For example, the US economy came out of the recession a couple of years earlier than we did, so it's in response to that too. But they've been building a massive amount of this form of housing, and we haven't been doing that. Our economy is not that different from the US economy.
Mr Klees: The kind of rental housing that's being built, would you classify that as affordable? That's really at issue here: Can we get people into affordable rental units? You're saying that it's the regulatory environment that's largely responsible. What we want to do is make sure there's affordable rental housing available.
Mr Lyall: You could argue that we're dealing with two separate issues. One is to get the median range and the luxury apartment industry going again. In terms of the affordable, I guess the affordable rental housing they're building in the US is also funded by low-income housing tax credits, which is a completely different system than the one we've had up here for building social housing. It has proven to be effective. There have been many problems with it too, but that is one of the avenues through which the industry directly is involved in building affordable housing down there.
The Chair: We've run out of time. Mr Lyall, thank you for coming.
Last call for the Tenants Association of 54 Roncesvalles. Are they here? Ladies and gentlemen, that concludes the presenters for this morning. I will adjourn the committee hearings until 1:30 this afternoon.
The committee recessed from 1139 to 1331
KYLE RAE
The Chair: The first delegation this afternoon is Kyle Rae, councillor, city of Toronto. Good afternoon, Mr Rae.
Mr Kyle Rae: Thank you for my second opportunity to speak to you. The last time was August 1996. I'm disappointed that the legislation you've tabled certainly hasn't taken into account what I said last time. My sense is that with this piece of legislation this government can say, "We did consult," but then we can say, "You didn't listen." I think you have probably been hearing for the last couple of weeks that people are very concerned that the points they made to you last summer are not coming through in the legislation you have tabled.
The area I represent is ward 6 in downtown Toronto. Some 70% of the housing in ward 6 is rental housing; 50% of the housing is in the form of apartment buildings, many of them high-rise. In 1996, we estimated there were 20,333 tenanted units in my ward. That's a city the size of Orangeville. That is what I represent, so I have a very great interest in representing my constituents. They have, over the years, worked very hard to try and improve rental housing, rental housing protection, the Rental Housing Protection Act and the Landlord and Tenant Act.
This legislation falls very short of pushing us further ahead in protecting tenants. You call it the Tenant Protection Act, but does this legislation do this? Does it in fact protect tenants?
Does it stabilize rents? No. We know from your own legislation that capital improvements and operating costs such as taxes and utilities can be passed through. You have removed the costs no longer borne in the clause so that we and tenants will no longer be relieved of the improvements that have been made in the past.
Does it ensure that buildings are kept in good repair? No. You have decided that we no longer need the order for prohibiting rent increases, which has been a useful hammer in getting landlords to keep their properties in repair.
Does it stop landlords from forcing tenants out of apartments so that landlords can jack up the rents? No. You haven't put anything in place. You have suggested you'll be looking at harassment, but you have to do that because you've dismantled the Landlord and Tenant Act. You didn't need to do that, but because you've gone in this direction, you are having to create another bureaucracy to deal with the shortcomings of your own piece of legislation.
Does it provide a more effective process to deal with property standards violations? No, because you're removing these and you're suggesting that we will take these issues to the provincial court. I'm not sure the last time any of the members of this committee tried to deal with the provincial court, but it can take between one and two years to get matters heard in provincial court. I don't think that's an expeditious or timely manner to deal with landlord and tenant issues, especially concerning the health and safety issues that arise out of tenancies.
In February 1996, I held a meeting at Jarvis Collegiate Institute for the community to talk to the minister, Mr Leach. The minister is the MPP for the area. The minister was told quite categorically by the tenants in that neighbourhood that he was to leave the existing rent control legislation intact, and if he were to do anything at all, he should tighten up the requirement that increases that occur above the guideline should be ensured to be spent on capital improvements on the buildings. That is the piece he was told needed to be fixed. It was categorical across the board from the tenants who attended that meeting. That has not appeared on the table, and it's quite regrettable that the province has decided to go in this direction.
In addition, I've already mentioned the order for prohibiting rent increases. The city has found that has been very effective in dealing with the condition of the housing stock. Between 1992 and 1996, 72% of these orders received compliance within 30 days. We know it has a proven track record. It's effective in dealing with the shortcomings of the housing stock. Why you would remove that from the array of legislation that allows us to keep housing in good order surprises me. I would have thought this government would be interested in ensuring that people had safety in their residential buildings, that they were able to be assured that they were going to get elevator service when they needed it for emergencies, that they would get hot water and cold water running in their apartment buildings, but you have made this far more difficult for us to try and control the shortcomings of some landlords.
It's interesting that I've been called back to speak on this issue now. Just last week the United Way of Greater Toronto released Metro Toronto: A Community at Risk and it got a great deal of play in the media last week. But I think, in looking over the comments that it makes about housing, the shortcomings of this new piece of legislation will only make the situation worse for people who live in large urban centres in this province. I quote from page 43 of the report:
"Proposed changes to provincial rent control legislation have increased uncertainty and increased the potential for higher rents, more evictions and increased homelessness in Toronto."
They go on to say, "Given the 21.6% reduction to shelter allowances for GWA recipients, a single person on GWA would be unlikely to be able to afford their apartment."
Given the kind of slippage and slide that we are undergoing in Toronto, why would we want to move in the direction of making it more difficult to ensure that people have safety in their homes? Why would we make it more difficult for people to be assured that there's going to be stability in the rents that they pay? It seems to me that this provincial government is only looking at one sector of society and that would seem to be the people who own rental accommodation, rather than the people who are renting it.
I know for many years members of the Conservative Party felt that the Rent Control Act was weighted in favour of the tenant. It's quite clear in this piece of legislation it's gone way over to the other direction, that you are pulling the rug from under people who have been able to establish stable lives in their neighbourhoods.
I'm glad to see that Ms Bassett has arrived. I remember early on when you got elected that you and I attended a meeting at the Manulife, which is one of the largest rental buildings in my ward, in your constituency. It was reported at that meeting that recently Metro had estimated a 38% increase in evictions in the Metro area. We know where that number comes from. It comes from your government cutting people's welfare and in particular their shelter allowances. You have forced more people out on to the street, into shelters and not being able to afford their own apartments.
The city of Toronto has prided itself on being able to build stable neighbourhoods. This piece of legislation is moving in the opposite direction. In fact, in the six years that I've been a councillor in ward 6, the number of tenants' associations has almost evaporated in the whole of the ward because there has not needed to be a tenants' association that is constantly having to go to battle to protect the rents that they're paying. What you're doing is going to help us organize in the future. You're placing people at risk, you're going after the mainstay of their security, which is their homes and their apartments.
Frankly, there's no need to do this. We know from other jurisdictions that you do not need to get rid of rent control to spur new housing development. It has not been the case in BC, it's not been the case in New York. Vacancy decontrol has not served the purpose you think it will, which is to create new rental accommodation.
I just hope that members of this government take into account the people they don't see every day, take into account the people who are not able to lobby them, take into account the people who are living below the poverty line. I remind you, the United Way report talked about a 30% increase in the number of children who are in poverty. Many of them are living in apartments in this city today and you're dragging them further into poverty and on an ideological collision course with our future.
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Mr Kwinter: Thank you, Mr Rae, for your presentation. I was particularly interested in your concerns about work order compliance and the removal of the provision that there can be no rent increases while work orders are outstanding. If you could project, what do you think is going to happen to the buildings that normally were sort of pressured to get their act in order, in order to be able to raise the rent? How do you feel that's going to impact in your particular area?
Mr Rae: In the area I represent, many of the high-rise buildings were put up in the 1950s and the 1960s. What they've experienced over the last five or six years is a great deal of renovation. Elevators, balconies, security into the garages and the roofs of the garages have had to be repaired; stairwells and the alarm systems have had to be upgraded. If we were not able to use an instrument like the OPRI to get landlords to respond to these work orders, we would not be able to provide people with safety in their homes. We know that some of the finest buildings in the ward physically on the outside are beginning to deteriorate on the inside. The hot water, the service of water, the air conditioning, if they have it, or heating are beginning to break down and the landlords have not, over the last 20 years, been willing to invest in that and to upgrade.
What I can see happening -- and it's beginning to happen in the smaller, maybe the five- to six-storey buildings -- is the larger buildings have gone through a repair program, but the ones that are five, six storeys high, you're beginning to see a real deterioration in the condition of the buildings. People are wanting to make choices about where they live because the degradation of their housing condition is increasing, but they don't have a way out, given that they may well be on fixed income or that there's no alternatives that they can afford. We're finding that people are being trapped in living conditions that are below standard, and as the OPRI is in place now, the city has been very effective with its building officials in fire and health safety in the health department to go in and investigate and to ask for orders to improve them. But without that in the future, a system that leaves us to the plodding pace of the provincial court will mean that people will be in limbo for one or two years waiting to see what will happen or whether or not the landlord will repair or whether they will flip the properties. It'll be, I think, a catastrophe for the housing stock in the city, as well as major cities in Ontario.
Mrs Munro: I just want to ask you if you feel there is a problem in terms of the vacancy rate we have, particularly in Toronto.
Mr Rae: Yes, I think we do have a severe problem in downtown Toronto with the vacancy rate. It's more and more difficult for people to find housing that they can afford. I think the major culprit in this is the provincial government having walked away and turned its back on the social housing program.
The city of Toronto has, I think, about 30,000 or 40,000 units of social housing, whether it be co-ops or non-profit housing, and they have been very successful in providing people who have fixed incomes to be able to afford housing in a mix that has been very successful.
The failure of that program to be continued by this provincial government has meant that it caused a greater dislocation in the housing stock, that we don't have new units going on line. I don't think that's because the private sector is not interested in building rental units. My sense, in seeing what has been happening in other jusisdictions, is that rental accommodation is no longer the form that developers want to build. Condominiums are far more efficient for them.
They can sell them off. They can get their financing from the banks easier. They have to presell them and when they have built, the condominium corporation takes it over, so they're no longer involved in having to maintain these buildings. There's a whole new structure that takes over the maintenance and care of these buildings, and they can walk away. They've got their money in and out in a very short period of time, with their profit. Fine. However, this fails to provide us with the alternative, which is the social housing program I was keenly in support of.
The neighbourhoods of downtown Toronto have been rebuilt by that. If you think, 10 years ago, downtown Toronto was a sea of empty parking lots, and we have created communities and neighbourhoods out of those seas of parking lots. That's something the provincial government can be very proud of, but I think this provincial government has not measured how significant that has been in turning around the capital of this province and making it a safer place.
The Chair: On that note, Mr Rae, I'd like to tell you we've run out of time. I thank you for your usual succinct presentation. I also thank you for mentioning the principal town in my riding, Orangeville. It's a wonderful place to live. Thank you very much for coming.
Mr Rae: I wish the people of the city of Toronto had as much influence as those in Orangeville. Thank you.
The Chair: We all have our bailiwicks, don't we?
DAILY BREAD FOOD BANK
The Chair: The next presenter is the Daily Bread Food Bank, Sue Cox, executive director. Good afternoon, Ms Cox.
Ms Sue Cox: Good afternoon to you.
The Chair: We have your written presentation.
Ms Cox: Yes, I submitted it. I'd like to thank you for allowing me the opportunity to speak to you today about this bill, and particularly about one part of it.
The context for my presentation is of course the Daily Bread Food Bank, Canada's largest food bank. We are distributing over a million pounds of food a month to a variety of community agencies and food banks throughout the greater Toronto area. We also provide direct assistance from our warehouse on Lakeshore Boulevard. But in addition to that, we have a particular interest in reducing the need for food banks. To help us with that, we conduct primary research with food bank users, and that has formed the basis for a number of briefs I've presented.
We interview in particular between 900 and 1,000 food bank households annually and get a lot of data from them about their condition, the things that would make a difference to them and the things that might eventually lead to their not needing food banks. That leads to a particular concern we have with the issue of housing. That of course is that rental costs and access to affordable housing are major reasons for food bank need, and anything that drives up the cost of that housing is sure to increase the numbers of people who need to turn to food banks for assistance.
There are a lot of things we'd like to say about this bill. We're frankly very fearful about the end of rent controls, and with reference to that, I've asked the clerk to distribute to you, along with my brief, a paper that we brought out about a year ago which speaks to the issue of the amount of money people pay for rent and what they have left over to purchase food.
I'm not actually going to speak broadly right now about the end of rent control, but rather I'd like to speak to the issue of discrimination against low-income people in housing. In particular, I'd like to speak to this committee about amending section 200 of the bill, which of course would amend the Human Rights Code to provide an exemption to allow landlords to use income criteria to discriminate against low-income people. That's of concern to us because we've seen so much of this type of discrimination. It's likely to have, along with the end of rental control, a devastating effect on large numbers of households who are already struggling to get into rental accommodation they can afford.
More context: 97% of food bank users rent the accommodation they live in. They typically live in market rental housing. Fewer than one in five are actually in subsidized housing. Rent is a major contributor to their difficulty and their inability to afford the food they need. They spend 60% to 70% of their income on rent, and perhaps more than that. Some 68%, more than two thirds of them, pay rent which is above the social assistance limit, so they're already diverting food money, essentially, from the basic needs part of their income, diverting that money to the landlord to pay their rent. If they don't have subsidized housing, it would be essentially unheard of for them to be paying 30% of their income towards their rent. It just can't happen.
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One thing they do have in common is that they pay their rent first. When a welfare cheque comes, or whatever the source of income -- a paycheque for many, many underemployed people -- the rent comes first. People know very well the devastating effects of losing their housing and the difficulty getting back into housing once you're homeless.
Over the last 20 years, the costs of housing have increased enormously and their incomes have been shrinking during that time. Shelter costs are the immutable costs for food bank users. The flexible item in their budget is food. That is why they go hungry and that is why they need food banks.
Children are 41% of the people relying on food banks right now. If there's sort of a snapshot of a food bank household, it's a family where the head of the household is between 35 and 40 years of age; probably, although certainly by no means always, headed by a woman; and that woman is supporting children. These are the people I think will suffer great discrimination under the current legislation as it's proposed.
I'm going to tell you a story, if I may, about somebody I know who happens to be a volunteer at the food bank. That's why I know it very well. She's a woman who's on welfare and she has suffered discrimination in housing because she was on welfare, even though it was under the guise of income criteria. I'm telling you this story just to make absolutely clear what I'm talking about. She has good credit; she has good references; she has had no difficulty with tenancy in the past in her life. She's not a particularly well educated person, but most of her life she's had a job. During this period of time she did not have a job and she was on welfare. She was renting a room in a household. The household was moving and she needed to find alternative accommodation.
She looked around in the housing market and, like so many people in her situation who are on welfare with very little money, she found some pretty rotten places. I think maybe -- maybe or maybe not -- you know about some of the housing that's available at the very low end of the rental market and which is affordable to people who are on welfare. But through a friend she was able to identify a bachelor apartment which was not that much above the shelter limit. In other words, she didn't have to divert too much of her food money in order to pay the rent. It was in the basement of one of these big high-rise buildings that are run by large property companies.
When she went to find out about the apartment, the super there said that she couldn't rent it because they had a 30-70 rule. They had a rule that you could only spend 30% of your income towards rent or they wouldn't rent to you. She came to me and said: "I can't believe this. I've always been a good tenant. What's happening?" So I called the property company. I thought this must be some mistake. I called them up and I talked to them; I went past the super. I said, "Do you know that this effectively discriminates against people on welfare because somebody on welfare can't have their income structured in such a way that it's possible that only 30% would go towards rent?" He said: "That's too bad. That's the rules. I can't go around the rules." I said, "I think you could, actually." He was a very high-up employee in the company. "I don't know that this is valid." He said, "Why don't you just go to the province and have them give people on welfare more money and then it wouldn't happen?"
That's the kind of thing that's happening to people out there. That discrimination was not overtly because the woman was on welfare. The discrimination was based on the idea that she could only pay 30% of her income on rent, but that effectively discriminates against everybody who's on social assistance just because of the structure of welfare. That's what this particular section of the legislation would allow to happen more frequently, in my opinion, than it does now. In fact, as part of the survey the food bank uses that I referenced before, we found that 46% had been refused accommodation, been refused apartments, because they were on social assistance. So almost half of the people we surveyed had had this experience of discrimination because they were on social assistance, whether it was overtly or whether it was in this other implicit way through the 30-70 rule.
Some 63% reported that the apartment they were refused was in fact cheaper or better than the apartment they eventually ended up in. They are being denied some of the better accommodation around because of the 30-70 rule and because of that kind of discrimination.
There has never been any study that shows any correlation between rent-to-income ratio at the beginning of the tenancy and the likelihood of default. It makes absolutely no sense to allow that, and to somehow enshrine it in the law seems pretty irrational to me. It might seem on the surface as though low-income households are more likely to default, but in point of fact they are much more likely to know the consequences of doing so than a lot of other families.
People on social assistance, people who use food banks, are very good copers. I talked about this a lot before. They scramble and they have to be able to cope very well with very little income. I think what's happening now is that the big property companies in particular don't really understand the very sophisticated coping mechanisms that people exercise now. All social assistance recipients and people in that low-income situation have given up things when they have lost work, have sold things in order to get by, have given up recreation and entertainment. They get more bang for their buck nutritionally at the grocery store than any of us do. They do very well. They go without winter clothing. In point of fact, they build going without meals into their budgets in most instances. When we asked food bank users what they would do if there were no food banks, 35% of them said they would go hungry. Nobody said they would fail to pay their rent as a result of that.
One of the things we find ourselves doing more and more is trying to introduce low-income people to business people and middle-income people, because frankly we think low-income people have had a bad press. They got to be an easy target for a lot of folks, particularly in the recession, and there was less sympathy towards them when employment was particularly high. So we've tried to spend some time talking about the people we know, introducing them to business people.
When that happens, we usually find that people who have never been poor are amazed to find how ordinary they are. These are not bad people; these are not even stupid people. These are people who are victims of circumstances which are beyond their control. They are people who want to hang on to their dignity, who want to hang on to their normalcy, and I think perhaps that might be understood.
In fact, the tenants we know who are renting from small landlords tend to have very good and understanding relationships with their landlords, but what this bill does, in my opinion, is allow the large property companies to discriminate against them, and that's what I'd really like to speak against.
I'm sure you will have some questions, so let me just sum up by saying that these apartments I'm talking about that it's difficult for people to access are often the ones that are better and cheaper. I think it would be unwise to deny low-income people or people on welfare access to cheaper housing, because in the end you pay for it through social assistance. They can get housing that's under the shelter limit and then the government would find itself paying less money to these people. So it makes no sense to make discrimination more legal or to allow landlords to do it more easily than happens now.
I'll stop now and let you ask me questions, if you will.
The Chair: I know members have some questions.
Mr Gilchrist: Ms Cox, good to see you again. Thank you for making your presentation before us here today.
I have a couple of questions for you. Let me just start with one of the examples you yourself gave. You talked about interviewing people, and I think you used it in the plural. You said it was a significant percentage of the people you had surveyed who said that the apartment they were turned down for was cheaper. Would it not then follow that another landlord obviously deviated from the 30-70 rule? If it's the more expensive landlord who winds up taking that person, that would seem to rebut the case that there is not a place for people to go if it is assumed that this 30-70 is a magical and a fixed rule in the mindset of landlords. Would that not be true?
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Ms Cox: The 30-70 rule is most common among large landlords. The big property companies are the ones that are most inclined to do that, and they often have cheaper accommodation. The more expensive landlords are oftentimes the smaller landlords who have buildings with fewer units in them and that kind of thing, and people pay more.
Mr Gilchrist: So when you said "better units," you meant units in larger buildings perhaps?
Ms Cox: They were either cheaper or better or both. In other words, they were more desirable for them. They had to forgo the more desirable apartment because of discrimination.
Mr Gilchrist: We heard earlier, in the first week of hearings here, that the number generally accepted is there are 150,000 people in this province who are paying above the 30% rule. Is it your submission that simply by stating that it is a right -- it is not banned under the act right now; it simply clarifies the situation -- that the landlords of those 150,000 will now simply throw those people out and will take zero rent rather than the income they're getting?
Again, would the fact that there are landlords who have deviated not make the case that -- there are 150,000 apartments where they haven't used an arbitrary 30-70 rule. They have clearly looked at the circumstances of each tenant and have made a decision based on their ability to pay. Why would that change if this --
Ms Cox: I would applaud those landlords, but I am afraid they are only some of the landlords. You talk about 150,000; far, far more are low-income people in rental accommodation in the Toronto area right now, far more than 150,000 people, so that is a minority of people. I would also submit to you that those apartments are very often in the more run-down buildings. They are not in as desirable accommodations.
Mr Gilchrist: But you're not suggesting that those landlords will throw those people out just by clarifying something in the act, are you? They'll continue to stay.
Ms Cox: With respect, sir, I don't know that whether people are going to be thrown out or not has anything to do with it. What I am saying is that people moving into -- we have lots of situations right now where people on welfare are in apartment buildings where 30-70 rules apply, who rented those apartment buildings when they were employed and now find themselves on welfare. No, they're not thrown out -- I am not saying for a moment that they would be -- but new people can't get into those buildings.
I think of my own daughter, for example, who was able to rent a very affordable apartment. She is a person who happens to have a good job; she is an engineer. She was able to rent it over and above somebody on welfare, even though she could afford more. That's really quite a typical situation. A lot of other people are doing very well in apartments because of discrimination against low-income people by landlords.
Mr Kwinter: Thank you, Ms Cox. I'd like to pursue this area. I haven't heard of anyone putting forward the proposal that people are going to be turfed out of their apartments because suddenly people are going to apply the 30-70 rule. The concern, and it was expressed by Mr Norton, who was dealing with the human rights, is that people will be discriminated against getting into the apartments by using this criterion. And not only the 30-70; someone who may be a recent immigrant or a student or someone else who doesn't have a rental history can be turned down because they don't have that rental history; they can't show their income stream in a way that is satisfactory to the landlord.
That is a great concern. The landlord has the ability to collect the last month's rent, so he certainly has a 30-day or one-month leeway if he finds he has a problem with a tenant. There are also ample provisions to protect a landlord from the tenant from hell, where they have a history of being an undesirable tenant.
I'm agreeing with you. I think the provisions -- I think it's section 200 of the act -- dealing with this requirement are going to create a lot of needless problems and are going to create some very serious strains on people who should have every right to seek an apartment that they think they can afford and not be discriminated against solely for that.
Ms Cox: I absolutely agree, yes.
The Chair: You've run out of time.
Ms Cox: There you go.
The Chair: We thank you for coming.
ONTARIO ASSOCIATION OF PROPERTY STANDARDS OFFICERS
The Chair: The next presenters are from the Ontario Association of Property Standards Officers: Joseph Perrone, Frank Weinstock and Peter Clark. Good afternoon, gentlemen.
Mr Joseph Perrone: Mr Chairman, members of the committee, ladies and gentlemen, good afternoon. My name is Joseph Perrone. I am the chief property standards officer for the city of North York and president of the Ontario Association of Property Standards Officers. Also with me today is Mr Frank Weinstock, chief property standards officer for the city of Scarborough and vice-president of OAPSO, and Mr Peter Clark, who is chief property standards officer for the city of Kingston and secretary of OAPSO.
The Association of Property Standards Officers was founded in 1975 to provide training for all municipal personnel who are engaged in the administration or the enforcement of legislation governing the maintenance, occupancy, repair and improvement of property and the environment pursuant to the Planning Act.
In recognition of OAPSO's continuing efforts to educate and train its membership, the provincial government on June 25, 1992, passed Bill Pr22, the Ontario Association of Property Standards Officers Act, 1992, private legislation that allows for the certification of those members of the association who meet the established regulations.
The association membership currently numbers more than 750 individuals representing over 225 Ontario municipalities and government agencies. As such, OAPSO has a keen interest in Bill 96, as it introduces changes to the laws governing maintenance and occupancy of property. Because OAPSO members have hands-on involvement with the enforcement of the property standards bylaws, as well as other bylaws, OAPSO is in a unique position to provide input based upon actual enforcement situations. These experiences form the basis for comments which will exert a more efficient and effective enforcement of property standards and other bylaws and reduce costs to municipalities. In fact, OAPSO has spent considerable time in developing proposals and recommendations to amend section 31 of the Planning Act as it relates to property standards enforcement. These recommendations were presented to the Ministry of Municipal Affairs and Housing prior to the bill being introduced.
I will now turn it over to Mr Frank Weinstock, who will take you through OAPSO's submission and the proposed changes we are submitting for the committee's consideration. Afterwards, we'll be happy to answer any questions you may have.
Mr Frank Weinstock: Maintenance of apartment buildings is a major concern to landlords, tenants, municipalities and the public in general.
Under the maintenance provisions of Bill 96, the government hopes that by allowing landlords to move to a market rent level once a unit is vacated, landlords will be encouraged to keep the buildings sound, in good repair and attractive. However, in the event that landlords need that little push, the changes proposed to section 31 of the Planning Act, henceforth sections 15.1 to 15.8 of the Building Code Act, are designed to aid in the enforcement of property standards bylaws. These changes are a welcome effort by the government to address issues previously brought to the attention of the ministry by OAPSO.
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After having reviewed those sections which most directly affect the enforcement of maintenance and standards by OAPSO and its members, our association has provided the ministry and you with written comments for your consideration. The comments contain a number of technical changes to the proposed wording of specific sections which our association considers significant if the enforcement of maintenance and standards are to be improved. These include the definition of "officer"; the issue of service and posting of an order; the provision of discharges of orders at owners' expense; service of notice of appeal by an owner on the municipality; and transitional rules for sections 15.1 to 15.8. It is not our intention to review each of these at this time, unless it's the wish of the committee for us to do so. However, we do encourage you to consider each of the technical changes seriously.
Our presentation will address three issues which are of particular importance, namely, the failure to include a provision that corresponds to section 71 of the Planning Act and the current bill; the recovery by a municipality of its costs as taxes; and OPRIs.
With respect to our concerns about the failure to include a section comparable to section 71 of the Planning Act and the current bill, we refer you specifically to paragraph (e) on page 5 of our written submission. Subsection 212(3) of Bill 96 amends the building code by restating, with some modifications, similar provisions as contained in the present section 31 of the Planning Act. However, the bill fails to include a corresponding section to section 71 of the Planning Act, namely, and I quote, "In the event of conflict between the provisions of this and any other general or special act, the provisions of this act prevail."
We refer you to the case of Re Yorkville North Development and the City of North York, which case may be found at 64 Ontario Reports (2d) 225. In that case, a property standards officer issued an order under section 31 of the Planning Act. The recipient of the order appealed to the property standards committee and then to a judge of the district court, now the Ontario Court (General Division), as provided for in section 31, both of which orders were confirmed.
The corporation subject to that order then appealed to the Court of Appeal. That appeal was quashed, with the court noting that subsection 31(19) of the Planning Act provided that the order as confirmed or modified by the judge shall be final and binding. The court went on to say that in view of section 70, now section 71 of the Planning Act, which provides that in case of conflict the Planning Act has priority, and because subsection 31(19) is a special provision concerned with the administration of a property standards bylaw, subsection 31(19) overrides subsection 36(1) of the Courts of Justice Act, which confers a right of appeal from a final order of the judge of a District Court.
It's OAPSO's submission that a section comparable to section 71 of the Planning Act should be included in the new legislation or any gain in shortening the period for enforcing property standards bylaws at the front end by eliminating the requirement for notice may be more than offset by more and extended appeals.
We have offered a recommendation for possible wording for section 15.9 in our submission which reads as follows:
"In the event of conflict between sections 15.1 to 15.8 inclusive of this act and any other general or special act, the provisions of sections 15.1 to 15.8 inclusive of this act prevail."
With respect to the recovery of costs by a municipality, without the certainty of recovery of costs of "repairs," municipalities will be reluctant to expend funds.
Part VII of Bill 96 restates the vital services provisions presently contained in the Municipal Act, section 210.2, without change. As a result, moneys expended by municipalities are not elevated to the status of municipal real property taxes. In fact, funds expended only become a lien after registration of a notice in the land registry office. Further, subsection 139(3) specifically provides that section 382 of the Municipal Act does not apply and no special lien is created.
If vital services bylaws are ever to be adopted by municipalities, municipalities need certainty as to the recovery of moneys expended. Since Bill 96 includes provisions for both sections 15.4 and 15.7 to recognize the funds expended by municipalities to undertake repairs pursuant to the property standards bylaw, either in the normal course or in the course of an emergency, it would seem appropriate that the same cost-recovery provision should apply to funds expended in restoring a vital service. In fact -- and it may be beyond the powers of the committee -- OAPSO is of the opinion that the same recovery provisions, that is, any funds expended by a municipality in the enforcement of any bylaw, whether property standards, vital services or the multitude of Municipal Act bylaws, should be recoverable as municipal real property taxes.
The final issue is that of orders preventing rent increases, OPRIs. Although Bill 96 continues to recognize those OPRIs which existed prior to the passage of the act, the provisions of the new act do not permit or provide for any new OPRIs or any form of OPRI based upon property standards orders issued by municipalities. The inability to trigger the issuance of an OPRI is of concern to OAPSO. The loss of the ability for the province to issue a rent-freeze order based upon an outstanding municipal order is a loss of leverage that may deter some landlords from acting quickly in carrying out the repairs.
We understand that there are many OPRIs in place which have not led to repairs or improvements in building standards. But on the other side of the coin, there are many landlords who have undertaken repairs, often reluctantly, rather than face a rent freeze and the administrative procedures that follow. Some form of rent-freeze mechanism should be retained or created.
A halfway measure may be a return to procedures similar to those in place with the Residential Rental Standards Board, namely, the municipalities, at their option, forward to the board those property standards orders that dealt with serious violations that had an impact on health and safety of tenants, such as structural problems, inadequate heat, fire safety, plumbing defects. The optional nature of the filing of the order permitted municipalities to negotiate with landlords prior to the forwarding of the order to the board, and the principle of substantial completion permitted municipalities to negotiate with landlords after the orders had been filed. Or perhaps a different approach may be developed.
One concern often expressed about OPRIs is the inordinate length of time to hear the issues involved, and as a result rent freezes may be unduly long and unfair, thereby restricting cash flow and impeding the necessary repairs. It's obvious that timing is everything.
That different approach to OPRIs may be tying it to the new tribunal being proposed by the bill. The OPRI could be an administrative order issued at the time of a tenant-commenced action, if certain criteria are met; that is, a certified copy of a municipal work order which has been duly confirmed pursuant to the processes of the new sections 15.1 to 15.8 is filed at the commencement of the action. The administrative OPRI would then be served upon the landlord along with the notice of the newly commenced action. The OPRI would then be in effect and would preclude unwarranted increases until the tenant action is heard by the tribunal. This would provide a swift and timely mechanism for addressing the issues for both the landlords and tenants.
In conclusion, OAPSO supports the principle of streamlining the laws and processes governing the maintenance and occupancy of properties. Our association encourages you to consider seriously the technical changes proposed in our submission, including those with respect to the definition of "officer," the issue of service and posting of orders and transitional rules, as well as those matters with respect to the inclusion of a section akin to section 71 of the Planning Act, the recoverability of costs as taxes and OPRIs, which have been detailed in our presentation today.
We thank you for the opportunity of making this submission and will attempt to answer any questions you may have.
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Mr Kwinter: I'd like to get a clarification. What is the interpretation of your association of "vital services"? What follows?
Mr Weinstock: Vital services are defined in a section of the Municipal Act and in the new bill, and we would deal with those. Vital services I would assume would be hydro, water, heat, gas, those issues.
Mr Kwinter: The reason I'm asking is that if you are a tenant and you have electricity and you suddenly don't have electricity, and the municipality has to come in and do it, is that not their obligation as opposed to the landlord's, where he suddenly gets a lien, or in your case you want to put it on his taxes, to pay for that?
Mr Weinstock: Correct.
Mr Kwinter: What I don't understand is that when there are these vital services that the municipality provides, and suddenly you have to go in and make some repairs to those vital services, I assume those vital service repairs are outside the building and not inside the building.
Mr Weinstock: You're talking about repairs. "Vital services" deals with the failure of the landlord to pay his bill, and as a result vital services are turned off. All we're saying is that if you ever expect a municipality to pass a vital services bylaw, they are not going to expend those funds necessary to pay the arrears unless they have some certainty of recovery, and at this point there is no certainty of recovery.
Mr Kwinter: You feel that if a lien is put on the property, that doesn't give you the same certainty? What happens if you don't pay your taxes anyway?
Mr Weinstock: The difference is that real property tax takes a first priority whereas a lien would be subject to any prior taxes outstanding and any other mortgages or liens that exist prior to the issuance of that new lien, so it's strictly a priority issue.
Mr Kwinter: So you're suggesting that if there's a building with 150 tenants and you are in a dispute with the landlord, that's too bad for the tenants, they're going to have to suffer until you get your landlord sorted out?
Mr Weinstock: What I'm saying is that if the expectation is that the municipality is going to bankroll all the arrears of landlords who do not pay their bills, they need to have some ability to collect those funds back. Otherwise they don't have sufficient funds to do so.
Mr Gilchrist: Mr Weinstock, it's good to see you. Just a clarification for Mr Kwinter. Correct me if I'm wrong, but a supplier of a vital service must give a municipality 30 days' notice if it intends to discontinue any of those services, which then gives the municipality, via these gentlemen, the opportunity to add some extra weight to whatever pressure is being applied by Hydro and others, so hopefully you won't see this as a very frequent occurrence. But I appreciate your comments about adding it to the taxes and perhaps cutting out one extra bureaucratic step here.
Just a very quick comment: Thank you very much for your technical suggestions, and we'll certainly take them under consideration. I think they're very reasonable.
On your final point about OPRIs, do you have comments? I guess it's just two different ways of approaching the same problem. We have proposed to set very high fines against any landlord that violates these sorts of standards. Do you have any representations as an association in terms of how high those fines have to be or whether you see that as being an effective way to bring a discipline and to make sure the tenants are protected in terms of health and safety issues?
Mr Weinstock: I think you could probably raise the fines to a billion dollars and it would make no difference, because the value of a fine is only that which is rendered by the JPs who hear the cases, and JPs in most cases are reluctant to issue large fines even to the amount that's available now, so increasing it to $100,000 or $1 million will make no difference unless they are prepared to render the fines against the individuals when the cases are heard.
Mr Gilchrist: A fair comment historically. Moving to the new tribunal which will be charged exclusively with rental issues and will now have the sort of expertise and presumably the discipline to focus their efforts on making sure that the spirit and the specifics of the bill are adhered to, that issue aside, the historical problems some people may have had -- enforcement is really the question I'm getting at -- on the assumption that fines become a reality, would you not see that as being just as effective a deterrent as an OPRI?
Mr Weinstock: Not on behalf of the municipality, because the municipality has no status before the tribunal.
Mr Gilchrist: But in the real world, if the landlord is faced with a $100,000 fine, for example, would that not be of even greater concern? I know of the problems you've had, for example, on Saunders Road in Scarborough, a chap you've been chasing for 14 years in the municipality under the current situation. It still hasn't gotten him to clean up his act, so it seems to me the status quo isn't working. We're proposing something different, and I just wondered whether you folks had an idea at what value fines would become an effective deterrent.
Mr Weinstock: I couldn't give you a number.
Mr Perrone: I don't have a number, but unless the courts, and especially the JPs, get educated on property standards and bylaw enforcement, we're not going to see the type of fines you're looking for.
Mr Gilchrist: I appreciate that feedback.
The Chair: Mr Marchese, thank you for informing the committee that you would be detained. I assume you're passing?
Mr Marchese: Yes, Mr Chair, and I wouldn't mind giving my time to Mr Gilchrist if he would like.
Mr Gilchrist: I think you effectively just did.
The Chair: I think you just did. Thank you very much for your concern.
Mr Marchese: Did I just do that? Thank you for mentioning me.
The Chair: Thank you very much, gentlemen, for coming.
HOME-OWNED, LAND-LEASED ASSOCIATION
The Chair: The next delegation is the Home-Owned, Land-Leased Association. Fred Cox and Jim Glover are members. Good afternoon. You may proceed.
Mr Fred Cox: Thank you for inviting us. I'm sorry we don't have a handout. We just haven't had the time to do that. Last night and this morning I was still polishing up what I have to say today, so maybe we could prepare it and send it to you later.
The Chair: That would be acceptable, sir.
Mr Cox: Thank you for inviting us here today to make our views known to you regarding Bill 96.
When it comes to housing, the people of Ontario have been divided into three neat, tidy groups: You have the tenant groups, you have homeowners and you have condominiums. A large body of law has been developed and refined over the years to deal with the conflicts that can and do arise within each of these groups. Any real estate agent will be able to explain to you the rules and regulations that go with these three situations.
However, we're here today to represent a fourth housing group that has slowly evolved over the last 25 years, for which there are literally no or few laws to deal with the inevitable conflicts that can and do arise between the parties involved. This fourth group, the majority of whom are seniors, own their own homes but lease the land they sit on.
These homes are in what are called -- they can be called anything. They can be called parks, estates, subdivisions or whatever the landlord decides will help sell his homes. Our homes have been called many things. They've been called trailers, mobiles, modulars, double-wides, single-wides, park models, manufactured and site-built. As a matter of fact, my wife pointed out to me an advertisement yesterday in a seniors magazine. It seems there's a land-leased community north of Toronto that is just advertising they'll build you a brick house with double garages.
Whatever they are called for marketing purposes has no bearing whatever on their size, quality or cost. Whatever our homes are called, they all share four attributes: (1) They are year-round residences, as opposed to seasonal; (2) they're certainly not mobile; (3) they are in a community where the land is leased; and (4) we pay taxes like every other homeowner, in our case directly to the city of Wasaga Beach.
How many there are of us is hard to say. There are over 100 land-leased communities in Ontario, and they range in size from about 100 homes to 2,000 homes. As a result of the many conflicts that are bound to arise between homeowner-tenants and landlords, a federation of representatives from interested communities was organized do see what could be done to solve these problems. The federation is called, naturally enough, the federation of land-leased, home-owned communities. When this organization was formed, it was quickly realized that in most cases -- not all, but in most cases -- the problem was not unreasonable tenants and/or unreasonable landlords, the problem was the lack of laws and regulations dealing with our specific situation.
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The rules and regulations that govern every community are a straight reflection of the personality and the attitudes of the landlord, when what they should reflect is a fairness to both parties as seen by an objective third party. With the understanding that this is the role of government, the federation has been struggling manfully, first, to get the attention of the provincial government of the day and, second, to get some action on the issues that concern us.
The NDP government under Bob Rae did manage to find the time and energy to pass legislation that dealt with some of our problems, and this legislation was inserted into the existing Landlord and Tenant Act. It was less than what we wanted, but it was a beginning and we are grateful.
All of what I've said so far is, of course, background. Now let's deal with Bill 96. Part V deals with us specifically. It is not our intention to deal today with this section point by point. We will leave this to others who will probably submit this in the future. However, there is one item in part V whose significance to us outweighs all the other sections, and we would like to spend our remaining time on it.
Part V states that the purchasers of mobile homes -- and I trip over that term "mobile" because it's so inadequate -- can only be charged the lawful rent charged to the previous tenant plus an as yet undetermined prescribed amount. The prescribed amount will be set out in regulations.
To my knowledge, we have not received any indications to date as to what the formula will be to arrive at this prescribed amount or the basis for this formula, and we've had no indication as to when this will be done. It is of course impossible for us to comment on an unknown. The suspense is very unpleasant for our homeowners, as the marketable value of our homes will be directly affected by any rent increase, let alone a substantial one. We are talking here of a major investment, if not the only investment, of most of our people. Their homes represent their nest eggs.
I would have liked to have come here today with a suggested formula that would be fair to both parties, landlord and homeowners, tenants, but we know that the number of variables that would apply boggle the mind. We appreciate the difficulties that our very existence creates for you as legislators. We are like dolphins caught in your fishing nets: We don't know what we're doing here.
The stated purpose of Bill 96 is to take an action that will increase the number of rental units available for the citizens of Ontario, a very laudable goal. Our members are at a loss to understand how devaluing our homes to any extent leads to more rental units in the province. The only real solution to this conundrum is to deal with us as we really are: a completely separate group with completely separate problems and solutions.
There is no logic to this at all, ladies and gentlemen.
Mr Jim Glover: I was listening to Bud and looking around for a bit of reaction here. Just to add to Bud's conundrum, for 10 years we had a 4% vacancy rate in our park; that's pretty darn low. For the last three years, since the media have been talking about the probable abandonment of rent control, that has now climbed to 10% vacancy. People come in and say, "What's wrong with your park?" There's nothing wrong with our park, but it's an image, so the saleability of the house has gone down as well as the houses being devalued. Years ago they were worth a lot more money than what they are today, and people are worried about it.
We feel a lot of pride in our park. For instance, Bud mentioned about municipal taxes. We pay $1,400 on our home to the municipality of Wasaga Beach. The homes are on foundations. They're connected to the services underground. As he said, you can't very well move them out without dragging all the sewer lines and the electric lines and gas lines with them. So they are not movable.
If it were possible to clear up this uncertainty of the formula, when the formula is in place -- we're not arguing what the percentages should be or anything. We can live with it so long as the uncertainty is out of it. That is what we're after. So a cap in the formula to say the new purchaser will pay so much rent, regardless of what the other one did, that's history. Then at least the home is marketable. So if it were possible to subdivide part V into legislation for these kinds of communities, regardless of whether they're called villages or estates -- ours is called a modular home community because that's what we are; others are site-built homes and they're called a manufactured home community or whatever -- and make a clause for us to pertain. Whatever the park owner must charge for the new occupant of that house once we sell, that's the bottom line.
The Chair: The Chair has one question for you. The property that is leased, how long is that lease, on the average? Can it be anything?
Mr Glover: Ours was five years. Our lease was five years 14 years ago, and it's been month-to-month ever since. That's the case in many of the --
The Chair: So they're not long-term leases. These are generally short-term leases.
Mr Glover: No, but you just continue grandfathering on that basis.
Mr Cox: The answer is that there's no one answer. Every community has their own rules and regulations, and even within the same community. I, for example, had a 10-year lease, which runs out in two years. Others don't have any. It's a hodgepodge.
The Chair: Right. Mr Marchese.
Mr Marchese: I appreciate the worry that you're communicating here. The fact that this as yet undetermined prescribed amount is something that you know nothing about obviously worries you. Have you had any discussions with any of them or the bureaucracy or people in the ministry who might give you a sense of what that might be, or are you still in the dark completely?
Mr Glover: This is why we've come here. We haven't a clue.
Mr Cox: We don't know and if the federation doesn't know, who else knows? There's been no communication, to our knowledge.
Mr Marchese: My sense is that uncertainty is worrying not just a few of you, but most of the people living in their homes leasing land from whomever.
Mr Glover: Oh, yes. For us, for instance, it's a last-ditch effort. There are a lot of people who are 85 years of age in our park. To go into a nursing home -- we have a couple down the block who are going into one -- it's $100 a day for a couple to live in a nursing home in Stayner. That's $36,500 a year. Very few seniors make $40,000 a year gross, let alone that to pay rent. They're worried about their future.
Mr Cox: Their nest egg is their home.
Mr Marchese: We've heard many tenants say the same thing. It doesn't matter who they are or where they are, that is their home. As soon as they get a rental increase they begin to worry. You mentioned that even a slight increase is problematic for most of the people living in these homes.
Mr Cox: They don't mind paying the increase; it's the fact that it reduces the value of the house. We have no idea what it's going to be. If they doubled their rent on us, and this is feasible -- I mean, we think it is, although we don't really know -- that reduces the value of our houses right off the bat because the two equate, they're related.
Mr Glover: As we've read it so far, it says, "a formula yet to be determined," and our park owner has said that anybody coming in will pay much more. We don't think it should be just left open like that. It should be established in the legislation: how much, what percentage factor. We're not arguing with the price, just to get the uncertainty off. That will clear it up for most of us.
Mr Cox: We might argue with the price when we hear what it is.
Mr Glover: But the uncertainty is our problem.
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Mr Gilchrist: Thank you both, gentlemen. Hopefully, we can allay some of your concerns. First, as I'm sure you're both aware, this provision only covers your comparable situation to what's being considered vacancy decontrol in apartment buildings. So this would only be something that affects you when you sell.
Mr Cox: Yes.
Mr Glover: Yes.
Mr Gilchrist: The minister has, publicly and on a number of occasions, speculated that an amount no greater than $50 is what he's looking at. Quite frankly, Mr Cox, you asked what is served by coming here. We would very much like to know from you people, who are most familiar with how costs have gone up and also how services have or have not been maintained, what you think a fair formula would be. Or should it be a stated dollar amount? That is the number we have basically set as the upper-end benchmark, but we're open to suggestions from you folks, and again, only the one-time occurrence when you sell your house.
Mr Cox: Yes. That's the problem. But that's the first time I've heard that figure. I know you're going to be hearing from the landlords, the people who own all of these communities in Ontario, and they're going to have their views on that too.
Our problem in even thinking about a possible formula is the differences. These things have been built over 20 years. The first ones that went in over 20 years ago were a certain type. Then the next group that went in were a little bit more expensive and a better type. As these were sold, then the next section went in. They are all different.
These were built up without any rules and regulations. The only rules that did apply were the municipal rules as to construction and so on. But these things have just developed more and more because they provide a great lifestyle for seniors. We're all together, we have our clubhouses, we have our swimming pools. Well, some do, some don't, but the variety of communities is amazing. Some have million-dollar clubhouses; others don't have any.
Mr Gilchrist: That's why we'd like to hear from you, for your specific community, and as an association, what you think would be appropriate, either a percentage or something tied to capital improvements or whatever. We're open to any suggestions you care to make.
Mr Cox: Okay, we're glad to hear that. It's a mind-boggling job, as I said. Nevertheless, we'd be glad to give you some input on that one.
Mr Gilchrist: I appreciate it. Thank you, gentlemen.
Mr Glover: Just one final comment on that, and we will do that, but the value of our home, as opposed to the value of the lot it sits on, is more than five times. That was well established by the park owner, he totally agrees, and yet we don't have a say, which is why we're looking at the uncertainty.
The Chair: Mr Klees, we're going to have to move on to the Liberals. We've got one more question, gentlemen. We've saved the best for last.
Mr Kwinter: I think you really put your finger on the problem in that what has happened is that this type of accommodation has evolved without any regulations or rules. When they were first conceived, they really were mobile homes. People had a mobile home that they put on a lot, and the expectation --
Mr Cox: They had wheels under them.
Mr Kwinter: Yes, they had wheels under them, and the expectation was that next year or next month or next week, whatever it was, if they decided they wanted to move on, they just hooked up and they moved it off. That is no longer the case. These are permanent structures.
Mr Cox: They are on foundations.
Mr Kwinter: On foundations, usually with city or municipal services in there. So conceptually there's not a great difference between them and a pre-fabricated house on a lot. It's just that you've got this basic concept of the rental of the lot.
I agree that this should be taken out and have separate legislation to deal with that kind of ownership, because it really is unique.
Mr Cox: We're not tenants, we're not homeowners; we're somewhere in between. We're fish and fowl. That's the problem we've been dealing with for a long time and it causes a lot of problems. What laws do you turn to when a conflict comes up? It's great for the lawyers and the courts, but not very good for the people who live in these homes.
Mr Marchese: With all due respect to the lawyers here.
Mr Cox: I like to see you make a good living but, you know -- thank you.
The Chair: Thank you very much for coming.
ST JAMES TOWN TENANTS' COUNCIL
The Chair: The next delegation is the St James Town Tenants' Council, Cliff Martin.
Mr Cliff Martin: I think there might be some confusion. I represent the St James Town Tenants' Council, but speaking to the clerk, I also represent the public housing Fight Back campaign, and I'd like to speak on both issues.
The Chair: Well, sir, you've got the same amount of time to speak on both those issues.
Mr Martin: Okay. I'll start with public housing first. In the province of Ontario, there are 84,000 public housing units; in Metro, that's 34,000. In Metro, more than in the rest of the province, there is a fairly high turnover in housing as people move, immigrate from other countries or improve their financial condition, and what we have seen is that a lot of these people have already taken a second look. In my own community within St James Town maybe 25 or 30 people a year would go out and rent a house. They don't find that affordable now. In speaking with a group of tenants from just St George-St David, it's become clear that most of them are waiting to see what happens with Bill 96 and rent control. Most of them are coming from something like $500 or $600 a month income, maybe moving as working poor to $1,100, and then as a family later moving into something that could cost them as much as $1,000, $1,200 or $1,500 a month.
I guess my issue is that with the number of tenants moving from public housing or social housing into the private sector once Bill 96 goes through, there will be less of them. They won't be able to afford them. What will happen is that the 70,000 people provincially who are on the waiting list for affordable housing will be stuck there. Actually, they'll go even lower, because right now they can afford something as it is -- maybe it's a room -- but these 70,000 people are going to be staying. They're not going to be moving into a co-op or a non-profit or into public housing.
I remember John Robarts years ago telling me that what he found in Britain and the United States were two important principles. People need to be housed. Even above anything else, people need to be housed. He is responsible for much of the public housing that was built in this province during his years.
The St James Town community is a community of 17,000 residents. About one fifth of them are public housing residents; about 750 of them are subsidized units. Those are in private buildings, by the way. What would happen if their rents were increased or they moved and those rents were increased and there was some sort of subsidy still? The other side of your government, Comsoc, would be stuck with paying the maximum of Comsoc to house these people as the rent control goes up.
Look at this from another view. For those people who are living in subsidized units and in public housing units, the piece of legislation with respect to the landlord being able to check these tenants out, whether they can afford the rent or not, I think would be discrimination at its highest, because we already know those people are working poor, seniors, single mothers and fathers, disabled and so on.
Also, with respect to Bill 96 as a protection act, currently in OHC or the Metropolitan Toronto Housing Authority, the Landlord and Tenant Act covers those tenants now. Under Bill 96, I think it would be doing more damage to those tenants than it could to any tenants in the private sector.
I sit outside of courts at the district court where they hold these hearings on landlord and tenant matters and I'm really glad they haven't gone to any tribunal. I mean, these judges who are sitting there are in a high court for a reason. Britain, France and the United States 80 years ago decided that for the tenant or for the landlord, their home was their castle. Once that tenant was in there and paying his rent, he had the right to the highest court he could get, and that's why it's here now. That's why these eviction matters and landlord and tenant matters are going before a higher court, because that's where they belong. Relegating them to some sort of tribunal seems to be demeaning the tenants.
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In 1994, as a member of United Tenants of Ontario, an Environics study came back which indicated that tenants didn't vote much. Only about 28% of tenants province-wide vote. I think that speaks to the election in 1995 in many ways.
In St James Town we had a problem. I remember reading Hansard. Rosario Marchese had asked a question to the minister, and I think the question went like this: "If there are work orders out against the landlord by the city, would they still get their rent increases?" I think it was avoided. The rebuttal the second time: "If there were work orders outstanding against the landlord, would they still get their increases?" The answer was that there would be tools to deal with that.
I don't see any tools to deal with anything, personally. Even in public housing, it appears that the inspectors who come out don't care much because it's government-owned housing. They usually side with landlords in the first place, and the number of times that we've actually had to subpoena and pay for these people to go to court just so a resident wouldn't get evicted because the truth was that the landlord was substandard in his repairs is amazing. They want $75 just for an hour.
In St James Town there was a landlord you might have read about in the paper some time ago who was just refusing to make any repairs, and he had bought up most of St James Town. For those who are not familiar with it, it's at Sherbourne and Bloor and runs down to Wellesley. There are 17,000 tenants living in 18 buildings there.
What happened was that we had our Metro councillor and our city councillor going to bat along with the tenants' council, trying to get this landlord to make some repairs. The MPP for the community, Al Leach, sent out some sort of form document that indicated, "Are you paying for air conditioning retroactively?" or a dishwasher, or this and this. The tenants thought: "This is good. Our MPP is right onside." They filled these out and they sent them to him. He had indicated when he met with the tenants that he would be on their side and so forth, but he's the Minister of Housing and it's a conflict of interest. What happened to that list was that it was made as a resident list for St James Town for mailers and so forth, but as an MPP, going through cabinet or in any other way, nothing else happened. It took a year and a half before these people saw anything in the way of repairs.
That means if a landlord was guaranteed or given an increase or even was entitled to an increase, those orders would still be outstanding, as they are now. There are no tools. There's nothing in the legislation that says anything different. They're going to be in the same situation. There's nothing there. I think the 72% of the tenants who didn't vote in 1994 or 1995 will certainly be voting in the future. It's bad when people get to that point where they just feel they can't do anything in the community, but we've found in Toronto not only from some homeowners but from most of the residents, something like 90% of the residents, that they would be voting in the next election.
In the situation in St James Town where they are now getting some repairs and then that has stopped now because there's a new building owner, there are no tools at the disposal of Metro or the city of Toronto or any other municipality in the province that could rectify that. The landlord would get his rent increase, and that's it. The current guidelines would take him to court. The St James Town Tenants' Council has taken the landlord to court and still the rent increase goes through. There's no current or future legislation that indicates anything of that nature.
I might also tell you, for those people who are living in private housing, that in St James Town they are paying probably no more than $600 for a one-bedroom apartment. We do find ourselves having a diversity, a multicultural community that actually cohabits quite well. Yes, they are living in a low-rent neighbourhood and their neighbours are people who live in subsidized units, subsidized by the province. Nevertheless, they are living in low-rents.
Because there is such a high turnover in St James Town, period, what is going to happen to that community once rent control goes or comes in in a certain way would be that these new people will be paying more rent for less security of tenure and there will be no repairs done to their houses now. I could have brought with me today plenty of residents who haven't had their apartments looked after in the whole year and a half that it has taken to come to both the rent control and the city or Metro. These tenants haven't had any work done. There's a new landlord now. Nothing is going to happen to them in the future.
With the working poor, out of $1,200 a month, currently paying $600 doesn't seem too bad, but having to move into another community, they are going to be fined just because they decide to move.
In Britain, France and the United States, where the landlord and tenant act has been held very close to the heart, they wouldn't dare move any of that kind of legislation in those countries. The different states that have have done so because of the kind of communities they have there. In the southern United States where they've done that, and I think in New Jersey, they have a very ultraconservative look and they have what you call the other side of the tracks. I thought that was something this Conservative government was going to get away from. I thought they were going to get into one community. Instead, what they've done is they've basically picked up the hammer, as other communities in other countries have done, and they've actually said: "Oh, no, we're going to create this. We're going to create a slum." I can remember Al Leach, after first becoming minister, saying that St James Town and Regent Park and Jane and Finch and places like that were slums and they were going to rectify that.
I made a presentation to Mac Carson with the Advisory Council on Social Housing Reform. It appears that the way that committee is going, they are going to be going into rent supplement units for the tenants who live in housing or those 70,000 people on the waiting list. For those people who are on FBA and GWA and mother's allowance, that will more than maximize the money they get currently. In most cases these people aren't going to be able to afford it. Most tenants who are living in St George-St David are already spending that money on rent, past the maximum. They are getting into their food money now. I'd hate to see what happens when this legislation comes through not considering people who are living in social housing, not considering people who are on mother's allowance, but instead having the landlord turn around and say: "I'm sorry. You can't move in."
Ian Scott, the previous Attorney General whose riding was St George-St David, had actually paid some people to go to see some landlords about renting apartments. The discrimination is already there. If a woman and a child who are on family benefits come there, if they are getting $1,000 and the rent is only $300, and if someone who is working and is getting $1,000 comes to rent for $300, they are already renting to that individual person. The discrimination is already there. These cases that I'm talking about, that Ian Scott did, all went to court. Whether they were racially motivated, by colour or by economics, they were convicted.
What's going to happen now is that the kind of discrimination, the type of ghettoization, is exactly like it is in Detroit. I went to the University of Michigan for four years. I was in Detroit about every third day and I saw this kind of thing. I saw what happened when they had a megacity made out of Detroit. I saw what happened when the tenants not only in the Detroit Housing Authority, by which I was employed for a short time, but also who were ghettoized, where the landlords could no longer afford to run the buildings, they burnt those buildings down. They burnt those buildings down in St Louis, they burnt down buildings in New York.
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Mr Leach talks about Cairo and France and New York and what's happening there. Cairo's a city that is catch-as-catch-can in the way they deliver their services and the way they implement their laws with respect to one thing or another. They don't even pretend to be a model for anybody. In New York one of our staff members for the public housing Fight Back campaign has worked in a quasi-public housing area in the Bedford-Stuyvesant community where there are 20 buildings and about half the tenants there are on a voucher, which is like a rent subsidy, and the other tenants are living there because it's low rent. The discrimination and the kind of community and the ghettoization that's happening there now only speaks for itself. In France we can't really call that a city because even the lowest cleaner's paycheque comes from France; it doesn't come from the city of Paris. It's a federal city. So those three comparisons, which are the only three comparisons that Mr Leach met, are certainly all out the window. Thank you for your time.
Mr Kwinter: In your tenants' council, what did you estimate the turnover is in St James Town?
Mr Martin: Not 4,000 units, but 4,000 residents per annum.
Mr Kwinter: What is that percentagewise?
Mr Martin: It's more than 25%.
Mr Kwinter: Effectively, with the provisions in the new bill, in theory not in practice because it isn't the same people who are turning over, every four years there will be no controls on the old system, just controls on the new system, so all new rates will then fall under a control. What is that impact going to be on the makeup of the people in St James Town?
Mr Martin: It just happens that most of the tenants who are moving are the same ones. In other words, we have a stable population of about 67% to 70%, and it's almost the same ones who either find more money or are grossly underhoused and have to move. These people are already thinking that they're going to have to move. Instead of a two-bedroom they're going to have to take a one-bedroom; if they are in a one-bedroom, then they're going to have to take a room. I don't share the discrimination of most of the members of my community, where I see eight or nine people living in a one-bedroom.
The federal government funds a program in which half the money comes from the province, half comes from the federal government, and not everyone is able to apply. They're all legal but there isn't enough housing. There's only a 0.5% vacancy rate. I suspect that if there are nine or 10 people living in a one-bedroom now, that will just increase. Seventeen thousand tenants is way over what there should be legally. I think legally there are supposed to be something under 13,000 there.
Mr Marchese: Mr Martin, the government, through the minister and all the members here, continues to say that what they need is a balanced system, that the system is broken and needs to be fixed, that they need to find some balance because it was tilted too much to tenants in the past, that they've got to restore that, help the landlords out and bring about some equilibrium. Is there anything in this bill that somehow is going to make the problems you've experienced in St James Town any easier? That's what they say they're going to do: This bill is going to help you out a little bit. Is there anything there that's going to help you?
Mr Martin: I think it's the other way. I only could afford to buy the first reading, but I looked there and I thought, "Okay, there are some issues covered." But what came to mind was that it was going the other way.
I can remember under Bill Davis when these people, this rent control group, usually had at least one developer on it, maybe one bureaucrat and maybe another homeowner, and there wasn't a balance. As the government progressed or as legislation changed back then, there seemed to be a balance, and maybe -- I don't know how -- it would go towards the tenant's side. Landlords have always found a way. There's a landlord agency in Toronto that landlords can go to about tenants.
I've been working for legal clinics and so forth off and on and as a paralegal for almost 30 years. If I was going to take a tenant to court, I could certainly get him out under the current legislation. I wouldn't have to have the bill the way the first reading reads. There's no need for that. That has allowed the landlord to go to court, certainly with no lawyer. If you go to district court now you'll see that almost every tenant has a lawyer and the landlord doesn't. It's balanced now. If you were to sit outside a landlord and tenant courtroom now and speak to most of the landlords, they're actually making deals with their tenants and keeping them in. Unless they really hate them and they're causing a lot of trouble, when it comes to evictions and that sort of thing, there are a lot of minutes of settlement going on. They're not evicting much.
Mr Gilchrist: Thank you very much, Mr Martin, I appreciate your presentation here today. Just as an aside, it's not at all unusual that they don't even print second reading or take quite a while to do it because nothing ever changes after first reading. First reading will give you the same text that we're working off here today. Also, I should mention to you that this bill, as all others, you can find on the Internet. Any of the libraries in Toronto give you free access to that.
I have a question, whether your council has ever looked at an issue that would seem to me something as important and contentious as anything we're debating here today, and that's the unfairness about the current property tax assessment on apartments. Let me start off by asking you, are you aware that here in downtown Toronto the city of Toronto charges as much as 6.2 times as much as what it would charge for a single-family home?
Mr Martin: Yes.
Mr Gilchrist: Have you made representations to Toronto, or are you aware that we have now changed the property tax act?
Mr Martin: Yes, I am. As a matter of fact, even public housing tenants who live in that community were supporting the landlords on that issue. What's happened with the new owner buying up more than half of St James Town, he doesn't seem to care. He has a history of tearing down and building condos and that type of thing, so he wasn't aware. But Marvin Sadowsky, who is on the board of MTHA and was with Cadillac before, we supported him then because most of that was going into the tenants' rent. We had a little trouble persuading tenants that they should support this. I mean their rent could come down dramatically.
Mr Gilchrist: Very much so.
Mr Martin: Yes. I think there were only a few communities involved with that. We got posters, we put them up. We spoke on the issue years ago when it came up then. We were trying to reach landlords with respect to that and what kind of moneys they're going to have to pay for public housing at the same time. We're now finding small ratepayers' associations to speak to about both issues, about the rental stock and how much they're paying for that and do they think that Metro should be supporting public housing, because of course we're meeting with the federal government now.
Mr Gilchrist: So you see this as a step forward.
The Chair: Thank you, Mr Martin. Unfortunately we're out of time. Thank you for coming.
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ROBERT KERNERMAN
The Chair: The next delegation is Robert Kernerman. Good afternoon, Mr Kernerman.
Mr Robert Kernerman: Good afternoon, Mr Chairman, members. I'm a manager and owner of a mobile home park. I heard not the last delegation but the one before that, which was the tenants' group. I have here today some handouts that I've distributed and I'd like to get right into some of the problems we have.
First, I'd like to talk about some information which you have which is called A New Direction. Perhaps I can just refer to page 4 on that, which has to do with land leases. We're talking here about land leases. I'm also a member of this organization which is the Ontario Manufactured Housing Association.
The last paragraph on page 4: "The Minister of Municipal Affairs and Housing has said many times that the current rent control system is not working. That is especially true for mobile home parks. The majority of mobile home parks in Ontario are in a serious financial bind, and the problem is chronically depressed rents."
If I can just stop there for a minute, I wrote the minister -- you don't have a copy of my letter, but you do have a copy of his letter -- in September and again in January, and I said in September -- I'll just read it because I think it's quite clear:
"Mobile home parks have characteristics of self-contained urban communities. Although municipal mill rate increases have been averaging 8% per annum, mobile home parks have received much less in net average yearly increases. This has left most older parks in a precarious financial condition with debt-heavy balance sheets." I speak from personal experience, because I'm just in the process of refinancing a mortgage, which I can assure you in mobile home parks is almost impossible. "The average monthly rent" -- this is net -- "is $125 a month" -- that's after taxes and water -- "which is extremely low."
Then I continued on in my letter: "The present rent control legislation does not take into account the need for parks to survive and to protect the investment of the tenant in his or her manufactured home. This home can average between $45,000 and $160,000. Surely all parties must agree that the tenant's investment, as well as the land owner's, must be protected."
I just want to branch off here for a second. What used to be called Cedar Grove mobile home park, which is in Mississauga on Dundas Street, apparently had rents of approximately $200 a month. I understand from Mr Brothers, who is the head of our organization, the Ontario Manufactured Housing Association, that this park was sold to a non-profit corporation from Peel region, and the rents went from $200 to $375 a month because they're exempt from rent controls. As well, each resident, as I understand it, has to pay an upfront fee of approximately $5,000 to $7,000.
I'm not saying that we're moving in that direction ourselves; I'm simply trying to point out to you that after 20 years of rent controls, when you have a very small base, you're strapped for cash, you don't have any money, and if you can borrow it when you have a very poor income and expense statement and you have a very heavy debt-loaded balance sheet, you're doing very well with your bank. I can tell you, as I say, from personal experience.
If you come into the picture and you have something like this, which is the Village by the Arboretum, oddly enough, where the land is owned -- I can give you this, Mr Clerk, if you want to take it, because this relates to the other handout I gave you which talks about phase 2, where I can talk about the rents.
The Chair: This will be passed around to members of the committee if you only have one, sir.
Mr Kernerman: Okay. This is an upscale retirement community in Guelph, which is owned by the University of Guelph, which the majority of us will probably never get to. Anyway, you have to appreciate what's happening out in the marketplace. If you look at what I have in the handout here, which says "Phase Two: Fully Detached Homes," I'm not getting into the price of the homes, but what I would like to point out is on page 5 -- this is all the sales information -- where you get into the rents and they talk about monthly carrying costs.
For a 50-foot lot, you'll see the total is $769 a month; a 40-foot lot is $654 a month; town homes are $524 a month. Our rents are about $215 a month, so it's extremely difficult to make a go of it. What I see happening here, and I think you'll be hearing from Mr Brothers in London -- he's trying to get on the list so he can talk to you, and I don't know if he can get on the list, but with your assistance, perhaps you can squeeze him in when you go to London -- you'll find that a lot of our owners who belong to our association, who have these chronically depressed rents, their communities are going to slide into the same example as Cedar Grove where you're going to find that the infrastructure is going to be in a very poor condition.
I invite you, incidentally, to drive through Cedar Grove, but I don't think you should drive through it, you probably should walk, because the ruts and the potholes are such -- very seriously; I'm not being funny -- that you could do some serious damage to your car. I happened to go there myself with my family just driving around. We were driving around Mississauga on Sunday, and I was quite upset because the previous owners used to be very meticulous in what they sold and what they did. Of course they're in their eighties and they sold out. I think there were some financial problems and in order to keep all the tenants in place the region of Peel stepped in.
What I want to suggest is that the mobile home parks that have chronically depressed rents and are at the low end of the scale, that's the direction they're going. They're going to eventually either fold up or end up with a non-profit taking over and it's going to increase the rents dramatically.
To protect everyone, you should really consider some of the provisions that Mr Leach has in his letter to me dated April 7, a copy of which you have. If I can just read part of it here, I talked about a one-time charge of $50 a month, which I suggested to Mr Leach would be probably appropriate to help us survive. I have my letter to him of January 9: "Annual statutory guideline increase: allowing a one-time option for landlords with monthly rents under $300 a month to charge a $50-per-month rental increase in lieu of the annual statutory guideline increase. Credit institutions will not generally approve capital loans to mobile home parks for infrastructure upgrades. If additional revenues are forthcoming, these capital loans will be more available and will allow a general upgrading of these self-contained communities."
His answer to me was, on page 2: "Allowing a one-time charge of $50 for sites renting for less than $300 in lieu of the annual guideline rent increase may, on the surface, appear to be a way to address the problem of depressed rents. However, it would be extremely difficult to apply such a provision universally to all parks throughout the province. While a monthly rent of $300 may represent a depressed rent in some parks, it is not reasonable to apply this reasoning to all parks." He's quite right, it isn't reasonable, but it is affecting us. "Determining whether a rent is depressed or not is largely dependent upon the range of services and facilities provided to residents." Then he goes on to talk about some other matters.
In any event, we are really being hit hard by these rent controls which have been in effect for -- as I recall, they came in in 1976. But then legally I found through one of the counsel who specialize in this particular matter that the mobile home parks weren't really under it until about the mid-1980s. There were some technical problems, but we're under it now, and I'm suggesting to this committee if you can recommend to the government that mobile home parks with rents which are chronically depressed, under $300 a month, be exempt from rent controls.
We're not out to push people out into nursing homes. I think in the 26 years that I've been involved in this business I've had one tenant I evicted. There was a domestic dispute and there was a split-up in the family and the individual just didn't pay his rent for six to eight to 10 months. So we got an order and we didn't even want to enforce it, but he continued not to pay his rent. I'm going back into the late 1970s. I think we finally moved the home out and we got some money and we paid everybody off, including him. Normally, we have maybe one or two tenants who sometimes drag their rent for three to six months if some personal thing comes up. As long as they tell us, we work something out with them. I don't think it's the position of any of the chronically depressed mobile home parks to evict tenants to bring someone else in.
What we're finding now is that our balance sheets are distorted. We're having a problem surviving downstream and some of us really don't feel we should carry on with this because of the financial constraints we have.
There is one other provision I'd just like to address briefly, that in the event there are capital improvements that have to be passed on for environmental upgrades, we suggest that this go right to the staff of the ministry rather than have a tribunal hearing, so long as we can show that the municipality has ordered us to bring in a water or sewer line or some such other thing and what our costs are. Our submission is that this should be sufficient and we don't think we should really have to spend three or six months at a tribunal hearing and not get the income in to pay our local improvement costs or whatever other costs we have to pay to the municipality.
If you have any questions, I'd be happy to answer them.
The Chair: Sir, we'd like to ask you some questions, but we've run out of the allotted time. So thank you for coming and we will review the documentation you have given to us.
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RENT CHECK CREDIT BUREAU
The Chair: The next delegation is the Rent Check Credit Bureau, Henry Verschuren. Good afternoon.
Mr Henry Verschuren: Good afternoon. Thank you for allowing me to be here today. I'm the vice-president of legal services of a credit bureau whose head office is in Toronto. We have offices in London and Ottawa as well. We are a credit bureau for landlords. My department specifically handles the legal side of that, applications before the Ontario Court (General Division) and before the Ministry of Housing and its rent control program.
I have passed out some written submissions, and what I'd like to do is to highlight the main points of the amendments we are suggesting. The main points start on page 3.
What we are looking at in the first subheading there, "Equality before the law," is that there are aspects of this bill that I think are good on their own, but need to be applied to both parties. For example, harassment: I can understand why that clause is there, it needs to be there, but it is applicable against landlords and for tenants.
We have to dispel one major myth and that is that the majority of landlords in this province are the giant corporate landlords. I have checked with the Ministry of Housing's rent registry and they indicate that over 80% of landlords in this province have eight units or less. We're talking about small landlords, and I don't mean anything critical when I say "small" landlords but with respect to the number of units. These people -- I can speak from experience in terms of some of the cases I have conducted before the courts -- also need protection from harassment from tenants. I do not suggest to you that there should not be a harassment clause there, but I think it could be applied equally to both parties.
Also, there are other lesser clauses, if you will, in this bill that need to address the same thing. For example, there is one section where a tenant can count February as 30 days when giving notice to a landlord. I suggest to you that apply to both parties. It's simply equity.
I'm very concerned with respect to section 40. Section 40 talks about disposing of tenants' property. I think the intent here is that a tenant who's about to be terminated knows and understands that they have to move. Under the first couple of categories there -- take a tenant who's abandoned the premises, for example -- that's absolutely correct. However, clause 40(c), where a tenancy has been terminated by the tribunal, is a different matter.
From a practical standpoint there's a problem here. The tenant will get a notice from the sheriff, but that notice, although specific, is in actuality only approximate. In all cases the sheriff, if the sheriff needs to come, will not come on the day they've said. They will come a few days later, and that's the process. So the tenant's not really aware that the sheriff is going to come that day and lock them out. They could go to work or go out somewhere and come home and find not only their locks changed, but under section 40 the landlord now has the right to dispose of all their possessions.
I've made some suggestions to give the tenant some notice of that before possessions are disposed of under those particular circumstances. Again, equity is what we're looking at here.
I'm also concerned with respect to a change from the Landlord and Tenant Act that requires payments of rent into court. Under the Landlord and Tenant Act, subsection 113(6), if there is a dispute to an arrears-of-rent application -- and this is important because this is the only circumstance this applies in -- and that dispute alleges a breach of obligation, then the tenant must pay the arrears of rent in the court, or the tenant must file receipts for work they've done that the landlord should have done, or they file an affidavit indicating payments they've made.
Most people know about the provision about paying rent in the court and that's all they think of. But there are also a couple of other options there that are viable. Of course, the focus for this and the intent of that section is to prevent frivolous disputes that would unnecessarily cause an action to proceed further than it should in the courts.
In Bill 96, what's happening is the wording is such that it allows an unspecified sum to be paid into court at the discretion of the tribunal member. They have discretion about whether or not money is going to get paid in and about how much is going to get paid in. A specified sum need not be rent. It could be. I can foresee motions being made by counsel for landlords that will say, "We want security for costs because we think this is going to take a while," and under the current wording that's an entirely acceptable motion. It's not acceptable under the current system under the Landlord and Tenant Act. As a matter of fact, there are case law decisions of the court that have said, "No way." But that could happen. So it may not be just rent that has to be paid in the court. It could be other sums for other things that get paid into the tribunal, I should say.
I'm also concerned about the tribunal getting overloaded and backlogged very quickly because of the number of disputes that I think would get filed if you don't have that clause in there. Keep in mind that this does not in any way negate the tenant's right for remedies. They can still file an application with respect to any alleged breach of obligation and these provisions wouldn't apply.
Before I go on to questions, I will deal with one other issue and that is the monetary jurisdiction of the tribunal. Subsection 182(2) sets out that, whether you be a landlord or a tenant, if your claim is higher than the monetary jurisdiction, your rights to the remainder are -- "extinguished" is the word that's used. Why? What I'm suggesting to you is that the tribunal can certainly, at the very least, make a finding in terms of what's outstanding -- I believe we're talking about $10,000 -- or sorry, the Small Claims Court limit, which is now $6,000. In the past several months in court I've gotten judgements for $72,000, I've gotten judgements for $10,000, $16,000, $8,000. On all of these the landlord would have to extinguish their rights with respect to the balance outstanding.
There is no reason why under the current rent control system, for example, if there's a finding by a rent control officer that a landlord owes a tenant in excess of what they can order him to pay, they nevertheless record that and the tenant is free to take their remedies either in Small Claims Court or the General Division to recover that money. But this extinguishing of the monetary jurisdiction rights affects both landlords and tenants equally. There will be landlords who will lose money on that, but there will certainly be tenants who will be losing money on that as well.
The rest I have left for you to consider.
Mr Marchese: Your concern, I think from the outset, was that these are some provisions to protect tenants from harassment from landlords.
Mr Verschuren: Yes.
Mr Marchese: And your worry is that there are no provisions to protect landlords from harassment?
Mr Verschuren: Yes.
Mr Marchese: So you consider what's in this bill to be, by and large, protection for tenants possibly?
Mr Verschuren: No, I think it's more correct to say that I see aspects of the bill where there is tenant protection but no landlord protection. I wouldn't categorize the entire bill as protection only for tenants. I will say this though: There is a significant difference now with that bill. Fundamentally, what tenants want is protection from arbitrary rent increases. What you have now in the province is most landlords are charging less than the maximum rent they're allowed.
Under the current system, guideline increases apply to the maximum rent, so I could, if I were a landlord, increase the rent from what the tenant is paying to the maximum plus guideline. That could be a double-digit rent increase. Under the new system, under Bill 96, maximum rents are frozen and guideline increases for decontrolled units would be guideline on what the tenant is actually paying, so there is a significant amount of protection there for tenants. But overall I think, outside of the two issues I raised, it's pretty fairly balanced.
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Mr Marchese: In your experience, have you seen where the landlord might have more power than the tenant, by and large? Have you ever seen any abuses by a landlord who might exercise that power that he or she might have and the tenant might find himself or herself at the mercy of that power, or have you never seen such a case?
Mr Verschuren: I've seen cases with both. Keeping in mind who landlords are -- most of them are not the big corporate landlords -- you do see the balance of power on the side of the tenants because of the personality and what interplays there. I think it's correct to say that I've seen both scenarios where landlords have abused their power, but tenants also with landlords.
Mr Marchese: That has not been my experience. By and large, most of the people we listened to last year when we toured the province -- and again, most tenants are very vulnerable, with those exceptions. We might have a number of individuals -- it's hard to express by number -- who could be abusive with any landlord, small or large, and it might be very difficult to deal with those people. There is that too. But by and large, our experience, and mine, as limited as it might be, is that they are at the mercy of landlords and what we have experienced here is the problem with large landlords.
We are not talking about some of the people you talked about, people who have four units or six units. The ones I've heard about in terms of the big problems are the ones who own 20 rental apartment buildings and so on -- 25, 30, in that range, anything more than eight units. This is what I thought this bill was getting at because it doesn't deal with the smaller landlords who might be facing different kinds of problems.
My experience is that many tenants need protection and this bill, though it's called the Tenant Protection Act, offers them very little protection. So though you come here representing landlords, in my view, landlords have a lot of protections here and tenants have very few.
Mr Verschuren: I think if you compare the offence section of Bill 96 to the offence section of previous legislation, you'll see that it has probably tripled. Fines are greater. There are clauses such as the harassment clause that is in here that you've never seen in any other legislation in this province. There are a lot of protections built in here for tenants.
Mr Marchese: Other than the harassment section, which --
The Chair: Thank you. Mr Gilchrist.
Mr Gilchrist: Thank you, Mr Verschuren. Indeed you have made a number of other recommendations -- they look like they total in the dozens afterwards -- and we will certainly give them consideration.
We've heard from Mr Marchese and his opinion, but I appreciate that you've come before us here to paint a bit of a different picture.
Mr Marchese: Neutral.
Mr Gilchrist: He was very neutral and I think he should be applauded for the balanced approach he took to this. Having had the exposure you've had to both large and small landlords, is it fair to generalize them as the ogres that are being painted by many people in this, or is it more appropriate to say that this bill really does try to find that balance? Obviously, if we were sitting here and landlords came in and said they loved every section or tenants came in and said they loved every section, we would have written a bad, unbalanced law. Would you agree with that?
Mr Verschuren: I agree. I think as long as both parties are screaming at you, sir, you are doing your job.
Mr Gilchrist: Hopefully, we can minimize the screaming and it'll just become muttering. Seriously, you made a couple of comments about the tightening up of the offence sections. Earlier this afternoon we tried to elicit from another group their thoughts about whether fines have the same deterrent effect as OPRIs, for example. I don't know if you have put your mind to the specifics in the section of this bill, but if you have, I'd appreciate your comments on whether you think this is an effective way to make sure landlords continue to maintain proper health and safety standards.
Mr Verschuren: In my experience -- let me divide up the answer here -- smaller landlords don't understand what an OPRI is and generally don't increase their rent as often as larger landlords do anyway. But a fine they understand, and with larger landlords I find the same thing. What they are out to do is preserve their maximum rent because that's what the basis of their financing is. When they go to the bank to get loans to do capital work, the bank is looking at what the maximum rent is. So an OPRI affects rent increases but not maximum rent. They are far more worried about fines, especially the corporate ones, because they are a lot larger than the small. I think the answer is yes to both, that fines are more effective, but for different reasons for both.
Mr Kwinter: I'd like to talk about something you didn't talk about in your verbal presentation but it is in your written presentation. That's the issue of pets. I really found it interesting that there are provisions where the criteria deal with inherent characteristics of the breed of the animal or past behaviour of animals of the same type, regardless of the specifics of a particular animal, which I find absolutely abhorrent. It's the worst form of discrimination, where a class or breed is discriminated against solely because they have a perception that that breed or class always does the same thing. Could you elaborate on that?
Mr Verschuren: Sure. The criteria in Bill 96 were lifted straight out of the Landlord and Tenant Act, pretty well verbatim, and the Liberal government of Mr Peterson put that into effect. The reason for that is because there was a court case, Cassandra Towers v Ryll. In there, a tenant was evicted simply because they had an old, blind, lame cat. They had a "no pets" provision in their lease and that was the basis for the eviction. The cat wasn't causing a problem to anyone.
The response to that was that the Liberal government amended the Landlord and Tenant Act to state that you can no longer evict someone relying on a "no pets" provision in the tenancy agreement. But they went on to say that if you're going to evict someone for substantial interference that's related to control or behaviour of an animal, then you must meet the following criteria: You must prove that that animal has caused a disturbance and then you must prove that that breed is inherently dangerous or that it causes an allergic reaction or that the past behaviour of other animals of that species has caused problems. So it's not enough to prove that this dog has bitten somebody; you also have to prove that other dogs have been a problem. If you prove that that dog has bitten someone, but not others, you don't get the eviction and you still have the problem remaining on hand. But that's where it came from historically: from the last Liberal government.
I agree with you it's abhorrent. I think what should be done, and what I'm suggesting in my written submissions for Bill 96, is that the test be if this animal is causing a problem, that's all there is to it; you don't need to get into all the rest of it. If this particular animal is causing a problem, then we treat that particular case.
The Chair: I think with pets we'll stop this, sir. Thank you very much.
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RICHARD FINK
The Chair: We'll move to our next delegation, Richard Fink.
Mr Richard Fink: If I could refer the committee to the handout I provided to the clerk, more particularly the last page, which I've highlighted, perhaps I could just give the background to this case.
The tenants at the Balliol Apartments, which is a high-rise apartment unit at Yonge and Davisville, more particularly on Balliol near Mount Pleasant, containing some 400 units, was under a rent review application as well as a notice by the landlord that he would be replacing, among other items, all the kitchen counters and hardware, along with the windows. The tenants were of the view at the time that particularly in relation to the kitchen cabinets, which were in good and/or excellent condition, the repairs were a subterfuge for a rent increase under the then fairly liberal guidelines allowed.
For the first time in the British Empire, tenants actually brought an injunction not to have their apartments repaired but to prevent the repairs as an unwarranted and unwanted intrusion into their privacy. This injunction was upheld by three judges but overturned at the Court of Appeal on other grounds. The Court of Appeal, however, did give its consent to the clause which I highlighted, which I'll take a moment to read. This is Mr Justice Hollingworth of the Supreme Court on the third instance this matter came to court. He said, "When I say a man's home is his castle, that is an old English rule as old as Lord Hale, and it is an old Canadian rule, an old Canadian law that a man's apartment is his castle."
Recently, an elderly tenant's spouse came to me to say that the landlord was replacing the windows in this tenant's apartment. This elderly tenant has approximately three to six months to live and has chosen to spend his remaining days in his apartment castle rather than burdening the hospital system and burdening himself with an unfriendly environment. The landlord said: "I'm coming in to change the windows. You, Mr Elderly Tenant, and your wife should move all your furniture back, cover it all -- we're not responsible for that -- and after we're finished, you should clean up any dust and debris left over and move all your furniture back."
We told the landlord's lawyer that a man's home is his castle: "We have a right to refuse you entry. Why don't you take your windows, put them in storage for a few months, and when this tenant is deceased you can come back and replace the windows?"
Eventually a compromise was worked out. The compromise was that the tenant went by ambulance to a hotel for three days while all this was done, cleaning ladies were hired, and the tenant went by ambulance back to his apartment.
Under the new law, no such agreement could be worked out. A man's home is no longer his castle. The landlord would have full rights to come in. In this case, the tenant was able to have the landlord pay three quarters of the cost of the cleaning lady, the ambulance and the hotel. There is no such leverage now for tenants, or there will be no such allowance for tenants. Section 21 of the proposed law states that a landlord can come in to do repairs at his will on 24 hours' notice, plain and simple.
The precedent of the Balliol decision is completely lost. Tenants will have a situation where they can decide to leave during these repairs, that is, leave permanently. We've been involved in many cases where landlords did repair after repair over time as a subtle way of harassing tenants out of apartments. Tenants can leave. Tenants can perhaps apply, saying: "This amounts to a demolition. I want three months' rent."
A whole series of protections to live in your apartment in peace has really been derogated from, and I see no good purpose for it. One could understand allowing landlords to come in to do emergency repairs, I can understand having landlords come in to do repairs that are necessary, but to be able to come in and do repairs such as change the bathroom fixtures over to new bathroom fixtures, replace kitchen countertops, these types of repairs, to argue that tenants not be able to allow that window repairs could be held off, maybe instead of in the winter, in the summer, and various other matters related to this, seems to be a situation that the protection -- Roy McMurtry agreed with me that such a case was worthwhile bringing, before he was a member of the judiciary, and the late Larry Grossman, commented this was an appropriate approach by tenants in those circumstances. This seems to be thrown out the door.
I would just like to make one further comment, which is, who lives in these apartments and will be forced to abandon them through such means as these types of repairs? In my experience, they are generally working people, and if there is upward pressure on the rent of working people, the entire province will suffer, as there will be upward pressure on wages.
Thank you for your patience. I invite you to read the rest of our submission.
Mr Kwinter: I was interested in the Balliol case. I'm just wondering if there's some room for some kind of compromise. I agree if it's a matter of kitchen counters or new bathroom fixtures, but in some of these older buildings it's quite possible that there's a very significant economic reason for putting in thermal pane windows, that engineers have come in and shown there's a lot of heat loss as a result of the old windows and that new windows will lessen the cost of operations and could benefit the tenant. Surely there's got to be some way of compromising between what is a frivolous or harassing upgrade to try to get the tenant to move out and those requirements that may not be necessary in the sense that the building is going to deteriorate but will be for the betterment of the building and for the economic benefit of everybody involved. Do you have any comments on that?
Mr Fink: The current law is "necessary." The Court of Appeal that heard this Balliol case in its final instance thought windows would qualify as necessary; Mr Justice Hollingworth did not. The word "necessary" is the balance that currently is in place regarding the Rent Control Act. It also deals with the issue that necessary repairs or structural repairs will capture a rent increase. The balance could be moved away from "necessary" to some other word. The balance could be shifted more towards the landlord's benefit than the tenant's or vice versa. But the point is that the current legislation has no balance at all, and it's very disheartening.
Mr Marchese: Thank you, Mr Fink. It's good to see you again. You've heard Mr Gilchrist before talking about balance. It's a tough thing for these fellows to achieve. They're trying to protect tenants -- that's why it's called the tenant protection package -- and they're trying to help the landlords, because they're buddies. Having to restore that balance was important for them. Obviously, they think that what we had before with the rent control was leaning too much towards tenants and they had to fix that. The system is broken; that's what these folks say. You have a lot of experience in the field. Was the system broken that it needed Bill 96 to fix it?
Mr Fink: Tenants were not being harassed with unnecessary repairs to any noticeable extent up until today and haven't been since the rent review legislation was narrowed in terms of what qualified for repairs. The ability to change kitchen cabinets over is quite often available when the tenants leave their apartments, which does happen. When changing windows, of course it's much more convenient to do them all at once. I haven't heard of tenants resisting window replacement en masse. The current law in this regard seems to have been working fine, particularly after landlords have digested the Balliol decision. I don't see there being a current problem. I don't know of landlords beating down the door to be able to get into apartments to do these minor cosmetic repairs.
Mr Marchese: Can you comment on the order prohibiting rent increases? This government feels that too needs to be fixed. Tenants argue that it was an important tool to keep, because if there were work orders and the landlord wasn't fixing something he was required to do, OPRI was a good remedy for them. They're removing that. Do you have a comment?
Mr Fink: There are other provisions in the statute now that attempt to cause landlords to do the repairs required, including rent abatements and various other forms of penalties. I don't see the problem as being one where landlords will refrain from doing repairs, because I see the economy improving over time, with an upward pressure on rents, and one way to get the rents up will be to do repairs to beautify the apartments to obtain tenants willing to pay higher rents. As opposed to in the past, during the recession, when tenants were under pressure because the buildings weren't being repaired and there were minimum opportunities for rent increases, I actually see the opposite occurring, as happened in the late 1980s, which was that tons of repairs were being done en masse. I'm sure the construction industry will be happy about that. Indeed the buildings need to be repaired. If you look at any building in Toronto, you'll see spalling bricks all over it. They need to be repaired.
The point is that I see under this legislation a very small-l liberal gap for landlords to raise the rents quite extensively to more than recapture the costs of those repairs.
The Chair: Thank you, sir.
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HIGH PARK TENANTS' ASSOCIATION
BRETTON PLACE TENANTS' ASSOCIATION
The Chair: I understand that the next two delegations are not here yet, the Co-op Housing Federation of Canada and Sherkston Shores, and that the High Park Tenants' Association and the Bretton Place Tenants' Association is prepared to make their presentation. Thank you very much for coming.
Ms Janet Lisboa: Good afternoon, ladies and gentlemen. My name is Janet Lisboa. I am president of the High Park Tenants' Association. With me is Betty Postill, president of the Bretton Place Tenants' Association.
The High Park Tenants' Association and the Bretton Place Tenants' Association are pleased to address the standing committee on general government on Bill 96, the Tenant Protection Act. This is not only on behalf of our respective tenants, but for the good of all the tenants in Ontario, the vast majority of whom are good citizens who for many reasons are forced to rent their housing accommodation.
We feel that insufficient thought has been given to this legislation to achieve the fairness required for all involved, namely, landlords and tenants. This government claims it had input from both. Having scanned the list we find several landlords' associations and one tenants' umbrella group, together with several numbered companies, but not one tenants' association.
Our association is the largest, but we were never contacted for input. Our organization was mentioned in Hansard during the years of the Honourable Bill Davis, when Mr Yuri Shymko, our MPP at that time, stood up and spoke in the House on our behalf many times. Every MPP received correspondence from our association during the Honourable David Peterson's tenure in office. However, the current Minister of Housing did not see fit to consult with our organization. Even the fact that we are the largest such organization, as well as the most active group in this city, made no difference to Mr Leach and his committee.
We would be totally irresponsible if we did not stress how strongly we feel regarding the impact of this legislation on the vast majority of tenants, should it be passed with the flaws and unclear wording it currently embodies. Every year landlords, through government legislation, have been receiving automatic cumulative increases to cover any increases in maintenance, taxes and utilities. In view of the fact that this legislation pertains to the roof over our heads, we recommend that this legislation should be very specific and contain no grey areas. One such area deals with rent increases above the guideline for capital expenditures. Nowhere does it specify that this charge will be dropped when the landlords have recovered their costs.
Many landlords in this city are incurring huge expenses by carrying out repairs that should have been done years ago when they were first noticed. Will these expenses, incurred since this legislation was proposed, be eligible for the above-the-guideline increase? This legislation, in our opinion, is perpetuating this unacceptable practice. If this government is serious about being fair to both landlords and tenants, they will encourage landlords to improve their equity and be proud of their properties and set up reserve funds so that they are not constrained when such repairs need to be done.
Tenants in high-rise buildings have been taxed at the highest rate. We have fought to change this unjust treatment for several years. We are glad to hear that the government is considering this change and phasing in increases and reductions gradually. Our understanding is that any rebates due to tax reductions must be legislated to be rebated to tenants or the landlords will be entitled to the rebates. We hope this government will put this legislation in place before or together with the housing legislation.
Every legislation enacted by any government has the potential to be a vast improvement or a total failure. It is entirely up to this government to implement fair legislation, thereby winning the support of your colleagues, respect from both landlords and tenants and the satisfaction that comes from a job well done. Thank you for listening.
The Chair: Thank you very much. Mr Kwinter?
Mr Kwinter: I thought there was going to be another presentation.
Ms Lisboa: No, just the one on both our behalfs.
Mr Kwinter: Okay. I'd like to hear your understanding of the rebates due to tax reductions and how you think that is going to work.
Ms Lisboa: The suggestion has been made several times, even to the Golden commission, that the rate of taxation should be equal for people in six-plex and below, as well as for high-rise buildings, on the grounds that the high-rise buildings have even less work done by the municipalities than homes do. But we are taxed at the highest rate of taxation. We are paying almost four times what individual homes are paying. We don't want this to be done right away, because we don't want anyone to suffer, but we have been suffering for so many years. If it's done gradually I think it would be acceptable for both tenants and the owners of the small dwellings.
The Chair: Thank you. It's Mrs Munro's turn.
Mrs Munro: No. Mr Marchese.
The Chair: I apologize. How could I forget Mr Marchese?.
Mr Marchese: That's a good question.
Ms Lisboa, thank you for coming. I appreciate the presentation you made, and the last one, which I thought was very good as well.
This whole point of tax equity is a serious problem. The government says: "We're fixing it. The legislation allows the city of Toronto, or any other city, to bring about that equity." But when they do that, the cities are going to have a hard time. If you take that tax away from those who are now being taxed, unfair as it might be, the city's got a problem: It's got to take that money from somewhere else. With these guys offloading so many other responsibilities down to the cities, the cities are going to have a hell of a time trying to find money to keep the same services. If they do this as well, it means less money for the city. Where are they going to get it? They're happy to tell you, "Go to the city now and fight them," but you do see that that's going to be a problem for the cities in terms of finding a solution to that particular problem.
Ms Lisboa: Mr Marchese, I have a solution. The first solution is that the Ontario government take it over then.
Mr Marchese: And fix it.
Ms Lisboa: And fix it too, definitely. One does not go without the other.
Mr Marchese: Mr Gilchrist heard that.
We had a Mr Collins who came from the US and talked about a number of things this government is doing with this bill. He was the executive director of the rent control in New York in the 1970s, and then they scrapped it. As a result of the scrapping of the rent controls, this is what happened: A commission set up by Republican Governor Nelson Rockefeller recommended that vacancy decontrol be scrapped. That report said that decontrolled apartments saw rent increases of 52% over a three-year period, while landlord operating costs went up by just 8%. Complaints of landlord harassment doubled between 1970 and 1971 when vacancy decontrol was brought in. Capital improvements actually decreased. They argue it's going to increase. Then they made a few other comments.
Do you have similar fears yourself -- because I do -- about what is going to happen with this bill and how that's going to affect some of you living in those apartments?
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Ms Lisboa: I'm not going to talk about fears that might arise later. I want to talk about facts. During the last legislation we had no rent increases above the guideline, whereas before we were given 10%, 12%, 13.5%, 15% increases; and there was maintenance work being done during the legislation which is currently in place. Now, all of a sudden when this act is going to be put in place, tremendous repairs are being done: drywalling in every building, every hallway, this and that, new fridges, new stoves. Why? Because even though the legislation is not in place, I think they are going to apply for a higher-than-guideline increase and get it. But nowhere in this act have I read that once the landlord recovers that cost, it will be done away with; in other words, that it should be a temporary charge. Again, it was our presentation that brought about that change in the last legislation.
Where are tenants going to be? Surely this government realizes that not everyone makes the kind of money that you people do. There are single mothers who make less than $30,000. I'm not crying for the people who make less, because there are always people who make less and always people who make more, but should the government legislate only on the grounds of those who make more? I don't agree with it. As for going back to the municipalities, to get back to your previous question, Mr Marchese, how can we go back to the municipalities? The municipalities don't legislate the rebates to be given back to tenants; it comes from Queen's Park. Therefore, the whole matter should be decided by Queen's Park.
Mr Gilchrist: I appreciate your comments. I'd like to follow Mr Marchese's line of questioning if I may, because we have a unique opportunity -- it comes around once every three years -- with the municipal election this fall. I'm very confident that this issue has been raised, and given the abundance of city of Toronto councillors clamouring to appear before us, presumably that means they have read the bill and the other attendant bills that we're passing these days and that they are quite aware of the fact that their game has been caught out, that the 6.2 times multiple that they're ripping off tenants in this city and the free ride that they're giving the home owners by comparison is something that now everybody is coming to know.
I guess I would ask you the question, what pressure will you be bringing to bear on the municipal candidates this fall to find some justice once and for all so that there is a fair treatment of property tax? Because the bidding will start at a $100-a-month reduction. In my riding of Scarborough East, the average would drop over $125 -- this is for apartments that rent by and large, on average, for $550 a month, so we're talking about over a 20% reduction in rent overnight. What pressure will you be putting on municipal candidates this fall to make sure that as of January 1 they take the tools that the province is giving them for the first time ever -- these two didn't do it; we've done it -- and use those tools to bring fairness back to tenants' property tax?
Ms Lisboa: Mr Gilchrist, let me ask you one question first before I go back to your question. Has Queen's Park legislated that those rebates be given back to tenants?
Mr Gilchrist: We've created a new class of taxation for apartments over six units. Municipalities always said before, "We couldn't do it because there wasn't a category to be able to give that fairness to," so instead they used the excuse, "We have to treat them like single-family homes." Obviously, when you take a 300-unit building, there is nowhere near the same per person impact on the community as 300 homes.
Ms Lisboa: That is fine, Mr Gilchrist, that they are legislating that these rebates be done, but who are the rebates going to go to? That is my question.
Mr Gilchrist: To the tenants.
Ms Lisboa: How?
Mr Gilchrist: All they have to do is apply, and the municipality will, by law, be required to send a notice to every tenant that the reduction has taken place. My question to you would be, if you get such a letter and on the letter it says, "Simply now forward this letter on to the tribunal," would you not do that?
Mr Marchese: It's that simple.
Mr Gilchrist: That's how simple. That's what the process will be. I'm a tenant. I know I will fill out that form and mail it on when I get that if Scarborough, soon to be the city of Toronto, sees fit to do that, but I guarantee you that every single tenant will know it's been done. I think that's not asking much of individual responsibility for them --
Ms Lisboa: Mr Gilchrist, why has it been set at 20%? Why hasn't it been set at 10% so there will be no hardship for the property owners?
Mr Gilchrist: Sorry. Why was what set at 20%?
Ms Lisboa: The rebates, so that it will be spread out over 10 years.
Mr Gilchrist: It's precisely up to municipalities to decide how they phase that in. They could do it in a lump sum. If in a particular municipality there aren't many apartment buildings, they could do it over --
Ms Lisboa: You just said that it was 20%.
Mr Gilchrist: I said in Scarborough East it would average over 20% if they went all the way to fairness at some point. I didn't say overnight. That would be up to the new city to decide. They could phase it in over up to eight years. We believe that in a community where there aren't many apartment buildings and there are a lot of homes, so not Metro Toronto, it would be quite easy for a municipality to digest that in the first year.
In Metro it would be a different impact. Obviously you're going to have to seek a balance, but I would have thought your goal would be that fairness and that you'd be pushing very hard this fall to make sure that every candidate who wants your vote is prepared to turn around and give you what is your due in terms of fair taxation.
Ms Lisboa: Mr Gilchrist, I've been pushing --
The Chair: Excuse me. It would be interesting to let the debate continue between you two, but the time has expired, unfortunately. We have to proceed with the next presentation.
Ms Lisboa: Can I just answer Mr Gilchrist?
The Chair: If it's very brief, yes.
Ms Lisboa: Mr Gilchrist, I have pushed hard for what we need and we want since 1972, so it's nothing new for me. In fact, your father always supported me also in doing it.
Mr Gilchrist: And we will as well, because you're fighting the good fight.
The Chair: Someone's going to have the last word here, and I'm going to have the last word. Thank you very much for coming.
Mr Marchese: Your father was a good guy, Steve.
Mr Gilchrist: It runs in the family.
CO-OPERATIVE HOUSING FEDERATION OF CANADA, ONTARIO REGION
The Chair: The next delegation is the Co-operative Housing Federation of Canada: Mr Bill Morris, manager of government affairs. Good afternoon, Mr Morris. Please proceed.
Mr Bill Morris: The Co-operative Housing Federation of Canada, Ontario region, represents the 130,000 people who live in non-profit cooperative housing in Ontario. Over 85% of housing cooperatives in Ontario choose to affiliate with CHFC and pay for the services we provide. This includes publications, property insurance, management advice, advocacy etc.
Cooperative tenure is a unique blend spanning both ownership and rental. Residents are eligible to become members of the cooperative corporation, which in turn owns the housing complex. To be a member, one must reside in the cooperative. Members are expected to contribute to the running of the cooperative. They form committees, elect boards of directors, and carry out various day-to-day functions. While some co-op residents choose to remain as tenants as defined under the Landlord and Tenant Act, the vast majority opt for the rights and responsibilities provided by being a cooperative member and are covered under the Co-operative Corporations Act. As such, cooperative members are not covered by most of the provisions of the Landlord and Tenant Act, the Rental Housing Protection Act and the Rent Control Act. The Co-operative Corporations Act mirrors provisions within the Landlord and Tenant Act for purposes of eviction.
The existing tenant laws -- the Landlord and Tenant Act, the Rent Control Act, the Rental Housing Protection Act -- we see as primarily vehicles and instruments of consumer protection. There's something about the changes in legislation that we think is very much wrongheaded: wrongheaded in the assumptions that it makes about tenants and about the rental housing market within Ontario.
Various governments over the years have put in place programs to ensure that Ontarians are housed well. All have sought to do the same thing, to overcome the gap between the cost of building housing and what consumers can afford. Most of Ontario's rental housing, be it privately owned, publicly owned or owned in the non-profit sector, exists because of these various government programs.
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The Tenant Protection Act appears to be based on a number of assumptions: first, that the private market, without government assistance, should be able to meet all the housing needs of Ontario residents; second, that tenants can and should pay more for their rental housing; third, that pushing up rents will attract investment in new rental housing.
We believe these assumptions are wrong. The private market has never met all the housing needs of Canadians. There is no jurisdiction in the world -- and I'd like it if anyone here can please point one out -- where the private sector meets all the housing needs of all the residents within its jurisdiction without government assistance.
On the second point, tenant incomes are inelastic. They're not limitless wells that can be dipped into. Tenants already pay more for their housing than do homeowners as a percentage of their income. Their incomes are significantly lower. The gap between owners' and tenants' incomes has been growing, and right now is almost at the 50% mark. That is, the average owner in Ontario makes almost twice as much money as the average tenant. Here in this community, in Toronto, 30% of renters have a household income below $23,000 per year.
Tenants have much less money to spend on housing than they once did. One of the sheets I circulated to you that was done by the Ministry of Housing shows that since 1988, the percentage of renters paying more than 30% or more than 50% of their gross household income on rent has increased by approximately 50%. We're now at the point where 38% of renters pay more than 30% of their income; 15% pay more than 50% of their income. I think the statistics speak for themselves in terms of whether or not tenants should and can pay more.
The notion that pushing up rents will result in more investment: Pushing up rents only increases rents; it doesn't attract new investment. There are very good reasons for that. Few landlords are builders. Most landlords are simply investors.
The second reason is that we all produce the same product. Until recently, we produced most of the rental housing in the Ontario marketplace within the non-profit and cooperative sectors. We know that at the high end of that market you have people who are on the edge of home ownership. The competition in the rental housing marketplace is and always has been the entry-level home, not other forms of rental housing. People choose to be owners; they do not choose to be tenants. They are tenants by circumstance in the vast majority of cases, as dictated by their incomes.
What that means is that if you and I got together and decided that we were going to produce housing, we could produce housing at the same cost as it would cost another group of people in this room to produce ownership housing. My question would be, why would we produce rental housing, not ownership housing? It costs the same amount of money, yet the potential consumers of the rental housing are all relatively poor; the potential consumers of the ownership housing can afford my product. What would possibly motivate me to produce rental housing in a marketplace where the consumer cannot afford the product?
Finally, I want to point out something that I don't know has been pointed out in the past; I haven't been attending these. I want to point out that tenants and taxpayers have a vested interest in ensuring that rental housing in this province remains affordable. We do for a number of reasons, not the least of which is that almost 30% of renter households receive social assistance. Higher rents mean higher taxes, more people qualifying for social assistance, higher social assistance rates. In fact, the social assistance system is Ontario's biggest housing program. It is the one program that is universal. It's the one program that's accessible to everyone of low income who is a resident of Ontario and qualifies for social assistance. That is where we spend our housing dollars. Higher rent increases, as I say, mean higher taxes.
Passage of this act, it strikes me, is designed to do only one thing: to push up rents and to reduce the protections that tenants have. The name, as I think many people have commented on before, is a serious misnomer.
The Co-operative Housing Federation of Canada believes it's time for the government of Ontario to wake up to the housing needs of Ontarians that have been ignored since this government came to office. It's time to get down to the difficult task of attempting to meet those needs. It's time to move away from the do-nothing attitude of this government with respect to housing, with respect to the actual provision of real programs, real dollars, real spending, real programs that make a difference in people's lives. It's time to get on with the job and responsibility that you as legislators have to ensure that the housing needs of Canadians are met.
This legislation does nothing to achieve that. As I say, the minister came here and suggested that there were developers lined up to build tens of thousands of rental housing units in this province. All that we have to do is put in place the right framework. The right framework is not legislative. If we want to make people significantly richer, that will do it, but unless we put a significant amount of money in people's pockets, we haven't done anything to ensure that they're going to be well housed.
I'm afraid that this legislation is likely to result in rents that are higher and it's likely to result in a loss of rental housing. In communities across this province investors are lining up. One only needs to look at the way in which investors are lining up to pick off the choicest properties for conversion to purposes other than residential rental. We're going to see a loss of housing in a way that we saw before the Rental Housing Protection Act was put in place. Far from spurring investment, creating more rental housing, this act will do exactly the opposite, because it does nothing to address the basic needs of the marketplace, and that is the gap between the cost of doing business, producing the product, and what renters can afford.
Mr Marchese: Thank you Mr Morris. Mr Lyall from the Metropolitan Toronto Apartment Builders Association recognizes that there's a gap but he says this is part of a continuum and this is really important to bring the private sector back. This might be minor in the scheme of things, I'm not sure he used those words, but it's part of that important piece and all the other pieces have to fall into place. To a question that Mrs Munro asked, what about the building of affordable housing, he didn't say we can't do it exactly, but the essence was that they really won't build or can't build affordable housing because there's no money in it.
Mr Morris: Correct.
Mr Marchese: But he did say, though, they would build at the higher end and that's good, he argued, because there will be -- he didn't use the word "trickledown," but people will then move out of the other apartments and move into these luxury apartments or much better apartments and that would leave a lot of empty apartments for other people to come in.
Mr Morris: It's a good theory. I wish it worked. It doesn't work, it doesn't happen. Renters remain where they're renting generally until they can afford home ownership. There isn't a significant amount of movement within the rental marketplace between product which is old and product which is new. Location governs part of the reason for people's moves, but for the most part tenants are tenants because of economic circumstance, not because they're getting some wonderful deal in the marketplace and if we simply offer them a better product at twice the price, they're going to move. That's just irrational.
Mr Marchese: In the past they built because of a number of subsidies or programs that were designed as giveaways to the private sector. Mr Lampert says you could do it if you reduce development charges, equalize property taxes, you heard about that, halve the GST, streamline regulations on building, halve the CMHC mortgage, eliminate the provincial capital tax.
Mr Morris: What's wrong with doing all that?
Mr Marchese: Yes, what's wrong with doing that?
Mr Morris: There's nothing wrong with doing that. He's getting at the right end of the problem. You're getting at reducing the gap between the cost of production and what consumers can afford. It's interesting, though, it's all being done at the cost end that the builder has to bear.
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Again what's being said there is, "Let's provide subsidies." If we're halving the GST, that sounds like a subsidy. If we're getting rid of development charges that otherwise would have to be paid, we're talking about a subsidy. It's interesting that we're talking about subsidies that for the most part are municipal subsidies. We're not talking about provincial subsidies in most of those cases. Why don't we get rid of the employer health tax for constructors? I don't know, but I don't think that these relatively inefficient ways of throwing money at the problem have worked in the past. That's one of the reasons we created targeted programs, programs that ensured the money went to where it was designed to go. We had MURBs, we had all kinds of tax-incentive programs in the past, and the consensus was that they were inefficient, that given the amount of money that we as taxpayers were pumping into them, we weren't getting enough out the other end.
Mr Klees: You make a very important point, and I certainly agree with you, that in the past governments have thrown money at the problem and the evidence is very clear to us that throwing money at a problem doesn't solve it; in fact it tends to create even more problems for the taxpayers whose money it is.
Part of the problem, over the last couple of years I've had a number of people in my constituency office who are in the co-op business, managers of co-ops, and I've had a number of complaints or concerns expressed that within their co-op they have a number of people who shouldn't be there, who are being subsidized by taxpayers and who are occupying units that rightfully should be occupied by people who need the subsidy.
Mr Morris: "Rightfully" meaning what? That it's against the program guideline? I'm missing your point here.
Mr Klees: Obviously you know a lot about this issue of co-ops and subsidized housing, and I think you're suggesting that perhaps the government should continue in the direction that the previous government went, and that is to put more money into those non-profit type of programs. Are you telling me that the concerns that have been expressed to me -- and these are people who have a responsibility for managing cooperative units -- do not exist, that people who are occupying subsidized units are all in fact validly there?
Mr Morris: Mr Klees, you seem to be bringing to the discussion essentially the rules of public housing into the non-profit housing system. Let me just clear up the misconceptions that you seem to be labouring under.
Public housing is designed to provide housing to the lowest-income people in our community. We've traditionally used a point-rating system to ensure that takes place. Non-profit housing programs that were designed in the mid-1970s came out of a royal commission, a royal commission that found we no longer wanted to spend our tax dollars on housing just the poor in public housing. I didn't author this royal commission, but the royal commission decided that we no longer wanted to direct all our housing dollars narrowly at housing the poor in what were considered ghettos.
It decided instead that what we would do is go after programs that had two focuses. One was to ensure that supply was there -- those are the programs that we've had throughout the last five decades -- and two, we would also include rent-supplement dollars for low-income people so that they could access that housing. The non-profit programs were designed on the same basis as the private sector programs at the time. They were designed to produce rental housing for anybody in the rental market who wanted to move into it, and then there are rent supplements for some low-income people to get in.
What you seem to be suggesting is that you would like to go back to a time where we had a system whereby only the neediest were housed in subsidized units and that we go back to 100% needy places that essentially the royal commission decided we should not follow. If that's the point you're trying to make, then it's a very different point. Then what you should be saying is that you wish that we were building public housing.
Mr Klees: Actually I thought we were in agreement, because what I am saying is that where we should be targeting the money is where it's needed most, and that's with those people who cannot afford to pay for units on the income that they have.
Mr Morris: I'm disagreeing with you. I'm saying there are two different things that you're getting at here. One, you're getting at supply -- you're either going to produce rental housing in the marketplace; that's the one objective the program had -- and two, you're going to get at income support dollars. If you're saying they should all be income support dollars, then what I'm saying to you is, how are you going to produce the housing?
Mr Klees: And that is exactly the point, because the previous government failed on the supply side. If their program had worked, we wouldn't have the supply problem that we have today.
Mr Marchese: Oh, Frank, please.
Mr Klees: So what we're suggesting is that what we need to do --
The Chair: Put your question.
Mr Klees: -- is establish a mechanism that will generate supply, create a framework where the private sector is encouraged to generate additional units --
Mr Marchese: But they are not going to do it.
Mr Klees: -- and then, where the subsidy has to be focused, we should be addressing those to the individual needs. I think that's the objective of this piece of legislation.
Mr Morris: What is the model, Mr Klees? I didn't get asked the question, I got given a statement.
The Chair: I thought for a minute you were both agreeing, but you're not, so we're going to move to Mr Kwinter.
Mr Morris: We're definitely not agreeing.
The Chair: We're going to move to Mr Kwinter, please. We've run out of time.
Mr Kwinter: I think it's quite evident in several of the deputations that we've heard from people in the industry that it's virtually impossible for the industry, given all of the parameters that are out there, to build so-called affordable rental accommodation.
Mr Morris: Yes.
Mr Kwinter: It has nothing to do with people who are on public assistance or anything else. The average person cannot afford to pay for a building that is going to be built today. It just doesn't work.
Mr Morris: Right.
Mr Kwinter: What people are going to find -- and no one has mentioned this. At the top end there's probably a good market for rental accommodation. Over the span of years that I've lived in Toronto at one time buying a house was an extremely good investment. That is no longer the case. There are better ways of investing your money than living in a house, other than the benefits of having home ownership, but from a strictly financial point of view, the appreciation isn't there. You're finding more and more seniors are deciding to sell their houses and to rent. They take the investment, they take the capital, they live off that and they pay their rent. They have no headaches. They don't miss the appreciation and they're not getting it anyway. So there probably is a market for that segment.
The question that I ask you is -- and I don't know whether we've come up with a solution -- how do we address the others?
Mr Morris: You're very right. There are a number of people in the industry who are actively trying to service that market, because it's a different market. You can appreciate that the people who are coming with equity, who may already be homeowners and are simply looking to divest themselves of a millstone because it's now too much for them, have choices.
Mr Kwinter: Particularly with the tax increases that are coming.
Mr Morris: Sure. So there are plenty of developers out there who are working on life-lease projects and all kinds of other innovative ways to service the market of people who are coming with equity. The tricky part and the much more difficult part is, what do you do with the young family? What do you do with the people who don't come with equity? All they're coming with is the first and last month that they can scrape together. That's all they can put together. That's the harder nut to crack. Essentially what you need is forms of housing that don't require that large equity investment initially and you need rental housing.
When you look cross-jurisdictionally, everywhere in the world, be it Israel, the United States, England, anywhere, what you have is governments actively involved in the marketplace, providing people with the kind of income assistance they need to ensure that, one, they can purchase the product in the marketplace or, two, acting directly, as governments have in Canada for the last 50 years, to ensure that supply is available in the marketplace and people can purchase that with the incomes they have. One way or the other: either affect the supply side by providing subsidy there or affect the income side by providing subsidy there, but you've got to bridge that gap or you're not in the game.
The Chair: Mr Morris, we've come to the end of your time. Thank you for coming.
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SHERKSTON SHORES
The Chair: The next delegation is Sherkston Shores, Ian Wilbraham, vice-president, North American operations.
Mr Ian Wilbraham: My name is Ian Wilbraham. I am the divisional director responsible for Sherkston Shores, which is a resort campground in Port Colborne, Ontario.
Sherkston Shores would like to thank the members of the standing committee on general government, rent control, for providing us with this opportunity to address you today. We applaud the government's efforts to streamline the current legislation governing landlords and tenants.
Just to give you a little background into our organization and our industry, 12 months ago, prior to the first and second readings of Bill 96, we had the opportunity to address your committee to stress the importance of campgrounds being excluded from this piece of legislation.
There are approximately 1,200 privately owned campgrounds in the province, with a total of some 110,000 campsites, of which two thirds are occupied seasonally, May 1 to October 31. In many cases, the seasonal trailer remains on the campsite during the winter months for storage purposes but is only physically occupied during the summer months.
One such campground is Sherkston Shores, with approximately 1,100 fully serviced campsites, plus up to 600 partially serviced and non-serviced sites. Sherkston Shores is located in Port Colborne and is privately owned by an experienced campground operator who also operates campgrounds in the United Kingdom, as well as one in Sarasota, Florida. Accommodation at Sherkston Shores is in park model trailers, travel trailers and tents. Sherkston Shores provides affordable camping vacations to families from Ontario and western New York. Sherkston Shores does not offer sites for mobile homes, and in fact mobile homes are specifically excluded from the site by the local bylaws.
The campground industry is a large, thriving business in Ontario, employing some 8,000 people. Sherkston Shores provides employment opportunities in the Port Colborne area for approximately 125 direct employees, and 45 full-time and 30 part-time people working either in the park concessions or for subcontractors on the park.
The Sherkston Shores site was acquired by the current owners in 1988 for $8.5 million, and the total investment so far amounts to in excess of $12 million. Annually, $2.5 million is spent locally on provisions and materials for the site. This investment has provided the creation of a main street, four tennis courts, a basketball court, a roller hockey court, a swimming pool, a mini-golf course, a baseball diamond, plus park model trailer and RV sites and extensive landscaping.
The concern of Sherkston Shores and similar private campground operators in the province is the ambiguity and lack of clear definitions in the existing legislation which leave the legislation open to interpretation. We do note, however, from the current draft of Bill 96 that the exemption section has already been amended to specifically exclude from the act accommodation intended to be provided to the travelling or vacationing public in a campground, trailer park or vacation home. We also understand from officials at the Ministry of Housing that further language is proposed to be included within the exemption section to specifically exempt accommodation occupied for a seasonal or temporary period. We applaud the government's efforts to include these changes in the draft legislation, which we strongly feel will remove much of the ambiguity currently existing within the current legislation.
Additionally, however, we ask that further consideration be given to the definitions within the act of "mobile home" and "mobile home park." Currently Sherkston Shores, together with other campground operators, feels that these draft definitions still leave the proposed legislation open to interpretation, and we ask that these two areas be further reviewed. Specifically, I mention to you that Sherkston Shores, together with most campgrounds in Ontario, is only operated on a seasonal basis for approximately six months of the year, and during the winter months water service is shut down throughout the park, making the trailers unusable as a permanent residence.
Our recommendation: It is the request of Sherkston Shores that the committee recommend that the definitions of "mobile home" and "mobile home park" be reconsidered in an effort to eliminate ambiguities. We would also like to draw attention to the fact that these requests reflect what is actually done by a multitude of city bylaws across the province of Ontario.
Over the years, confusion has arisen within our industry regarding the existing legislation. We believe the government is acting with a high degree of responsibility in its efforts to streamline the statutes so as to provide adequate protection for permanent residential tenants. We much appreciate this opportunity to place our concerns before you and would be pleased to provide any additional information you might need pertaining to the campground industry.
I'd just like to add that, as well as this, we'd be happy to provide any help that we could give in the technical drafting of any of this legislation or in any suggestions to definitions.
Mr Gilchrist: I'd just like to thank you, Mr Wilbraham, for coming forward. It is our intention to further clarify the act. Your requests and those of similar operators certainly are reasonable ones. It is only appropriate that we make a distinction between year-round residences and something that is merely catering to the vacationing public, and I really appreciate your taking the time to point out the need for further clarification.
Mr Kwinter: I just wanted to say the same thing. I have had trouble all along listening to these people who are talking about mobile home sites when these home sites are not mobile at all, whereas recreational vehicles are truly mobile homes. They move around. I would have no trouble with that at all. There's another whole area that hasn't been touched upon but which lends itself to the same kind of problem and that's people who live on their boats on a year-round basis. How do you deal with them? Certainly I have no problem with a clear definition of what is a mobile home, what constitutes a campground, what constitutes a travel location or whatever it is, but I think there really has to be a clearer definition so there isn't that ambiguity.
Mr Marchese: I recall your last submission. We were all in agreement and tried to solve it almost instantly while he was speaking. I think all parties at the time were supportive of that, and you're raising some similar problems again with respect to definition. The parliamentary assistant seems disposed to looking at that, and we don't have any problems with that either.
Mr Wilbraham: That's helpful. Thank you. The reason for coming back again and the point I was trying to make is, as I said, the exemptions section has already been quite substantially changed and it just seems to us possibly there's still some ambiguity in the definitions. If those can be reviewed, I think everything is fine.
Mr Marchese: If they haven't called you, they will, I guess, to help with the technical language.
The Chair: Thank you for coming.
We're a little ahead of schedule. The City of Toronto Committee on the Status of Women? Rob Herman? Aslam Ahmed? Then we will recess for 15 minutes.
The committee recessed from 1639 to 1701.
CITY OF TORONTO COMMITTEE ON THE STATUS OF WOMEN
The Chair: Ladies and gentlemen, perhaps we could resume the proceedings this afternoon. For the City of Toronto Committee on the Status of Women there are two people before us: Catherine Leitch and Janet Forbes. Good afternoon.
Ms Catherine Leitch: My name is Catherine Leitch. I am program coordinator with the Committee on the Status of Women with the city of Toronto. With me is Janet Forbes, who is a member of that committee.
The City of Toronto Committee on the Status of Women is a citizen committee established to maintain, improve and advocate for an equitable quality of life for women living in the city of Toronto. The committee works cooperatively with city agencies and other levels of government to advocate and develop policies to achieve access and equality for women working and living in Toronto. The following presentation is a representation of the views of that committee.
The Committee on the Status of Women believes Bill 96, An Act to Consolidate and Revise the Law with respect to Residential Tenancies, referred to as the Tenant Protection Act, is regressive legislation. This legislation will not protect tenants, and instead will cause serious harm to the lives of people across this province, in particular many of our most disadvantaged, such as women, children, people with disabilities, new immigrants and seniors. This legislation will have a devastating impact on the lives of these people who are simply trying to make ends meet on a day-to-day basis.
Much of the legislation that has been passed in the last two years, such as changes to the Employment Standards Act and the reduction in welfare benefits, has had a negative effect on the lives of women and children in this province. The Committee on the Status of Women has many concerns regarding this legislation and we will address each of these concerns individually, making particular note of how the proposed law impacts women. We will also be referring to and supporting the positions of other deputants who have come before you to denounce Bill 96.
(1) The first is vacancy decontrol. The committee believes that the removal of rent controls on units will result in the virtual elimination of affordable housing within a very short period of time. While tenants presently occupying a unit are protected under rent controls, tenants who move will no longer be protected.
People move for many reasons, and only one of these reasons is choice. Women, those with and without children, are often compelled to move due to abuse from former partners, as well as abuse from landlords and neighbours. Are we to say now that women will not be free to flee this abuse simply because of the likelihood that they will not be able to afford the rent in another building? Also, what of the impact on individuals who have worked and scrimped to finally get to a point where they will be able to move into better circumstances, only to find that the bar has been raised on them? Is the government saying that these individuals should never be able to improve their circumstances?
To assume that landlords will only raise rents according to what the market will bear does not take into account that presently there is a vacancy rate of 1% in the city of Toronto. Given this low vacancy rate, you would be naïve to believe that landlords would not take advantage of the circumstance and raise their rents, in all probability well beyond anyone's notion of affordability.
When the average rent for a two-bedroom apartment in the city of Toronto is already $986 -- and this does not take into account that the ones that are presently vacant are likely to be much higher than that -- how can we trust that this amount will not increase exponentially? This unfortunately will be what the market will bear. People have no choice. Either they sacrifice things they should not have to sacrifice, such as food and transportation, or they are forced out on to the streets and into shelters. According to the August 2 edition of the Toronto Star, there are presently 3,500 people, including 600 families, living in Metro homeless shelters because they cannot find housing they can afford. It will only be when there are many more apartments available that one will be able to say that market forces are truly working as they should.
Given that the industry -- in this case I mean developers -- spokespeople have already publicly indicated that the removal of rent controls from units will not likely result in a substantial increase in new housing units, then who is this being done for? If not for the developers and certainly not for the tenants, then who?
(2) The second point is the removal of rent freezes on outstanding work orders. Tenants have had the protection of the municipal government when a landlord has not complied with property standards when the municipality issues and enforces orders prohibiting a rent increase. Bill 96 proposes to eliminate these rent freezes, leaving tenants and municipalities with no reasonable way in which to enforce these work orders. It is clear from the condition of many apartments that routine maintenance is not happening. Who will protect tenants against the more serious issues of maintenance which affect the safety and security of tenants, such as elevators, locks, heating, water?
According to the presentation by the city of Toronto to this committee, the province issued 5,289 OPRIs between 1992 and 1996. Of those, approximately 72% were withdrawn before the rent freeze took effect because the landlord complied with the work order. Why change what clearly works? Are tenants always going to have to go to the courts or adjudicative tribunals for maintenance issues to be dealt with? Those tenants who are most vulnerable to harassment by landlords, such as women with children, are unlikely to access this process either because of lack of money or because they do not wish to face possible harassment from their landlords just because they wish to have repair work on their buildings or units carried out. When the province and the municipality were enforcing the OPRIs the tenant was supported. Now the tenants are on their own.
(3) Removal of the Rental Housing Protection Act: Removal of the RHPA will almost assuredly result in a decrease in affordable housing in the city of Toronto. The city of Toronto has had the ability to regulate the conversion of the housing stock to other uses for over 10 years, which has resulted in the city keeping a large amount of affordable housing that would otherwise have been lost to conversion and to other uses such as luxury renovations. In the city of Toronto it is already evident, from the number of buildings presently being converted from office buildings into condominiums, that developers are not interested in satisfying the need for affordable housing despite the desperate need for such housing.
(4) The administration of Bill 96: Under Bill 96, all issues currently decided by the courts and civil service administrative adjudication will be decided by an administrative tribunal. There are serious concerns, because the members of this tribunal will be appointed by an order in council, that the current Ontario cabinet will not necessarily ensure that the members are reflective of the interests of all individuals or that they will have any experience or knowledge of landlord and tenant rental housing issues. Members of this tribunal must be selected through an open, public, competitive process to ensure that individuals are selected on the basis of their qualifications only.
The committee objects to the provision that landlords and tenants must now pay a fee to file complaints. It is extremely important to the issue of equity and justice for all that this fee be eliminated.
The ability of this tribunal to award costs also seriously concerns the committee. If honourable tenants believe that costs could be awarded to the landlord, the likely result is to be a chilling effect in the filing of complaints with the tribunal. Tenants should not have to fear monetary retribution should they feel that they have a complaint. The tribunal should not be able to award costs.
(5) Human rights: Finally, the committee on the status of women opposes the provision contained in section 200 which would propose to amend the Human Rights Code to allow landlords to use income criteria as a basis on which to determine eligibility for a rental unit.
In its letter to Premier Harris on June 13, 1997, the committee stated that it believes the Human Rights Code to be quasi-constitutional, and therefore the proposal to amend the code through this backdoor approach is not respectful. The impact of this provision will seriously harm the most disadvantaged of tenants, in particular women with children, both those who are presently in receipt of social assistance and the working poor.
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The committee does not object to the necessity of landlords ensuring that they have tenants who will pay their rents but feels that landlords already have that ability through the use of reference checks, rental and credit histories. Many landlords presently find opportunities to deny certain individuals tenancy. This provision will surely open the floodgates to discrimination.
The chief commissioner of the Human Rights Commission has stated that there is no business case for tenant selection based on income or the source of that income. To say that those with low incomes or those on public assistance are more likely to default on their rents is to buy in to the myth and hurtful stereotype that people living in poverty are unreliable and untrustworthy. There is no reliable evidence that people with low incomes are more likely to default on their rents than those with much higher incomes.
In fact, if one is to use common sense -- and I have my own definition of common sense here -- it can be argued that people with low incomes would be likely to pay their rents because they can least afford to lose their housing. They have limited options to pay court, moving, utility hook-up and first and last months' rent costs again and again. Women, especially those who have children, are not going to risk their children's security by not doing everything possible to ensure payment of rent.
Therefore, the committee on the status of women concurs with commissioner Norton that the words "income information" should be removed from sections 36 and 200 of Bill 96 and that the regulations for Bill 96 ensure that the use of credit checks and rental histories be limited so that those individuals whose records are non-existent or inaccessible are not discriminated against.
In closing, the committee on the status of women must state its strong opposition to many of the provisions in Bill 96 and recommends that this bill be withdrawn so the tenants in this province can once again be assured of an equal opportunity to housing which is safe, affordable and secure.
Mr Kwinter: Thanks for your presentation. I agree with everything you've said. I was taken by a couple of your observations because I've noticed the same thing. When you said the office buildings being converted to condos are not being converted to rental or affordable housing, we just have to look down the street. The building I used to occupy when I was the Minister of Consumer and Commercial Relations has been converted. The building across the street, that used to be occupied by the Minister of Mines and Northern Development, I think it was, has been converted. I was driving along Richmond the other day and I saw another building being converted to condos. All these buildings are being converted to condos.
I agree that the provisions in Bill 96 are going to make it a lot easier for developers to convert those buildings. We're going to find the same old problem: There may be accommodation but none that anyone can afford. I shouldn't say that "anyone" can afford, but the vast majority of people we're trying to help will not be able to afford it. I assume this is what you're referring to.
Ms Leitch: Precisely. My point is that if you cannot afford the rents currently out there, you have no other options. But if you can afford the rents presently out there, you probably can also afford to buy. If the rent is $1,500, the likelihood is that you are probably in a position to buy. The fact is that the only people who now have to rent are very low-income individuals. An $89,000 condo is simply out of the reach of these individuals because they don't have the down payment, for starters.
Mr Kwinter: Another significant point you made is that it's raising the bar. For people who will be forced out of their apartment, for whatever reason -- it may be economic, it may be social, it may be family circumstance -- once they're out and want to get back into comparable accommodation, that comparable accommodation will be comparable possibly in status but not in price because of the provisions in this bill.
Ms Leitch: Precisely.
Mr Marchese: Thank you both for coming. What we have seen, at least what I've seen last year and at the moment, are two camps of people: We have landlords, pro-development types and the Conservative members of this government on the one side saying, "We have a balanced bill, Bill 96"; then we have everybody else coming here essentially saying much what you're saying, with some emphasis here and there on the other side.
Is it possible that all of you could be so wrong and that enlightenment comes only from these other groups? What do you think? What's going on?
Ms Janet Forbes: There are obviously two groups of people representing their own particular interests. In the past, developers have said time and time again that they do not believe it is their responsibility to house the underclasses, that that's a government responsibility. But we now see on both the federal and the provincial levels an entire unwillingness to deal with this group of people.
I am not in some ways objecting to developers going out and developing properties and getting what they can get for them, but that's one issue and housing those people who can't afford to pay that level of housing costs is another issue. Unfortunately, you're lumping everybody into the same group here, and it's not the same group.
Mr Marchese: Yes. Unfortunately, the private sector says that what we as NDPers have done in the past is wrong, that we've just wasted a whole lot of money to house people who simply have nowhere else to go. They're saying we should just leave it to the private sector and help them out so they can build.
Ms Forbes: There's been a whole tradition in this province of the government helping out private sector developers in providing housing for lower-income families. A lot of those programs have involved such things as mortgages and the recent programs they've had, where they've subsidized landlords to renovate rental apartments to bring them up to cost. There's a whole history of programs like that. The government in the past has seen it as a responsibility to house those people who can't otherwise afford adequate accommodation.
Mr Marchese: No longer the case. Vacancy decontrol is one of the worst fears I have about the bill; there's so much you've talked about. There is no limit in terms of what landlords can charge. Do you think there should be some cap on that? When you move, with vacancy decontrol, they can charge what they like. There's no ceiling in that regard. Do you think somehow the government should say to landlords, "You can only charge so much if you're going to do this"?
Ms Forbes: That would seem the responsible position. I understand that this government doesn't want to be involved in regulation, and that for every way you think of a regulation there's probably another way people think of to get around it. But I think it has to do with a form of social justice, that there is some form of regulation in place that ensures that people will be adequately housed. Housing is a right. It's not a privilege, not a frill.
Mr Gilchrist: Rosario, you were doing so well until your final point, when I think you misled these presenters -- forgive me -- may have created the wrong impression by suggesting that no cap for new construction is a new thing. In fact, it's a continuation of your act. There never has been a control, for the first five years of any building, since you folks brought about your changes.
We had a presentation earlier this afternoon from Mr Fink, who has been before us a number of times on legislation relating to landlord and tenant issues and a number of other issues as well. Mr Fink's considered opinion is that the previous landlord and tenant legislation, as he's dealt with in his own newsletter, resulted in rent increases of up to 100% a year. Is it really your position here today that the status quo is perfect and we shouldn't be looking at finding better balance between, as you've correctly pointed out, the very different needs of landlords and tenants, that for the past five or 10 years it's been nirvana in housing in this province?
Ms Forbes: I think it's been a lot more equitable than a lot of people would like the populace to believe. I think the Landlord and Tenant Act has been a really interesting act. For one thing, it was an act that everybody could read, and it was accessible, unlike a lot of other government acts. It was in place for a long time and people understood the regulations.
If somebody goes into business, if a landlord becomes a developer and goes into the rental business, it behoves him to understand the business he's getting into in the first place and understand those constraints. I don't necessarily think it's entirely fair of landlords to say, "It's unfair to us," when they got into the business for the most part -- I mean, the Landlord and Tenant Act has been around for a long, long time.
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Mr Gilchrist: Is it similarly fair to suggest that tenants know too that there's such a thing as inflation and that every homeowner who faces higher costs year after year after year -- that those similar increases would only be appropriate in any other form of housing?
Ms Forbes: Inflation has been dealt with to some extent in the mandated increases. Inflation really hasn't been an issue over the last few years.
Mr Gilchrist: What about capital improvements?
The Chair: Mr Gilchrist, let her finish.
Mr Gilchrist: I was finished that point. What about capital improvements? When you own a home and the furnace breaks, you have to pay for it. Where did we get this impression that if you live in an apartment and the elevator breaks, somehow, even though it's the tenants who use that elevator, there's no consequence to the cost of living in that building?
Ms Forbes: There are a number of ways of looking at that. First of all, there have been programs, as I said, previously available for landlords in this province to bring their buildings up to code, and those programs have been highly subsidized by the province over a number of years. I don't think the public realizes that the landlords have had that advantage.
Secondly, there are a lot of us who live in rental property who are very much aware of the fact that landlords are under some constraint. Personally, the apartment building I live in is well maintained but it's certainly not luxurious. It's not up to code. I know that. I do not expect, other than it being maintained reasonably clean and safe, that a lot of luxury be provided. I think most tenants are exceptionally reasonable and there have been built-in possibilities of landlords getting capital costs.
The Chair: Ms Leitch, Ms Forbes, thank you for coming.
ROB HERMAN
The Chair: Our next presenter is Rob Herman. Mr Herman, good afternoon, or I guess it's almost good evening.
Mr Rob Herman: Good afternoon, Mr Chairman, and good afternoon, learned ladies and gentlemen of the committee. My name is Rob Herman and I'm the president of Robinwood Management, which is a small, family-owned apartment management company that owns and operates seven apartment buildings in the city of Toronto. Some of these buildings have been in my family over 50 years and, believe it or not, some of the tenants have been there as long as my family has owned the building. I think that says a lot about the way we maintain our properties and the way we treat our customers, the tenants.
Please forgive me if I use the term "learned" somewhat facetiously, but what have we really learned after 20 years of "tenant protection"? We have what Bob Rae proudly called "the toughest system of rent control in North America," but what does that really mean? It means we have the most poorly maintained rental stock in North America, it means we have the lowest vacancy rate in North America, and it means we have the fewest number of rental units under construction in North America. It is also a system that the judges of the Supreme Court of Ontario have called "draconian, odious and offensive." I applaud the current government for trying to do something to reverse this trend.
Some of the buildings we own are 60 to 70 years old and naturally need major renovation from time to time. Buildings need new plumbing, wiring, boilers, windows and roofs. Landlords are not going to make these huge capital investments unless they have confidence in government and unless they can see a reasonable return on their investment. The banks aren't going to loan them the money even if they wanted to do the work. The removal of the restriction against major renovations contained in the Rental Housing Protection Act and the capital expenditure allowances under the new act seem to encourage such needed investment.
Just as a point of irony, I brought along two articles from Canadian Renovation magazine which were published in August 1989, which were specifically about a 70-year-old building that I own at Church and Wellesley. I wanted to completely renovate the building. It was 70 years old. There were no work orders against the building, but I wanted to renovate it. I wanted to bring it up to current standards: new windows, new plumbing etc.
The title of the first part of the article was "Snared in the Bureaucratic Web." The author of the article found it so interesting that they actually made it a two-part article, and the second part of the article concluded by saying, "What this independent landlord really wants is the right to perform necessary rehabilitation on a privately owned building without excessive government interference."
I think this new act can go a long way to trying to achieve the objectives of a vast majority of the property owners in Ontario. However, there is one problem that I wanted to touch upon. While I agree that displaced tenants should have the right of first refusal to reoccupy a renovated apartment, it should be at a market rent for two reasons:
First, major renovations are extremely expensive. They can cost in the private sector anywhere from $5,000 to $20,000 per unit. In the non-profit sector they cost twice that amount. How can you expect a return that could possibly justify that kind of expenditure if you're limited to a 4% cap? In addition, it's not reasonable that a tenant can expect that you can reoccupy a completely renovated apartment for only 4% more than you're currently paying. I feel that if you're serious about having landlords undertake major expenditures and renovations, the tenant reoccupying the unit must pay a market rent. That's really the major issue I wanted to discuss with you today.
I could go on and on ad nauseam about the current rent control system and about how distorted it has made the marketplace, but if you look around you, I think it's self-evident to most of us, although I must admit I was a little surprised when, at her request, I went to meet with Mayor Barbara Hall about increasing the supply of private sector rental accommodation in the city. There were these 10-foot-high posters in the lobby of city hall saying, "Save rent control." What are we saving? We're saving crumbling buildings. We've got no new rental supply, no new construction or renovation jobs, and no freedom of choice for tenants. If you really wanted new rental supply, the posters should read, "Save us from rent controls." It's that simple.
The Chair: Each caucus has time for a question.
Mr Marchese: Just as a little note, in Vancouver, where there is no rent control, their vacancy rate is lower than ours with rent controls. We have a 1.2% vacancy rate and they have a 1.1% vacancy rate and they have no rent control there, just as a point of interest.
Mr Herman: Actually, they do, but anyway --
Mr Marchese: They do what? They eliminated it.
Mr Herman: They do have rent control in BC.
Mr Marchese: They eliminated that a long time ago.
Mr Herman: I know. They brought it back. But anyway --
Mr Marchese: Okay.
The Chair: That's it. One question each.
Mr Marchese: One question? Is that all the time we have?
The Chair: That's right.
Mr Klees: One question and you got the facts wrong.
Mr Marchese: Mr Herman, how do you do it? You've been in the business 50 years.
The Chair: Mr Marchese, we're moving on now.
Mr Herman: I have been in the business 50 years.
Mr Marchese: You're doing okay?
The Chair: Mr Marchese, Mr Gilchrist is next.
Mr Gilchrist: Thank you, Mr Herman. I think you've encapsulated the points very well. Given the fact that you are doing these things and this isn't a philosophical debate -- you're not a university professor, you're not paid to lobby on behalf of one side or the other, you've put your own dollars on the line -- I think it's doubly appropriate that you've come before us to make this presentation.
I think, while it would be lost on those whose minds were made up before this hearing even started, that to have tenants who have been in your building that long obviously must bespeak a good relationship that goes two ways. Thank you for proving again that there are good tenants and there are good landlords, and there are bad in both categories as well.
I'd just like you to clarify again. Under the previous two governments we saw a number of intrusions into the housing market. Would it be fair to say, based on what you've personally experienced, that their attempts at rent control and other intrusions limited both your ability and willingness to maintain building standards, to invest in new buildings and to increase the housing stock for apartment dwellers in this city?
Mr Herman: Absolutely. There's no question.
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Mr Kwinter: Mr Herman, I hope maybe you can answer a question that I've asked so many times, but I have never gotten a satisfactory answer. In your presentation you say, "We have the fewest number of rental units under construction in North America." What is possibly preventing you from building new rental accommodation? There are no rent controls on new accommodation. You can charge whatever you want. You can put in whatever you want. You can decide: "Here is the rate of return that I want. I'm going to build it." What is stopping you from doing that?
Mr Marchese: Barbara Hall.
Mr Herman: It's a lack of confidence in the government. It's a fear of people like Mr Marcheese getting back into power and bringing in legislation that judges have called odious and offensive, which is pretty strong language coming from judges of the Supreme Court of Ontario.
Mr Marchese: Mr Herman, just before you leave --
The Chair: Mr Marchese, you've had your turn.
Mr Marchese: You've heard the name. You've been here for a while. It's Marchese.
Mr Herman: I stand corrected.
The Chair: Have you finished, Mr Kwinter?
Mr Kwinter: No. I'd like to go on if I can.
The Chair: One short question, if your question is very brief.
Mr Herman: It's lack of confidence in the government. Housing is a very long-term plan. It's an obligation that you have to the banks for 10 to 20 years, especially if you're building rental accommodation, and nobody is going to do it without confidence in the government.
The Chair: Very brief, Mr Kwinter.
Mr Kwinter: This government has been in power now for two years. There has not been any appreciable increase in rental accommodation. How do you respond to that?
Mr Marchese: It's coming.
Mr Herman: The legislation hasn't even been passed yet.
Mr Marchese: The good times are coming.
The Chair: Mr Marchese, be good.
Mr Marchese: If it wasn't for the NDP --
The Chair: Thank you very much, sir, for coming.
Mr Herman: Thank you for taking the time to listen to me.
ASLAM AHMED
The Chair: The last word goes to Mr Aslam Ahmed. Sir, I believe you're next.
Mr Aslam Ahmed: Thank you for inviting me. I'm a bit nervous. I have never spoken to a committee before.
The Chair: I'll try and keep order here. They're pretty rough, but they'll be good for you.
Mr Marchese: I'll do my best.
Mr Ahmed: I'll actually read out a statement to you and relate my experiences, and then if you have any questions, you can ask me.
Honourable members, I would like to place before you my concerns regarding the use of income criteria and credit rating for the purposes of determining the eligibility for rental accommodation. I am a victim of the use of such criteria as above.
I arrived in Canada in late 1989 with my spouse and infant child, and towards the end of October 1989, after spending a few weeks with friends, I applied for rental accommodation managed by the Shelter Corp of Canada. After due formalities, I was informed by the rental agent that I should come for the keys after two days. I ordered the furniture from Woolco and gave them my new address.
When I went for the keys, I was informed by the rental agent that I had been refused the accommodation, as I had no credit rating. I became emotionally distraught. I could not understand the reasoning for the refusal and pleaded with Shelter Corp to allow me the accommodation, as I had nowhere to go and I could not abuse the hospitality of my friends.
We are neither rich nor poor. We are average Canadians. However, we offered additional money as security, and my friend even offered to cosign the rental agreement. But the officers of Shelter Corp were not moved to allow us the rental accommodation. It was almost as if we were being pronounced guilty of an offence that we had not committed. Please accept my assurances, kind sirs, that we have not had the misfortune of defaulting on any obligation that we have contracted. We are not deserving of such inhumanity.
As I watch with some trepidation the erosion of our much admired civil society in Ontario, I cannot help feeling that the proposed bill will create a divisive society with ills reminiscent of the Third World. The bill, if enacted, will discriminate against newcomers to Canada and young persons starting out on their own.
Am I permitted to say that the default rate for rent is a fraction of the rate of vacancy? Then why this onerous legislation? The criteria to use income and credit rating are inconsistent with the needs and not just ideals of an inclusive society. We as Canadians are all that now. We do not need to regress into a Third World realm. Thank you.
The Chair: For someone who's nervous, sir, you gave an excellent statement. Questions from the government? The government passes.
Mr Kwinter: Thank you for your presentation. It's interesting to have someone who's actually experienced this particular situation. I'm sure you know that Commissioner Norton of the Human Rights Commission has strongly criticized this government for proposing these kinds of criteria. It's a reverse onus. What they're saying is that if you have no credit rating, then we're not going to give you anything. To my mind, there's ample opportunity for a landlord to check out a tenant to see if there is a negative credit rating or a negative history, and they can then make a judgement based on that. I don't think anybody is advocating not doing that.
What we have, though, under this provision is that a landlord could on the basis of no history, no credit rating, automatically decide that because I don't know him, I'm not going to take him, whereas if you can come up with your first month and your last month and, as I say, if there's no adverse record, then I agree that should not be the basis for a rejection as a tenant.
Mr Ahmed: I'm in agreement with you there. We do not need this. It's very onerous, actually, for people. If the committee wants, I will present some more evidence. I have friends and relations who have come here and ended up with the same problem and worse. My own first cousin came recently and the landlord demanded six months' rent and he went and paid the six months' rent. I told him, "This is illegal out here." He said: "What can I do? Tell me."
Mr Kwinter: How did you resolve your problem?
Mr Ahmed: There was another landlord. I went to another place and this gentleman was quite kind and he let me have the place. He didn't bother too much. There is inconsistency even in the manner in which they are applying this legislation. It creates discrimination, you see. Somebody who doesn't like my face can simply refuse me accommodation just because he doesn't like my face. It's quite intolerable in a society like ours. I think this is the best place in the world to live. I've lived here for so long now, but initially when you come here, it's a shock. You tell yourself: "Where have I come? I've come from one Third World to where, another one?" This is totally unacceptable in a civilized society. The court protects the landlords. If somebody's not going to pay their rent, you can throw them out, and everybody knows that. Why do you need this legislation?
Mr Marchese: Mr Ahmed, it's good to have your testimony, because the Conservative members need to hear individual testimony of this kind. Discrimination exists now. This section in that bill that you've spoken to will simply legitimize it and make it possible for landlords to feel good about doing it, so they wouldn't feel bad about doing it already.
Keith Norton, the chief commissioner of the Ontario Human Rights Commission -- and he was a former cabinet minister in a Conservative government -- came before this committee and said that what they are doing is highly discriminatory and will affect a lot of people. You're not alone in saying this. All we can hope is that these people on the other side are going to listen to people like you and hopefully will listen to one of their own, a former Conservative cabinet minister, who is saying this is highly discriminatory.
Mr Ahmed: I urge upon the members on the government side to reconsider this legislation and think very seriously about the effects it will have on newcomers and on young people starting out on their own. It doesn't have to be people coming from abroad. It could just as well be somebody coming in from Newfoundland. As you know, people in Newfoundland are not all that well endowed, or somebody from Saskatoon. What are you going to do about those people, not to speak of these newcomers who come here with a credit card from somewhere else? There's no credit rating for those, and this chap says, "I can't do anything about this credit card." It is very difficult.
The Chair: Mr Ahmed, thank you very much.
That concludes the presentations this afternoon. If I could have the committee's indulgence for a few moments before we adjourn, the committee will be travelling to Thunder Bay and holding hearings in the Valhalla Inn. The plane leaves Terminal 2 at 8:30. Presumably you've all received your packages with instructions as to what to do with respect to taxis or limousine. That call should be made the night before, tonight. If there are no questions, I will adjourn this hearing to Thunder Bay tomorrow, Wednesday, August 6, at 1 pm. Thank you.
The committee adjourned at 1740.