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Rent History

Along with all the noise, dust and intrusion of 13 years of renovations, wild rent increases have become a fact of life in this building.

The province of Ontario has rent controls in place and they apply to this building. Each year they publish a Rent Increase Guideline that varies year to year with the cost of living. For 2023 this is set at 2.5%.

In the Renovation History we saw two ways landlords commonly circumvent the province's rent controls. The first is called Gentrification which relies on the rent-control's exemption for vacant apartments. The second, more troublesome, method is through Above Guideline Increases (AGI) which allow a landlord to apply to the Landlord Tenant Board (LTB) for permission to increase rent on occupied units by more than the provincial guideline.

I'm not a financier or a real estate tycoon. I won't pretend to fully understand the landlord side finances behind all the renovations and capital expenditures. Instead I will stay with the tenant-side focus for this, leaving you the with the simple reminder this is spending money to make money, obviously investor driven and landlords and their share holders must be taking a profit from it, otherwise they would not do it.

Gentrification

Gentrification is the business of taking something considered to be old fashioned and updating it to newer and more luxurious standards in order to attract a certain kind of "upper crust" person. In our case it means actively remodelling apartments as they become vacant. Some have been remodelled multiple times as the building was flipped to new landlords.

The current trend is ripping out walls to create "open concept" spaces, replacing cabinets and counter tops in the kitchens and bathrooms, installing kitchen islands, dishwashers and stainless steel appliances and putting in vinyl plank flooring.

All very luxurious, all rented at top market prices and it all walks right past Ontario's rent controls, allowing landlords to charge whatever they want for their newly luxurious treasures. The currently Advertised Rents are more than double what they were in 2007 when all this started.

The problem with this snobbish trend is that landlords seem to believe they are charging the right price, because tenants are paying it. In fact, with every other rental being just as costly, tenants have no real choice in the matter. They either pay the price or they end up homeless (and some do). This results in many people living on the brink of bankruptcy to pay exorbitant rent, albeit for really fancy apartments.

At the time of this writing, the rent for a bachelor apartment in this building is more than a single person on Ontario Disability Support receives each month.

Above Guideline Increases

Unlike Gentrification, an AGI is a complex lawsuit dumped right in the lap of an unsuspecting tenant. Through these rent increases, the landlord is literally suing his tenants, demanding they pay for some large project he did without their consent and quite possibly without their knowledge.

How can that be right?

Well, according to Ontario's Residential Tenancies Act in Part 126 this is a completely acceptable thing to do. In fact, it can result in rent increases above the provincial guideline by as much as 3% per year for three years, totalling 9%, and lasting for 12 to 15 years, on average.

This isn't automatic. The landlord has to satisfy an LTB adjudicator the work was structurally necessary and it requires approval in the form of a tribunal order. But very few tenants know how to defend against this, so most AGI cases go through with little or no challenge. In fact, many are settled by negotiation rather than in a formal hearing.

Here is a list of the AGI files and the items we've been through already:

(click the File# to view the hearing notice)
File#ItemLifetimeClaimed
SOL-26605 Common Area Renovations10 years157,983.00
Stairwell Painting10 years7,959.00
Elevator Cab Modernization15 years51,261.00
Toilet Replacement15 years27,859.65
Roof Replacement15 years68,964.00
Signage15 years18,507.79
SOL-40297-13 Fire System Repair15 years90,145.76
Roof Safety Anchors20 years16,249.63
Building Exterior & Balcony Repair
Painting the building exterior
13 years662,278.35
Common Area Painting10 years32,063.75
Replace Exhaust Fans20 years2,556.63
Garage Entrance Repair20 years12,725.63
Exterior Painting10 years2,648.72
Drain Repair20 years1,130.00
Building Signage15 years6,633.14
SOL-67472-16 Boiler System Replacement15 years255,278.30
SOL-80883-17 Parking Garage Repairs15 years1,178,160.61
Common Area10 years5,537.00
Roof Replacement15 years156,000.00
Total 2,753,671.96

Yes, you read that correctly. Since March of 2010 the various landlords who've controlled this building have litigated claims of $2.75 million in capital expenditures against their tenants. That is roughly $17,500 per apartment to be paid via increased rent.

Here is a summary of the above guideline increases these cases produced:

(click the File# to view the tribunal order)
File#StartingLifetimeExpiresIncrease
SOL-26605 2010-07-0113 years2023-07-010.5% - 2.00%
SOL-40297-13 2013-12-0113 years2026-12-014.76% - 5.62%
SOL-67472-16 2016-05-0115 years2031-05-011.25%
SOL-80883-17 2017-07-0115 years2032-07-017.4%
Total13.91% - 16.2%

These increases ride on top of the provincial guidelines and they compound. Further both SOL-40297-13 and SOL-80883-17 exceeded the annual maximum of 3% producing increases for more than one year giving us the following daisy chain of actual rent increases:

YearForwardGuidelineSOL-26605SOL-40297-13SOL-67472-16SOL-80883-17Total
201002.1%0.5% - 2.0%2.6% - 4.1%
20112.6% - 4.1%0.7%3.3% - 4.8%
20123.3% - 4.8%3.1%6.4% - 7.9%
20136.4% - 7.9%2.5%3%11.9% - 13.4%
201411.9% - 13.4%0.8%1.76%-2.62%14.46% - 16.82%
201514.46% - 16.82%1.6%16.06% - 18.42%
201616.06% - 18.42%2.0%1.25%19.31% - 21.67%
201719.31% - 21.67%1.5%2.5%23.31% - 25.67%
201823.31% - 25.67%1.8%2.5%27.61% - 29.97%
201927.61% - 29.97%1.8%2.4%31.81% - 34.17%
Expected17.9% Actual31.81% - 34.17%

So, using AGIs to boost rent, past landlords were able to almost double the rent increases for long term tenants from 2010 to 2019; 34% instead of 18%. (That is $340 on $1000 rent, by the way) The people who really got hit were the ones who moved in mid-way through all this and are paying one or two of these extra increases on top of near market value rents.

Nasty as this looks, I've seen worse. A couple of other buildings have had overlapping rent increases from AGIs and their rents just soared out of control. Landlords are using these things to circumvent the province's rent controls and they are doing it at our expense.

Happily there is a light at the end of this tunnel. When these orders reach their expiry dates the landlord is required, by law, to reduce our rents by the amount of the increases. It doesn't give us all our money back, but it does bring our rents down a bit. In the case of SOL-80883-17, for example, by 7.4%, or $74 on $1000 rent.

Looking Forward

CLV Group, our new landlord is extremely ambitious, and doing a lot of capital spending right now. They are going to want to recoup some of that, probably at our expense. It should be pretty obvious there are a series of AGIs and rent hikes on vacant apartments coming in the not so distant future.

Last Update: 2022-09-29
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