In 2024, Ontario’s rent control guidelines will see landlords able to raise rent by up to 2.5%. This number is steeped in a calculated measure, one that brings fairness and affordability into sharper focus for both landlords and tenants. Yet, while this limit is less than the average inflation rate of 5.9%, there are various factors at play that continue to shape the local rental market.
As we dive into Ontario’s rent increase policy, it’s vital to not overlook the crucial role of rent control. Rent control laws, established by the Government of Ontario, are designed to restrict the rate at which landlords can raise rents, providing a layer of security for tenants while ensuring a reasonable return for landlords. Simultaneously, the guideline set by the Ontario government aims to shield tenants from skyrocketing rental prices due to the current rate of inflation.
This annual rent-increase limit has been at play for quite some time. In 2021, the stipulated limit was 0% due to the worldwide pandemic, an indicator of the flexibility that these controls can display in response to significant events. This number was subsequently raised to 1.2% in 2022. The 2024 guidelines maintain a 2.5% increase, the same limit applied in 2023.
But how exactly is the 2.5% rent increase calculated? It’s primarily based on the Consumer Price Index for Ontario, a key indicator of inflation determined by Statistics Canada. The guideline is set to help shield tenants from warping interest rates, that without it, could potentially lead to a whopping rise of 5.9% in rents due to the current rate of inflation.
Interestingly, Ontario’s rent increase guide doesn’t blanket across all property types. It doesn’t apply to vacant residential properties, community housing, long-term care facilities, or commercial buildings. Moreover, it’s applicable solely for rental units occupied for the first time after November 15, 2018.
Maintaining a balance between fairness for landlords and affordability for tenants can be tricky. On one hand, landlords argue that the current rent control measures result in “unfair rent control increases”, as highlighted by a comment from a tenant with long-term leases. On the other, tenant security and affordability are primary concerns for regulatory bodies.
One thing is clear: whether it’s a time of crisis or prosperity, understanding local laws surrounding rent controls is crucial for both landlords and tenants. Knowing these details provides valuable knowledge to negotiate and navigate the rental market confidently, thereby fostering a harmonious and fair relationship between tenants and landlords.