Ontario’s new power over municipal rental replacement policies threatens the supply of affordable rental housing

As noted on the Ontario Regulatory Registry, s.99.1 of the Municipal Act, 2001 and s.111 of the City of Toronto Act, 2006 grant municipalities the authority to regulate or prohibit the demolition or conversion of residential rental properties with six units or more. Bill 23 proposes giving the Minister of Municipal Affairs and Housing new powers to impose limits and conditions on municipal authority in this area.

We are deeply concerned that this proposed new Ministerial power—particularly the wording of imposing “limits and conditions”—will erode the ways in which municipal rental replacement policies are being used to preserve affordable rental housing, protect tenants, and allow housing policies to be tailored to local interests and expertise.

Preserving the stock of affordable rental housing

Although few municipalities have implemented rental replacement policies, those that exist have helped to preserve Ontario’s affordable rental housing stock.

For example, the City of Toronto’s Official Plan amendments require that new developments that result in the loss of six or more rental units be replaced with housing that offers the same number, size, and type of rental units. It’s estimated that from this aspect of the City’s policy, over 4,000 rental units have been protected from being replaced over the past 15 years. Although the Province wishes to build more supply, an important piece of the housing puzzle is preserving and improving what is already there—and it’s clear that local rental replacement policies have been effective in achieving this goal.

The City of Toronto’s policy also requires that new developments that lead to the loss of six or more rental units be replaced by units with rent amounts equivalent to first occupancy and increased annually according to provincial guidelines, for a period of at least ten years. This aspect of the City’s policy is particularly important in preserving affordable rental housing in a climate of rising rents and high inflation, which disproportionally impacts people with low and moderate incomes. Moreover, it doesn’t take away the ability to increase annual rents in accordance with provincial guidelines, so that rents can still keep up with province-wide standards for rising costs, but by no more than this amount. As such, the Province already has purview in this area without a specific Ministerial power.

Protecting renters from displacement

It’s true that Bill 23 would not eliminate tenant rights as defined through the Residential Tenancies Act, 2006 (RTA). However, it’s important not to conflate tenant rights under the RTA with protections under rental replacement policies. For example, the City of Toronto’s policy requires that new developments that result in the loss of six or more residential rental units will not be approved unless an acceptable tenant relocation and assistance plan is offered to lessen hardship. This plan can include allowing tenants to return to the unit at a similar rent, offering them an alternative unit with similar rent, or providing them with another type of assistance. Without this policy, we’re concerned that existing tenants could be displaced without any assistance to support them.

Allowing local governments to tailor housing policies

Municipalities have the capacity to create housing policies that are tailored to their local, public interests and are based on both lived and technical expertise. It’s not clear why municipalities’ ability to regulate residential rental replacements is being challenged, and how the Minister would use its power to improve this situation. Instead, there are risks that the Minister’s new powers in this regard could lead to fewer affordable rental housing units.

In addition, we are concerned that the manner in which the Province’s consultations on this topic are taking place is not conducive to meaningful stakeholder engagement.

Since they are being held exclusively on the online Ontario Regulatory Registry, the Province is likely to receive feedback only from those who already know about the Registry, rather than the broad range of stakeholders who could be impacted. The questions guiding the consultations are also leading, in that they seem to imply that current rental replacement policies are unhelpful. In addition, the questions focus on what types of restrictions should be placed on municipalities, rather than seeking general feedback on how these policies work or what a provincial role might look like.

To this end, and with the considerations highlighted in this submission in mind, Maytree recommends that the government clarify the purpose and scope of the Minister’s new powers related to municipal rental replacement policies. This means:

1. Removing the words “imposing limits and conditions” from the amendments to the Municipal Act, 2001 and the City of Toronto Act, 2006 regarding the municipal role in the regulation of rental replacement policies. This wording implies that the Minister’s new powers will focus on preventing—rather than adding to or improving—policies that already exist in this area.
2. Publicly explaining why these changes are needed, the objectives of these changes, and the timeline for which they plan on being implemented. This would help to foster transparency and accountability.
3. Extending the time allotted for feedback provided through the Ontario Regulatory Registry and engaging in a meaningful consultation with a broader group of people who could be impacted by the proposed changes.