Rent increase approved, but it's the lowest ever

NEWS RELEASE

ONTARIO MINISTRY OF MUNICIPAL AFFAIRS AND HOUSING

************************* Ontario rent increase guideline lowest in history

2008 guideline 1.4 per cent

TORONTO, July 3 - The rent increase guideline for the year 2008 will be 1.4 per cent, the lowest guideline in the history of rent regulation in Ontario. The 2008 guideline was calculated for the first time under the new Residential Tenancies Act, and is based upon the Ontario Consumer Price Index. "Our goal is to protect tenants from receiving a rent increase well above the rate of inflation," said Minister of Municipal Affairs and Housing John Gerretsen. "By linking the rent increase guideline to the Ontario Consumer Price Index, we've ensured that landlords can recover the increase in their costs, while tenants can still pay their rent." The rent increase guideline is the maximum amount by which a landlord can increase the rent of a tenant without seeking the approval of the Landlord and Tenant Board.

Most tenants in Ontario receive an annual rent increase that is at or below the amount of the guideline. The first rent increase guideline was announced in 1975. Guidelines have been calculated each year since, ranging between 1.5 per cent and eight per cent.

The new Residential Tenancies Act took effect on January 31, 2007, creating a new system of rent regulation that includes linking the annual rent increase guideline to the Ontario Consumer Price Index, a measure of inflation calculated by Statistics Canada.

The 2008 guideline applies to a rent increase that occurs between January 1 and December 31, 2008.

************************* Backgrounder - 2008 rent increase guideline The 2008 rent increase guideline is 1.4 per cent. It applies to rent increases that occur in Ontario between January 1 and December 31, 2008. The guideline is the maximum amount that a landlord can increase the rent of a tenant without obtaining the approval of the Landlord and Tenant Board. The guideline applies to most private residential rental accommodation covered by the Residential Tenancies Act. Rent increase guideline doesn't apply to:

- Vacant residential units.

- Residential units first occupied on or after November 1, 1991.

- Social housing units.

- Nursing homes.

- Commercial property.

Timing of rent increases

In most cases, the rent for a unit can be increased if at least 12 months have passed since a tenant first moved in, or if at least 12 months have passed since the last rent increase. A tenant must be given proper written notice of a rent increase at least 90 days before the rent increase takes effect. A landlord who wishes to increase the rent by an amount higher than the guideline must apply to the Landlord and Tenant Board.

Calculation of the rent increase guideline

The 2008 guideline is the first guideline to be calculated under the new Residential Tenancies Act, which took effect on January 31, 2007. Under the new act, the guideline is calculated based upon the Ontario Consumer Price Index. The Ontario Consumer Price Index is calculated monthly by Statistics Canada, and is regarded as a reliable and objective measure of inflation, charting the change in the price of all goods and services in the provincial economy. The 2008 rent increase guideline was calculated by averaging the percentage increase in the Ontario Consumer Price Index for each of the previous 12 months from June 2006 to May 2007.

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