ONTARIO TENANT RENT INCREASE GUIDELINE FOR 2021 SHOULD BE 1.5% IF PASSED BY THE GOVERNMENT. ANNUAL INCREASE GIVEN TO LANDLORDS IS ACTUALLY AN INCREASE IN PROPERTY VALUE AND REVENUE - LANDLORDS BENEFIT TWICE EACH YEAR FROM THE INCREASE - 111 LAWTON BLVD
It is calculated using the Ontario Consumer Price Index, a Statistics Canada tool that measures inflation and economic conditions over a year. Data from June to May is used to determine the guideline for the following year.
Consumer Price Index for Ontario June 2019 - May 2020
| |||||||||||||||||||||||||||||||||||||
Previous rent increase guidelines
The chart below illustrates yearly rent increases, in Ontario, from 2016 to 2019. Increase for 2020 - 2.2%
| Year | Guideline (%) |
|---|---|
| 2019 | 1.8 |
| 2018 | 1.8 |
| 2017 | 1.5 |
| 2016 | 2.0 |
HOW A LANDLORD BENEFITS TWICE WITH THE ONTARIO ANNUAL RENT INCREASE
EXAMPLE:
Let’s use Akelius Canada Ltd. a corporate landlord owning 3506 apartment units within the city of Toronto on December 31, 2019.
We will estimate each apartment unit is rented out on average for $1300.00 per month. We do know in most cases the apartments are rented for far more than what I have quoted here.
Total revenue received in 2019 per month came to $4,557,800.00
Total revenue received in 2019 for the year came to $4,557,800.00 x 12 = $54,693,600.00.
HERE COME'S THE FUN PART
THE YEAR 2020
BENEFIT 1:
Based on just the revenue for 2019 - Revenue $54,693,600.00
The landlord is allowed to increase rents in Ontario by 2.2%. Increase in revenue based on the year, 2019 comes to an extra $1,203,259.20 for 2020.
BENEFIT 2:
This is the most important benefit to the corporate landlord Akelius Canada Ltd.
Property portfolio increases in value because of the added revenue forced onto Toronto tenants by the Ontario government and based on a capitalization rate located in their year-end financial statements 4.14% located on Page 3 https://mb.cision.com/Main/3302/3051707/1205125.pdf
With all expenses remaining the same from year to year and based solely on the extra $1,203,259.20 revenue the value of the Akelius Canada Ltd. Toronto property portfolio would increase by $29,064,231.88
BENEFIT 1:
Based on just the increased revenue for 2020 - Revenue $55,896,859.20
The landlord is allowed to increase rents in Ontario by 1.5%. Increase in revenue based on the year, 2020 comes to an extra $821,683.83 for 2021.
BENEFIT 2:
This is the most important benefit to the corporate landlord Akelius Canada Ltd.
Property portfolio increases in value because of the added revenue forced onto Toronto tenants by the Ontario government and based on a capitalization rate located in their year-end financial statements 3.76% located on Page 3 https://mb.cision.com/Main/3302/3102995/1241015.pdf
With all expenses remaining the same from year to year and based solely on the extra $821,683.83 revenue the value of the Akelius Canada Ltd. Toronto property portfolio would increase by $21,853,293.35
TOTAL OF BOTH BENEFITS FOR 2020 - 2021
| ||||||||||||||||||||||||
QUESTION: WHY DO TENANTS ALONG WITH THE ONTARIO GOVERNMENT ENRICH THESE CORPORATE LANDLORDS BY ALLOWING THEM A THIRD BENEFIT OF APPLYING TO THE LANDLORD AND TENANT BOARD FOR ABOVE GUIDELINE RENT INCREASES. IT’S TIME TO STOP THIS MADNESS.
Comments