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Ben Sage, Moving Woodstock

The Provincial Government is about to destroy yet another small business…

Posted on September 29, 2017 by Ben Sage in Investment Real Estate, Woodstock Ontario Real Estate

I don’t blog often.  Everyone tells me I should do it more, but I don’t.  I don’t often have anything to say that isn’t already being said.  And I can be kindof opinionated…  So I need to be careful….

However, I truly believe that there is a VERY dangerous piece of legislation on the table in Parliament, and it doesn’t seem like anyone is talking about it.

This is the REAL RENT CONTROL bill.  Bill 144. 

This part really gets to me:

113 Subject to section 111, the lawful rent for the first rental period for a new tenant under a new tenancy agreement is,

  (a)  any amount that is equal to or less than the last lawful rent charged or that ought to have been charged to the previous tenant if the rental unit was previously rented in the last 12 months;

  (b)  with respect to a rental unit that has not been rented in the last 12 months, an amount that is equal to or less than the sum of,

           (i)  the last lawful rent charged or that ought to have been charged to the previous tenant,

          (ii)  all increases to the rent that the landlord would have been permitted to make under this Act if the rental unit had been occupied, and

         (iii)  all decreases to the rent that the landlord would have been required to make under this Act if the rental unit had been occupied; or  

   (c)  the rent first charged to the tenant if the rental unit was not previously rented.”

In other words, if this bill is passed as written, LANDLORDS WILL NOT BE ABLE TO ADJUST RENT, EVEN BETWEEN TENANTS.

Does this seem like a good idea to ANYONE?

Lets brainstorm a few reasons this is a terrible idea:

  • This lessens any incentive to create more rental / affordable housing inventory. Already a HUGE problem, and getting worse.
  • This removes incentive for investors to purchase and supply badly needed rental properties.
  • This makes repairing units, cleaning units, even MAINTAINING units between tenants virtually impossible.
  • This exposes landlords who include utilities (many lower cost rentals include utilities) to increased risk, and inability to recoup rising ENERGY costs (etc).
  • Is dictation of retail prices anti-competitive?  Aren’t there laws that specifically “…ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy”
  • This disallows Landlords to adjust rent based on changing market dynamics. Business are free to change prices according to market dynamics.  It is called SUPPLY AND DEMAND.
  • No other industry is subject to price control by a government registry, are they?
  • Small businesses (property ownership/management counts) creates JOBS.  Tradespeople to fix things. Property management. Etc.  Those bills won’t be paid if income can’t support it.
  • If passed, this legislation will DESTROY the property values of many small business owners who have a handful of doors, and are relying on potentially selling, refinancing, or holding their investment properties to fund their retirements (BECAUSE NOT EVERYONE HAS A PENSION – SOME PEOPLE NEED TO RISK THEIR SAVINGS by INVESTING in order to CREATE THEIR OWN RETIREMENT INCOME).

Landlords should be free to price their units according to what the market will bear.  I get the “socialist” tendencies of this legislation, however, we do not live in a communist country.  If the government sees that the province needs more properties to rent, there are other, FAR MORE EFFECTIVE ways of accomplishing this.  A disincentive to create more rental inventory runs counter to the ACTUAL needs of Ontarians.  The FREE MARKET should dictate what a property is worth, in terms of sale price, and rental income.

For years, the landlord business has become less and less attractive to good, fair, honest, and ethical business people, because the laws so greatly favour tenants.  It appears as though entrepreneurs and small business owners are now going to subjected to more taxation, and virtually none of the benefits that employed / public servants enjoy, and now subject to draconian rent control guidelines by a meddling government who thinks that “budgets balance themselves.” (Yes I know that was Trudeau who said that, but fiscally, Liberals all seem to be cut from the same cloth). And yes I am aware that this private members bill was tabled by an NDP MPP (Which makes some sense), but it HAS PASSED FIRST READING…..

It’s all good for the government to just demand more money when costs go up, or if they simply deem taxes to be “unfair.”  But no way in hell should landlords and small business owners be able to do such a thing.

Care to share some other ways that this is a horrible idea?

Do you disagree?  Explain to me why you think this is a GOOD idea for Ontario?  I love arguing on the internet. 🙂

 


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