RENT CONTROL MYTHS vs. THE FACTS Minister, Al Leach, said on June 12, 1997, "All of these protections... remain in place for tenants as long as the tenant continues to live in the apartment." The result of Bill 96 is that many people will be financial prisoners of their apartments. Should they need to move to be close to a job, whether it be a new job or a job to get off of government assistance, move due to changing family size, move due to a changing financial situation, or to get away from a threatening domestic situation; they are not protected. Conversely, Vacancy Decontrol in Bill 96 is a direct financial incentive for unscrupulous landlords to force tenants out, so they can raise the rents as much as they can get away with. On that same day, the Minister said, "if harassment occurs, an enforcement unit in my ministry takes action. And the current maximum fine for... harassing a tenant is $25,000." The Minister's PA, Mr. Gilchrist, called the doubling of the maximum fines "staggering". Property Standard's violations are also being doubled from $50,000 to $100,000. Yet, in 1996, under this government, there were fines for both harassment and standards violations totalling only $63,200 for 57 charges, for an average fine of only $1,109. This amounts to nothing more that a license fee to permit harassment and violations. Claiming that doubling maximums will fix the problems, when no fine ever comes close to maximum, is a staggering deception on the government's part. The government likes to label such legitimate concerns as "fearmongering." Yet, on March 7, 1997, I attended a landlord's seminar sponsored by Coinamatic, which had Derek Lobo, a Sarnia and Brantford landlord as its speaker. Mr. Lobo said when you raise the rents you should give tenants a sheet saying you want them to stay and outlining how very high the cost of moving is, to dissuade them from moving. He also did not seem to care about Bill 96 even after it had been out for over 3 months, because he said you should get as much as you can out of sitting tenants but before you give them increases you should test the market with new tenants to see "what the market will bear." But the really offensive suggestion he made was that "good pet owner's will be willing to pay extra rent" for their pets and that perhaps "$1 per pound" of pet should be added to the monthly rent. I never got to ask Mr. Lobo, whether perhaps seeing-eye dog owner's should be charged even more because they must really want to keep their animals! Mr. Leach said before this Committee, on June 12th, "Rent Control has got to go." This has obviously been the goal all along, as Mr. Leach has repeatedly stated his goal is to "let the markets control rents". The term John Parker, P.C. M.P.P. came up with was the term, "Trojan Horse," (though he was trying to unsuccessfully convince the audience that it was not a Trojan Horse.) And that is exactly what Vacancy Decontrol in Bill 96 is, its a Trojan Horse to make people complacent that they are safe as long as they stay in the very same unit. Either through attrition, since some 70% of tenants move at least once in every 5 year period, or by surprise by future legislation that will wipe it out entirely, all real control over rents will be eliminated by this government against the wishes of the citizens and this government's election promises. Of course there are backup methods to emasculate Rent Controls. To quote one of the "Pros" cited in the June 1996 issue of the landlord lobby group, FRPO's, newsletter: "Elimination of the Rent Registry. The absence of a Rent Registry will make it virtually impossible for any future government to reimpose strict controls based on former rents." Unlike their newsletter to their fellow landlords, FRPO (the Fair Rental Policy Organization of Ontario,) was less than frank with this committee. They talked about rent controls being harmful and wrote, "Economists are united in their consensus that rent controls ultimately lead to a deterioration in the quantity and quality of rental housing." This statement is completely false; perhaps this is why they don't try to substantiate their many claims. Professors of Economics, Frank Denton, Andrew Muller Ph.D in Economics, Leslie Robb Ph.D, Christine Feaver, and Byron G. Spencer Ph.D in Economics, all of the Economics department of McMaster University, completely disagree with FRPO, in their report: Testing Hypotheses About Rent Controls. This study was an independent statistical study commissioned by Canada Mortgage and Housing Corporation, which found that "there is no convincing evidence that controls affect the responsiveness of apartment unit starts to either vacancy rates or rents," and that "there is no evidence that controls increase the proportion of occupied rental dwellings in need of major repairs." This compares with the Greg Lampert report, which as part of its Terms of Reference used an "industry report" as its basis and had to consult both on September 14, and November 9, 1995, with the following special interest groups: the Fair Rental Policy Organization, the Urban Development Institute, the Greater Toronto Home Builder's Association, the Ontario Home Builder's Association, the Canadian Banker's Association, the Metro Toronto Apartment Builder's Association and the Ontario Association of Architects. Mr. Lampert's hands were tied by the Ministry's Terms of Reference, and his report had to be based upon the "industry insiders" and consult exclusively with them. Nowhere does he say that Rent Controls caused any of the problems only that the landlords and builders claim they are a psychological barrier to construction, with no evidence whatsoever to back up these claims. There is simple evidence to the truth in the example of British Columbia. In spite of the claims Mr. Leach made last summer that it was the NDP in B.C. who ended Rent Controls there, a claim repeated by others including by Mr. John Parker in a televised debate on April 25th, 1997, it is not so, this is just another myth being perpetrated by this government. It was in fact the Social Credit government who repealed controls in B.C. in 1983. They promised the people of B.C. that thousands of new units would be built and thousands of new jobs created; very similar to the unsupported claims Mr. Leach made in the June 13, 1997, Toronto Star. In B.C., just the opposite happened. In 1982, with Rent Controls, about 8000 private sector rental units were constructed, which dropped every year without controls to about 1000 annual units in 1986. Landlords demanded mortgage subsidies from B.C., which they got in 1989, but annual construction to this day still has not exceeded 2500 units, less than one third of the 1982 levels. The promised units and jobs never materialized. There are similar claims that Rent Controls are the reason construction stopped in the 1970's but if you look at the chart on page 17 of the Ontario government's own New Directions paper, you will see that construction starts started plummeting after 1972, three years before Rent Controls came into effect, but coinciding with the 1972 federal and provincial tax restructuring. It was that restructuring, that eliminated many tax incentives including depreciation allowances and subsidies, that lead to the drop in construction. Apartments are not just a commodity, they are part of community infrastructure that was built with the assistance of taxpayers through tax breaks and subsidies. A University of British Columbia study called, Urban Rental Housing in Canada 1900 to 1985, shows there has always been a shortage of rental housing without government intervention. It is what University of Toronto professor, David Hulchanski, calls "market failure." The "free market" will never provide the needed units, especially at the low-priced end of the market. Rent controls keep on getting blamed for lack of construction, poor maintenance and everything short of atmospheric ozone depletion. But the Urban Development Institute in their speech before this Committee (June 19, 1997,) blamed items such as taxation, development charges and the cost of serviced land for the lack of construction. When questioned further they could only label Rent Controls as a psychological barrier to construction without providing evidence to this claim. Just a few weeks ago, the East York building inspector, Mayor Prue, the landlord, and the 91 Cosburn Avenue Tenants' Association, gathered after an inspection of the building. Jeffrey Wynn, the landlord, said some of the repairs could not be done for two years because he could not afford them. He didn't blame his company's financial woes on Rent Controls, he blamed it on having just bought and additional 720 units in two buildings in Parkdale to add to their existing 18 highrise buildings. On December 3, 1996, in a speech to the Fair Rental Policy Organization, Housing Minister Al Leach said, "We've eliminated the `cost no longer borne' provisions for capital expenditures. All told we want to make it easier for you to cover maintenance costs ..." Without this provision, not only does a tenants' rent go up to pay for repairs and renovations, but once the increase has paid off the work done, it remains; that is the tenant pays for it forever even after they have paid it off for the landlord! This is a financial incentive for landlords to do unnecessary renovations and to amortize it in as short a period of time to try to get the biggest rent increase possible. This goes well beyond covering costs and is totally unfair to tenants. It is amazing that this government gives so much special consideration to an extremist and possibly violent landlord lobby group: the Fair Rental Policy Organization. I still remember the 1991 demonstration organized by them, which included burning effigies of the Premier and Housing Minister of that time and throwing the burning effigies onto the steps of the legislature. This was an affront to the Legislature both architecturally, and to the system of democracy and values it embodies. They should have been arrested but weren't. Now, this government embraces this group, when it should be escorting them into the building with O.P.P. to ensure security. Mr. Leach says that the annual 10% average profits for landlords over the past 10 years reported in the very respected Globe and Mail Report on Business are false. The government is claiming that landlords are only making 2 to 4%. But on the July 20, 1996, Global Television's Focus Ontario program, Philip Dewan did not dispute the Globe report, he just compared 10% to the rates he falsely inflated for Ontario Savings Bonds. I have here some building sales sheets from a P.C. Party contributor, J.J. Barnicke, Ltd., and they are claiming Returns on Equity of: 14.4%, 18.2%, 16.7%, 17.6%, 23.7% and 11%; not the 2 to 4% the government is suddenly claiming. The government is getting so desperate for numbers that might appear to support their position, they have a new one they keep quoting: "that 80% of apartment buildings are six units or less and are owned by small businessmen..." The percentage of buildings by size is irrelevant as a very small community might have 4 buildings of 6 units and one of 216 units (the same size as the building I live in). In this example 80% of all buildings are the small ones, (the same as in the government's quote,) but 90% of the units are in the big building. As for being owned by small businessmen, that appears to be another unsupported claim. I know my landlord who runs 4,414 units in large buildings out of one office also owns at least a few houses he is renting out. I know this because he gives the residents of the houses next to my building, my building's entrance cards so they can use our laundry room. They at first thought they were dealing with a "small businessman," but these houses obviously are not owned by a small businessman. Corporate names also are not an indicator of number of landlords because there are several companies all operating out of the same office, and who knows if he has dozens more numbered companies I don't know about. I have even requested the source of Mr. Leach's claim from the Ministry, but as has been their habit, they have not answered my inquiry, and I will be forced to once again do a Freedom of Information Request to see if there is any basis for these government claims. Bill Saunderson, P.C. M.P.P., promised during the 1995 Ontario election campaign that "Mike Harris will strengthen rent controls, not cancel them," and Derwyn Shea promised that Rent Controls would only be removed from "not yet constructed buildings." In July 1996, Bill Saunderson did some fancy footwork to his constituents, claiming that "Tenants' rights will not change under the Landlord Tenant Act," but then maybe his explanation for ending so many rights is that they are not changing under that Act as his government is repealing that Act? These M.P.P.'s have publicly misled the citizens of this province. Mike Harris in the Toronto Star Leader's debate of April 3, 1995, and since requoted in P.C. Party of Ontario campaign literature, Mike Harris said, "The current rent control program is not working very well for tenants. We want to bring in a rent control program that will truly protect tenants and give them lower rents. We will replace nothing until we have a superior plan in place proven to work better." Bill 96, takes away the most important protections tenants have. It certainly will NOT lower rents. It seems that the Progressive Conservative Party of Ontario, now that it is the government, has NO interest in keeping its promises to the citizens of this province. On, Tuesday, August 6, 1996, Derwyn Shea, M.P.P., (my M.P.P.,) had a "Tenant Protection Seminar" at Loyola Arrupe Senior's Centre. At that time I asked him about the promise in the Common Sense Revolution book, to end government owned public housing and bring in a new shelter allowance subsidy program. I do not agree with such a program but I still asked about it, because there were estimates that it would cost the Ontario taxpayer a minimum of $700 million a year. Mr. Shea and his executive assistant, D'arcy Keane, whispered for a minute, and then Derwyn Shea replied that they had a Ministry report that said it would only cost $30 million a year. I asked for that report and he said he would send it to me; they never did and couldn't because no such report ever existed. And of course, instead of keeping their election promise which would raise the provincial deficit, the Harris government took the easy way out and just transferred all the expense and responsibility for public housing to the municipalities. On, Tuesday, May 20, 1997, Isabel Bassett, M.P.P., had a town hall meeting at York Minster Park Baptist Church. She said her government was one with "a social conscience that took special interest in seniors and the disabled." When I asked her about Section 93 of her government's Tenant "Protection" Act that puts seniors and disabled people at risk of loss of a home in the case of an unscrupulous care home operator, she replied that she knew nothing about tenant issues and I should give my name to her assistant who would look into the matter and get back to me. I was surprised that Ms. Bassett claimed no knowledge of such matters, considering that when I gave a deputation on Wednesday, August 21, 1996, Isabel Bassett was one of the representatives for the government sitting on the committee specifically for tenants' issues. I did give my name and phone number to Ms. Bassett's assistant but she never got back to me as promised. On, October 1, 1996, I wrote to the Minister of Municipal Affairs and Housing, to try to get the "Industry Report," a public document, that was the basis for the Lampert Report. They did not reply. I had to send a Freedom of Information (FOI) request on October 31, to receive the document. An interesting additional piece of information I requested as part of the FOI request, was the cost of the new (as of August 1996,) high security doors at the Ministry's offices at 777 Bay Street. The Minister spend some $77,000 dollars on the installation, more than two-and-a-half times the $29,500 they spent in total on both the Lampert and Todd reports that they claim are the basis for their policies that will affect over 3 million tenants in Ontario. It is easy to see where this governments' priorities lie. The Minister's constituency office sent me a notice of these hearings, that had been announced only in the legislature on June 2 while everybody was busy thinking about federal election day, (there was no official government notice placed publicly,) which had a deadline of noontime, Friday, June 6. Too bad the letter was dated June 5, 1997, and postmarked (as per the attached copy,) June 10; four days too late to register. I received the letter on June 12, 1997. If I had not had somebody call me up who had been watching the cable legislative channel, I would never had been able to register for this hearing. Then there is the new tribunal. Landlords can still make whole building applications, but now tenants will be forced to apply individually for every apartment if they want to make applications. This will not speed up the process as the government claims the tribunal will, unless it is by means of discouraging most tenant applications. Then there is the filing fee, which is not to be waived in any circumstance, which will likely be a barrier to the disabled and elderly as well as anybody on a fixed income or government benefits. A tribunal with these barriers is no protection whatsoever to the majority of tenants. Democracy is a slow and inefficient process. Governments' whose priorities are efficiency are sometimes less than democratic and honest. Recently, when asked by reporters what his favourite book was, Premier Harris said, "Mr. Silly." After reading and hearing all the unsubstantiated or outright false, and misleading statements being used by the government to support Bill 96, given the misnomer of the Tenant "Protection" Act, while it removes many of the most important protections tenants presently have, I am lead to wonder what books the architects of this misinformation have been reading? What comes to mind is the book Through The Looking Glass, by Lewis Carroll, and the passage: "But `glory' doesn't mean `a nice knock-down argument,'" Alice objected. "When `I' use a word," Humpty Dumpty said in a rather scornful tone, "it means just what I choose it to mean - neither more nor less."