'I don’t know where to go': Toronto renters scramble to find affordable housing as landlords hike rent, undo ‘COVID discounts’

Sachit, 24, has been living at a condo next to Wellesley station for almost three years now. He believes himself lucky during COVID because he snagged a deal of $1700 for a one-bedroom apartment—nearly unimaginable today in downtown Toronto.

Now, his landlord wants to increase his rent to $2,600 because he believes it’s the fair market price.

Sachit fought back citing the 2.5 per cent rent cap in Ontario. Now they’re trying to find ways to evict him.

“They’re trying to push the rent increase pretty hard,” Sachit says. “I recently got an email again mentioning we’ll be getting our leases soon with the new rent but they have not mentioned how much. I disputed it again, but I haven’t heard back since.”

Worried that soon he’ll run out of options, Sachit is already looking for places to rent downtown.

“I don’t think I have the capacity to fight back and dispute the rent if they come out with a higher increase and don’t budge,” he says.

“So I’m trying to fight back because I do know my rights and I know it’s not easy for them to kick me out, but looking for places isn’t the worst idea. Ideally I want to stay here because the rents in Toronto are crazy right now.”

This isn’t the only case in the city. As inflation is on the rise, landlords are fighting hard to increase rents in the post-COVID world, leaving many tenants distraught.

A Reddit user is facing a similar situation as their landlord recently proposed a rent increase of $250, which is above the agreed rent increase.

The landlord’s reasoning for the increase in rent is that the tenants were given a “discounted rate” for the duration of their entire lease. According to the user, the conversation in question about the rent discount never occurred and they ended up signing an ambiguous lease about the discount.

Are landlords allowed to dramatically boost rent?

According to Damian Williams from Williams Legal Services, Above Guideline Increases, or AGIs, in such cases are allowed—however, there is a proper method to do it.

“An AGI needs to be presented through a proper form to the Landlord and Tenant Board (LTB) so that all the parties are aware and the opposing party can attest to the AGI in the instance,” Damian says.

“Usually, you see AGIs in low-income buildings. But now we’re seeing it as a result of COVID. A lot of landlords are trying to recuperate costs due to rent freezes, so now they’re trying to do a rent increase for people who have lived in these units for decades,” he added.

When COVID-19 struck in 2020, landlords in Ontario were left scrambling to look for tenants as demand dropped. As the influx of international students and immigrants coming into the country every year stopped and the entire world came to a halt, vacancy rates went up and landlords dropped rents to attract new tenants.

According to a report by Canada Housing and Mortgage Corporation (CHMC), the overall vacancy rate of rental housing in Toronto increased to a “14-year high” of 3.4 per cent in 2020, while an average 2-bedroom apartment cost $1,622.

Immigrants, non-permanent residents, and postsecondary students make up the majority of typical renter households in Ontario, according to CHMC. Therefore, the pandemic caused the Ontario market to lose more than 40,000 immigrants.

The lingering effects of the pandemic continued to impact demand in the market in 2021 as the vacancy rate of rental units in Toronto increased to another record-high of 4.4 per cent, while the average cost of a 2-bedroom unit hovered around $1,666.

According to CHMC, “average rent growth for apartments slowed to its lowest level since 2007 owing to increased competition among landlords” and the provincial pandemic response measures freezing residential rents in 2021.

Landlords decreased rents and introduced “COVID discounts” to lure people into moving into cheaper rental units. The only problem with that was the renters didn’t know it would backfire this badly.

Horror stories have surfaced on Reddit of landlords trying to kick their tenants out or increase rent above guidelines post COVID, while tenants try to navigate the legal waters of their rights.

What rights do landlords have when it comes to evicting their tenants?

According to Damian, landlords have a right to evict tenants as long as they have certain grounds. In ambiguous cases where landlords want their tenants gone so they can price the house at a current market rate, they use a tactic called N12 evictions.

This is when the landlord requires possession of the rental unit for personal use. For instance, the landlord or the landlord’s spouse, a child or parent, or any family member wishes to use the unit.

“However, there is also, unfortunately a dark side of the N12 eviction which more often than not happens to be a false pretense that there is in fact a family member intending to move in when that’s not the case,” Damian says.

“The case happens to be that they put it down under that false pretense so that the tenant vacates the unit and they’re able to rent the unit at a higher rate. More relative to the current market rate or even higher depending on the market’s current demand.”

However, according to the Tribunals court, the tenants are still somewhat protected. The landlord must give the tenant a 60 days notice and he/she must pay the tenant an amount equal to one month’s rent no later than the termination date on the Form N12 or offer the tenant another unit that the tenant accepts.

The tenant can dispute it, or if they discover later that the eviction was done in bad faith, the tenant can always file a case against the landlord.

According to Damian, there has been an increase in bad faith evictions after the pandemic.

“Rental units, especially in certain areas such as Toronto, have been becoming increasingly desirable. It’s a simple matter of want vs need. So, a lot of landlords are taking advantage of the situation at hand and trying to wrongfully evict the tenants in hope of attracting tenants that are willing to pay more,” he says.

Many tenants do not know their rights or are kept in the dark purposefully by the landlords. Tenants who think are facing bad faith evictions can always refer to the Landlord and Tenant Board in Ontario or use services offered at various Legal clinics in Ontario.