Toronto’s real estate market keeps defying bubble-bursting odds by posting record sales month-after-month. Those gravity-defying prices also extend to the city’s rental market, driven by condominium rentals in short supply, despite the rapid pace of new developments.
It came as quite a shock this week for many of those condo renters who received letters informing them that their rent was increasing by more than 100%. AJ Merrick and Jon Moorhouse, speaking to CBC News noted that their rent would increase to $3,320 from $1,600. The letter they received from their landlord informed that they would have to accept the increase or leave before July 1. "I thought it was an April Fools joke," said Merrick. “There's no way I'd pay that much for this apartment."
Unfortunately Merrick and Moorhouse rented in a building built before 1991, and as a result of a loophole in provincial legislation, renters living in buildings constructed in that year or later are not protected by rent control. The loophole has created a messy two-tiered system that is dramatically evident in Toronto that is explained in this CBC News video:
There’s little legal recourse for the two men and others who have also received sky-high rent increases in recent days. While it won’t help these renters, the “1991 loophole” may be coming to an end as a result of increased public scrutiny. Premier Kathleen Wynne spoke to reporters and suggested that the legislation’s days may be numbered because so few rental buildings have been built in the city, adding that the argument to keep the loophole in place is not valid.
In the meantime, Toronto’s real estate market
shows no signs of slowing down, with home prices soaring 33% in March, pushing the average house price to $916,000.