FMTA Board Responds to Toronto Star Article

Two weeks ago, the FMTA board responded to an article in the Toronto Star where a landlord-group labelled pro-tenant measures related to the HST "unfair."

April 13, 2010

To The Editor
Toronto Star

Re: Landlords call Province's HST Measures Unfair

Landlords are playing a shell game with the facts to justify cutting back their maintenance costs and neglecting the needs of tenants in Toronto and across the Province.

Landlords are exaggerating the projected impact of the HST. Operating costs for a rental building in Toronto are less than 50% of rent charged as per the Ministry of Housing and Municipal Affairs and thousands of rent increase applications. The biggest cost is Municipal taxes and that is not subject to the HST. Other significant costs are management and staff salaries also not subject to HST. Items purchased are subject to HST, but in reality, they are already subject to both Provincial and Federal Sales tax - so there is no real change there.

The only serious impact of the HST is on the cost of heat and hydro. It's important that the Province not include the HST on these essential home costs. Approximately 20-25% of Toronto's tenants will start incurring this cost on July 1 of this year. What the Government is doing will prevent landlords from taking an extra increase in 2011 based on the HST, and then benefiting from a higher guideline in 2012 partly based on HST inflation.

What landlords are conveniently not saying is that the 2010 guideline (2.1%) is about triple the rate of inflation. Property tax for multi-residential buildings will go up less than 1% in 2010 in Toronto. In fact, over 128,000 rental units have recently experienced a drop in taxes of more than 2.5%. A further study of guideline increases over the last 25 years will show that the guideline has almost always met or exceeded the rate of inflation. And how about just a few years ago where tens of thousands of tenants were given extra permanent rent increases for a temporary spike in gas costs.

Short memories can be useful for landlords, but not looking at the whole picture is misleading.

Sincerely,

Effie Vlachoyannacos
Vice-Chair
Federation Metro Tenants Associations

David Pylyp With respect I would like to add this further comment.

You are absolutely right! The Largest Landlord in the City of Toronto Is the City of Toronto! You are absolutely correct about the numbers related to costs to heat and hydro are being increased relative to actual costs and subject to inflation.

What you have neglected to include is the opportunity cost of a landlord to invest their money into a condominium unit(s) or a small landlord style multiplex where their property taxes are Market Value Assessment based. While the rents are controlled by market, interior trim and what a willing tenant will pay, the Landlord must decide if the return on their investment is worth the challenges faced by renting in todays business climate. If there is no profit why bother investing?

Would they be better off with the money in the bank, term deposit, GIC, invest in Gold, Mutual Funds, as when compared to restrictions, numerous limitations and decisions made by the Landlord Tenant Tribunal. The LTT still provides free legal advice to Tenants.

I recommend that my Landlord's Video or digital picture a property prior to a new occupant, provide a new set of keys, request that third party Tenant insurance be placed on the property with a loss endorsement to the Landlord and Condominium Corporation. This package of photo's video's rules and regulation plus keys and cards for building access are then provided to the tenant with their copy of the lease.

Your comments are invited.

If a dispute about condition is created there is no confusion or debate about documents, condition or cleanliness.