'Explosion' of above guideline rent increases pricing out some Toronto tenants, advocates say

Sharlene Henry and her fellow tenants at an apartment building in Toronto's Weston neighbourhood had never heard of above guideline rent increases (AGIs).

But after their previous landlord applied for AGIs six times in the last 10 years, Henry says almost all of her neighbours at 33 King St. are now intimately familiar with the acronym. 

"It affects your whole life," Henry told CBC News. 

"Many of us are families, young families in this building who are just trying to survive. And a lot of seniors in the building are on fixed incomes — paying $50 or $60 more a month for a whole year affects how they eat." 

Henry's building is one of five Toronto rental properties where CBC News found the owner had applied to the Landlord and Tenant Board for five or more AGIs to help cover the costs of major repairs or renovations within the last decade. 

Without approval from the Landlord and Tenant Board, landlords in Ontario are only allowed to increase rent for most existing tenants by the province's annual rent increase for inflation. This year that guideline is set at 1.2 per cent. AGIs allow landlords to tack on up to an additional three per cent per year.  

Although AGIs are legal under Ontario's Residential Tenancy Act to help cover the cost of capital expenses, tenants and tenant advocates argue they shouldn't be. Those who spoke with CBC News said corporate landlords are effectively using AGIs to maximize profits by pricing out long-term tenants who are otherwise protected by rent control. 

"You need to do a repair? Use the rent money for that. Use your profit. Get a loan," said Geordie Dent, executive director of the Federation of Metro Tenant Associations. 

"Landlords already have the money, they're just able to extract more because the government allows it."

But the province argues those repairs may not happen if landlords couldn't pass some of the cost off to tenants. In a statement, the Ministry of Municipal Affairs and Housing told CBC News AGIs "allow landlords to make capital-intensive upgrades to their units."

"This is a critical process to ensure that Ontario's housing stock remains safe and well-maintained," said spokesperson Matt Carter.

Dent says AGIs hurt those on fixed incomes — like seniors — the most. He told CBC News receiving a three per cent rent increase on top of what's been set for inflation two years in a row often means seniors have to move out of the building and the city altogether. 

"We see this all the time, specifically in buildings that get hit with a bunch of AGIs in a row," said Dent. 

The Federation of Metro Tenant Associations receives funding from the City of Toronto to help tenants dispute applications for AGIs at the Landlord and Tenant Board. In the last decade, Dent says the organization has seen an "explosion" of AGIs.