The Rent Increase Guideline for 2023 and Creating Affordable Housing Can Start with Two Policies

Written by Victoria Wan, Staff Lawyer, DVCLS, with updates to a January 2022 article by Karly Wilson, Staff Lawyer, DVCLS.

The Ontario rent increase guideline for 2023 is 2.5%, as announced by the provincial government on June 29, 2022. Based on the Residential Tenancies Act, 2006, 2.5% is the maximum guideline amount that the province can set. The guideline for 2022 is 1.2%.

The rent increase guideline is the maximum amount by which your landlord may increase your rent, if you are a tenant living in a rent controlled unit. The guideline applies during the calendar year, and is based on the Consumer Price Index.

If you are living in a unit that was not used as a residential space before November 15, 2018, your unit is not protected by rent control and your landlord can increase your rent by more than the guideline.

If the landlord wants to increase the rent, they must give a written notice to the tenant, at least 12 months since the last increase and at least 90 days before your rent is set to go up. This is usually called the Form N1 Notice of Rent Increase.

Addressing Illegal Rent Increases

An illegal rent increase is when the landlord did not provide proper notice or charges the tenant an amount above the rent guideline, without an Order from the Landlord and Tenant Board.

Tenants that received an illegal rent increase and have been paying a higher rent amount can file a T1 application with the Landlord and Tenant Board to determine their legal rent amount. Tenants can also ask for a rebate by calculating how much extra they have paid for up to 12 months.

Tenants should stop paying the higher rent amount immediately, and instead ensure that they pay their previous lawful rent on time and in full. If a tenant did not receive proper notice of a rent increase but still paid the increased amount for a period of 12 months, the tenant is deemed to have accepted the increase.

TIP: If you know that many units in your building were subject to an illegal rent increase in 2021, talk to your neighbours. A T1 Application costs $53 to file, but multiple tenants in the same building can bring an application together at a cost of only $5 for each extra unit.

A First Step to Affordable Housing: Put in Place Real Rent Control

In May 2022, the Advocacy Centre for Tenants Ontario (ACTO) commissioned a province-wide poll of Ontario renters. The Poll found that:

  • 60% of renters said they have had to cut back on food to afford their rents;
  • 74% had to cut back on their other spending to afford their rents.

One thing that the province can do overnight is put in place real rent control in the province. Over 80% of Ontario tenants believe there should be a limit to the amount landlords can increase the rent for a unit when it becomes vacant.

Two policies that the province can change now to make housing more affordable are:

1) Remove the November 15, 2018 exemption for rent control on new builds; and

2) Eliminate vacancy decontrol by creating a rent stabilization law that would ban unlimited rent increases in between tenants.

***This is legal information and not legal advice. If you need further information or need legal advice, please call our Intake Line at 416-441-1764 ext. 1 or complete our online Intake Form.***