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Tenant advocate questions the accuracy of CMHC, Rental Market Survey's rent statistics

Tenant activist, Robert Levitt, who runs the Ontario Tenants' Rights web site www.ontariotenants.ca questions the accuracy of Canada Mortgage and Housing Corporation's, twice yearly, Rental Market Survey, that follows rents and vacancy rates, specifically for the Ontario rental housing market, which are used in setting government housing policies.

Over the past decade the rent statistics may be showing rents as much as 5% lower than the basis for their 1997 statistics (due to the severing of parking from rents,) and rents statistics may eventually be depressed an addition of as much as another 10% when compared to 1997 (due to the severing of electricity costs from rents paid). This moderates, possibly greatly, the year to year comparisons CMHC makes in its reports as to changes in the market, and affects CMHC's conclusions as to their impacts. Robert Levitt says, "recent figures from CMHC undervalues actual rent costs, in comparison to those previously used by CMHC before 1998".

As the survey results do not include the services included or not included in the rents, and CMHC does not gather data on the costs of those services, the result of this in Ontario has been to artificially reduce the rate rents have been increasing as some landlords have begun severing hydro costs from rents since Ontario's Residential Tenancies Act, (RTA,) came into effect on January 31, 2007.

In an October 1, 2008, response from CMHC's National Manager, Housing Market Surveys, Pierre A. Lanciault, confirms that the published statistics do not take into account what services are or are not included in the rent statistics and that they have never compiled the costs of these services.

In effect, when CMHC compares rent figures from one year to the next, they are trying to compare apples to oranges because what services tenants are paying as part of their rents used in these "statistics" vary from year to year.

Hydro costs are being severed from rents that historically, overwhelmingly, (estimated as over 90% in the Toronto market by Robert Levitt,) included it, at the behest of the Ontario government of Dalton McGuinty, the Ontario Power Authority, Local electricity Distribution Companies (LDC's,) and landlords. The government's and hydro companies' motivation is to encourage the use of "smart meters" as is demanded in Sections 137 and 138 of the RTA, and though these sections of the Act are the only ones not yet proclaimed into law, some landlords have been unilaterally, or by agreement with the tenants, severing hydro costs from tenants' existing leases to jump the gun before regulations are set in place as to how to fairly calculate the amounts the rent should be decreased for severing of these costs.

When electricity costs are severed from rents, landlords have no way to know what of the total building hydro costs are due to common costs such as for elevators, hallway lighting and fans, and that which is for the individual use of tenants. So even good landlords will tend to underestimate the hydro costs of tenants so as to protect themselves and reduce rents by a minimal amount. Whereas unscrupulous landlords have been unilaterally severing hydro costs and leaving it to the Landlord and Tenant Board to settle the amount of rent decrease, or "negotiating" with tenants the reduction while telling tenants that the cost of hydro is $30 or $40 a month and agreeing to reduce the rents by that much, only for the tenants to find that their hydro cost are substantially higher, a backdoor way of getting huge rent increases that will never be reflected in the CMHC rent statistics.

Similarly, historically most rents used to include parking, but since Vacancy Decontrol, where landlords may increase rents or change lease terms in an unregulated manner when rental units become vacant, came into effect under the old Tenant Protection Act on or after June 17, 1998, and this now continues under the present government's Residential Tenancies Act, parking is now in most leases a separate charge in addition to rents that in the Toronto market typically add 5% on top of the rent.

Levitt concluded, "Due to these inadequacies I believe these statistics are unreliable and I urge CMHC and the federal government to spend the extra money to survey the costs of services included or not included in rents, and to make this an integral part of the Rental Market Survey. Additionally, the government of the Province of Ontario is urged to stop the severing of hydro costs from tenants' rents and the installation of smart meters until the matter of a fair method of calculation of individual hydro costs of rents that include hydro can be ascertained if the severing of these costs are to be permitted at all."