TORONTO, ONTARIO -- (Marketwired) -- 04/21/17 -- Canadian Apartment Properties Real Estate Investment Trust ("CAPREIT") (TSX: CAR.UN) commented today on the proposed changes to rent controls announced yesterday by the Government of Ontario.
EXPANSION OF RENT CONTROLS - NO IMPACT ON CAPREIT'S REVENUES
The proposed change expands the limits on annual rent renewal increases to include apartment buildings built after 1991. These buildings were previously exempt from the annual rent increase guideline set by the Provincial Government. The guideline rent increase for 2017 is 1.5% in Ontario. Rental property owners can continue to apply for permission to raise rents higher than the guideline rent increase based on specified capital improvements made to individual properties.
Currently CAPREIT's total Ontario portfolio consists of 22,136 rental suites with only 812 suites, or 3.7%, constructed after 1991. As a resident-focused landlord, CAPREIT has consistently adhered to the government-mandated rent guidance increases on all of its Ontario properties, including those constructed after 1991. Thus the proposed change by the Government of Ontario will have no impact on CAPREIT's projected rental revenues.
PROPOSED CHANGES TO REDUCE NEW RENTAL DEVELOPMENT
CAPREIT believes the new rent controls being proposed by the Government of Ontario will adversely affect the supply of purpose-built rental properties, thereby decreasing the future inventory of available rental accommodation.
It is important to note that the proposed changes to rent controls apply only to annual rent increases for current residents. As new properties enter the market, the monthly rents will be established at that time. There is no proposed change to controlling what rent can be charged to new tenants.
"We believe that the proposed changes to Ontario's rent control legislation will in fact reduce the availability of future rental accommodation and thus only accelerate the already significant lack of available rental housing in the Province," commented Thomas Schwartz, President and CEO. "There are much better alternative policies the Government should consider that will ensure the development of new rental properties in Ontario while also protecting consumers from over-market increases in monthly rents. Supply and demand should regulate this market and these new policies will only result in reduced supply as demand for housing is increasing."
As one of Canada's largest residential landlords, CAPREIT is a growth-oriented investment trust owning interests in 48,773 residential units, comprising 42,322 residential suites and 31 manufactured home communities comprising 6,451 land lease sites located in and near major urban centres across Canada and The Netherlands. For more information about CAPREIT, its business and its investment highlights, please refer to our website at www.caprent.com or www.capreit.net and our public disclosure, which can be found under our profile at www.sedar.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
All statements in this press release that do not relate to historical facts constitute forward-looking statements. These statements represent CAPREIT's intentions, plans, expectations and beliefs and are subject to certain risks and uncertainties that could result in actual results differing materially from these forward-looking statements. These risks and uncertainties are more fully described in regulatory filings that can be obtained on SEDAR at www.sedar.com.
Mr. Michael Stein
Mr. Thomas Schwartz
President & CEO
Mr. Scott Cryer
Chief Financial Officer