Protecting tenants by expanding rent control in Ontario “should have been done some time ago,” Mayor Jim Watson said Thursday, in response to the province’s new blueprint to stabilize the real estate market and protect homebuyers and renters alike.

Premier Kathleen Wynne’s 16-point Fair Housing Plan will slap a new tax on foreign buyers, use surplus provincial land to build affordable housing and review rules for real estate agents.

Much of it was formulated with the Greater Toronto Area in mind, where there is a “significant problem” that needs to be solved, Watson said. The average selling price of a home in Ottawa rose by about 5.4 per cent in 2016, he said, while in Toronto, the year over year increase exceeded 30 per cent.

“We don’t have the same level of problems. Our real estate market is generally stable and reliable with not a lot of big peaks and valleys,” he said.

The new 15-per-cent non-resident speculation tax on buyers who are not citizens, permanent residents or Canadian corporations, for example, won’t apply here and there isn’t much vacant provincial land ripe for development within the city’s boundaries.

Ottawa Mayor Jim Watson at the Ottawa Citizen building in Ottawa on Jan. 11, 2017. TONY CALDWELL / POSTMEDIA NETWORK

Complaints about astronomical rent hikes aren’t something Watson hears about too often from residents, but he’s pleased the province will expand rent control to all private rental units, regardless of whether they were built before or after 1991.

“Rent control helps to level the playing field,” the mayor said.

But the move has generated some furious debate, with John Dickie of the Eastern Ontario Landlord Organization suggesting the province “isn’t interested in our rights.”

“The government isn’t interested in allowing us to make a return that makes us want to build more rental housing.”

Dickie added rent gouging by landlords is a “Toronto issue.”

“Those hundred per cent rent increases are rare or caused by something other than the market,” he said.

Lawyer Michael Thiele, whose Ottawa practice includes landlord and tenant law, welcomed the change, even if the rationale for capping annual rent increases isn’t being explained very well.

Since the mid-1970s, he said, when residential landlord and tenant law became its own specialized law in Ontario, the emphasis has been on security of tenure and stability in housing. Society, he argues, benefits when people have stable housing and can’t be forced to move whenever.

But the lack of rent control over new buildings — which allowed landlords to raise rent by any percentage that they want — was a complete disruption of that public policy.

“Tenants through no fault of their own could be economically evicted by landlords who raised the rent by any percentage they wanted,” Thiele said. “The landlords weren’t being evil — they were being capitalists and trying to make as much money as they could legally with the assets they own.”

The new rules would see all private rental units fall under annual rent increase guidelines. Those have averaged two per cent in the last 10 years and this year it is 1.5 per cent.

Thiele said he disagreed with capping annual increases at 2.5 per cent. The province’s annual rent increase guideline is based on the Ontario Consumer Price Index (CPI), which is a measure of inflation calculated monthly by Statistics Canada. Since 1991, Ontario’s rent increase guideline has exceeded 2.5 per cent 16 times.

“The annual guideline increase amount is supposed to reflect actual increases in costs — by limiting the amount to 2.5 per cent, you are making landlords less profitable,” Thiele said. “I think that is bad policy.”

Tenants may also benefit from the government’s additional move to standardize rental agreements and tighten provisions for “landlord’s own use” evictions.

Clarifying “landlord’s own use” is a good thing, Thiele said. Currently, it can be used “improperly and the penalty is inconsequential.”

Dickie said the province should leave leases alone. “I don’t think they need to be mucking around with the lease,” he said.

The freeing up of surplus provincial land and earmarking it for affordable housing follows a similar move by the federal government.

Though there isn’t a lot of provincial land in Ottawa, Watson said he’s already sent a note to several Liberal MPPs to “let them know we’d be very interested in sitting down to talk about some of the surplus lands that they have that could be used for affordable housing (because) that is one way of keeping prices down.”

The government has also introduced a five-year, $125-million program to rebate a portion of development charges on new purpose-built rental properties in areas with low vacancy rates.

Planning committee chairwoman Jan Harder says “it’s a welcome measure but will not have any significant impact here as compared to (Greater Toronto Area) where DCs are much higher.”

Harder also said added flexibility for municipalities when it comes to using property tax tools to encourage local development would have no “noticeable uptake” in Ottawa.

With files from The Canadian Press

mpearson@postmedia.com

twitter.com/mpearson78