The Unfair Impact of Above Guideline Increases (AGI’s) on Tenants in Ontario

Above Guideline Increases (AGIs) in Ontario were initially introduced as a way for landlords to recoup some costs associated with major capital expenditures, such as new elevators, boilers, and other significant building improvements. However, these increases often led to substantial financial strain on tenants, especially in light of rent freezes. While AGIs were meant to balance the interests of landlords and tenants by ensuring properties are well-maintained without compromising the landlord’s financial stability, they have frequently been misused and abused to the detriment of renters.

One major issue with AGIs is that they place an undue burden on tenants for decades. Instead of landlords absorbing even some of the costs of necessary upgrades as part of their investment in property maintenance, tenants are forced to pay all of it, for a potential decade through increased rents. This situation has become particularly problematic for low-income families, seniors on fixed incomes, and other vulnerable groups who may already be struggling to make ends meet. The higher rents resulting from AGIs are now leading to housing instability and even displacement, as tenants cannot afford the sudden increases.

Moreover, AGIs have increasingly become a norm rather than an exception. Allowing landlords to regularly apply for rent increases beyond the annual guideline. This trend has turned what was supposed to be an occasional measure into a common practice, exacerbating the affordability crisis in the rental market. Tenants find themselves in a cycle of perpetual rent hikes, with little recourse to challenge these increases effectively. The frequency and normalization of AGIs by Ontario Trbuals – Landlord and Tenant Board suggest that landlords are now able to use this tool not only to cover genuine repair costs but also to boost their profits at the expense of tenants’ financial security.

Additionally, the benefits of these capital improvements primarily accrue to the property owners. When a landlord sells a property that has been upgraded through AGIs, the new features like elevators or boilers significantly increase the property’s market value. Thus, while tenants bear the immediate financial burden of these improvements through higher rents, the landlord enjoys the long-term financial gains from a more valuable property. This dynamic highlights a fundamental unfairness in the current system, where tenants subsidize improvements that ultimately benefit landlords.

There is a growing call for reform to address these abuses. Many advocate for the abolition or significant restructuring of AGIs, suggesting that landlords should bear the full cost of property maintenance and improvements. Alternative proposals include government grants or low-interest loans for landlords to ensure necessary upgrades can be made without passing costs onto tenants. Tightening the criteria for AGIs to ensure they are only granted for essential repairs, and not for routine or cosmetic upgrades, is another potential solution.

My Plan for Reform

I am determined to push for significant changes to the current AGI system as part of my campaign. I will argue that the responsibility for property upkeep should lie solely with the property owners, not the tenants. By eliminating or significantly limiting AGIs, I aim to protect tenants from being unfairly forced to shoulder the costs of property improvements that ultimately benefit landlords for potentially a decade or more.

My wife and I have seen three separate AGIs in the past year at our buskin in the game, and I believe that landlords should bear the costs of maintaining and upgrading their properties as part of their investment. This shift would ensure that tenants are no longer burdened with unexpected rent increases that can lead to financial hardship and housing instability.

To achieve this goal, I will work tirelessly with tenant advocacy groups, policymakers, and community organizations to build a strong coalition supporting the reform. I will also push for alternative solutions, such as government grants or low-interest loans for landlords to ensure that necessary property upgrades can still be made without passing the costs onto tenants. By addressing this issue head-on, I aim to create a fairer and more sustainable rental market in Ontario where tenants are not unfairly exploited for the financial gain of property owners.