Front Burner - Why some tenants are going on ‘rent strikes’

Episode Date: June 7, 2023

There are two rent strikes underway in Toronto, where some tenants have organized and are withholding rent to protest against above-guideline rent increases. But the strategy carries serious risks �� including potential eviction. Today, we hear from one tenant in Thorncliffe Park on why he’s taking part in the strike, and Ricardo Tranjan of the Canadian Centre for Policy Alternatives talks more about the radical tactic, and tenant organizing in Canada. For transcripts of this series, please visit: https://www.cbc.ca/radio/frontburner/transcripts

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Soroja Kweilo. That is true, yeah. Basically, I'm not paying any rent at the moment. This is Samir Bayan, a tenant in a Toronto apartment complex. We are not saying that we do not want to pay the rent.

We will pay the rent, but we're holding it at the moment. But basically that means that the response for us is that we do not want these above-guideline increases. Samir, along with more than 100 of his neighbors across three apartment buildings, is taking part in what's called a rent strike. They are withholding their rent in protest against their landlord's efforts to raise rents by nearly 10% in just two years. Samir lives with his aging parents. They've been in their two-bedroom apartment in the Thorncliffe Park neighborhood of Toronto for around eight years. All the three buildings are mostly tenants who are Canadians, new migrants, mostly like hardworking, middle class people, family oriented. It's like community based.

We've been here for long years and a lot of people, in my case also, who have been here for longer periods, they say that they feel this is their land, this is their homes. And they feel that they're being priced out from this community. This proposed rent increase that Samir is facing, it adds about $125 more onto his rent. He works full-time as an administrative assistant, but it's still an amount that makes an impact, especially with the pinch of inflation.

Yeah, so $125, that means, you know, taking a lot of money from elsewhere, you know, that I need to allocate for something else. With everything going more, inflation, with grocery increasing, that means that I cannot really put more food on my table. That means

you're making my life more difficult for me to get a affordable kind of lifestyle. So for me, 125 means a lot. That means quite that I need to... The three buildings taking part in the strike

are owned by a real estate giant called Starlight Investments and the Public Sector Pension Investment Board, also known as PSP Investments. PSP is a crown corporation, one of Canada's largest pension managers. PSP Investments directed the CDC to Starlight for comment. Starlight tells the CDC that it's committed to ensuring its communities are well-maintained, structurally sound, safe and secure, and that these proposed increases come

after doing work to improve the building's structure and safety. But for Samir, he's worried that if these rent increases go through, he and his parents are going to have to leave the community that they love. Well, for me, if these have been approved, that means that I'm going to have to start looking for a new place that is affordable for me and for my parents. And to feel that way is really frustrating for me. I do not want to leave at all.

I do not want to, you know, be somewhere really far. Because right now, I know that rents are going all over the place. It's really crazy. And the only way to find an affordable rent right now, that means that I have to move really farther away. It's such a good neighborhood for me and my parents. Even bringing to them the idea that they need to move away, it's going to be crazy for them. They're going to feel frustrated.

Rents are skyrocketing right now. Samir sees it in his very own building. When tenants leave their units, the space is renovated and then put back on the market for a whole lot more money. And we want to live in a place where there's anxiety-free housing. I'll give you one more example. In this building right now, if I move out and come back to it next time, that means the $1,300 apartment that I'm paying right now, I'm not going to pay the same. Right now, two-bedroom apartments are going for $2,900, which is crazy. That means they're not being affordable.

They're not being for family oriented anymore. And that's, you know, what we are feeling right now. We're feeling threatened, basically. This is what makes us, you know, fight. You know, this is what makes us do this rent strike right now. We talk a lot about the affordable housing crisis on this show, and you've likely heard a lot of experts talk about longer-term solutions and more market-oriented strategies. But today, we're going to talk about how some tenants, like Samir and his neighbors, are taking matters into their own hands and using more radical tactics to push back against rising housing costs. I've got Ricardo Tranjan with me to talk more

about rent strikes. He's a political economist with the Canadian Centre for Policy Alternatives, and he's the author of a new book called The Tenant Class. Ricardo, hello. Hello. We've just heard from a tenant taking part in a rent strike in Thorncliffe Park. And that's not the only rent strike underway in Toronto right now. There's another one happening in the city.

And both of these strikes are in protest of landlord applications called an AGI, or an above guideline increase. For those who aren't really familiar with what that is, what is an above guideline increase? Yes, Ontario has rent controls on occupied units that came into the market before 2018. And for those occupied units, every year there's a rent guideline increase, which the government publicizes and says you can increase rents by, say, 2%. That is usually attached to the rate of inflation. But landlords can sometimes apply for an above guideline rent increase by which they say we need to increase by more than whatever the guideline is this year. by which they say we need to increase by more than whatever the guideline is this year, because usually the most common reason is some renovation has been done in the building. And so those above guideline rent increases are putting a lot of pressure on rent increases overall.

So basically, this is a way for Ontario landlords to increase rent above what's permitted under Ontario's rent control laws. It is correct. Above guideline rent increases, in practice, they have been serving as a loophole to rent controls. The other thing that is important to understand about AGI is that they put such pressure on tenants that sometimes we call them eviction by a thousand cuts because if prices keep going up by so much year over year at some point those units just become unaffordable to the tenants because the wages their their income are not keeping up with it In Samir's case, who we just heard from in Thorncliffe Park, the landlord is a large investment entity called Starlight. Starlight tells the CBC that they applied for the increase after doing work to improve the building's structure and its safety.

So if they're putting that kind of money into improving the building, why shouldn't tenants pay more in rent? So there's two ways, there's two types of arguments against AGIs. One of them, and it's the one that we usually hear in the landlord and tenant board, they're procedure arguments, right? So the pair of legals and lawyers that are working with the tenants, they will go through all the rules of AGI's and they're going to see, well, were those renovations actually completed or were they completed on time? Do those renovations qualify as an AGI? And so we have a sort of like procedural conversation and procedural arguments and becomes very kind of legalistic. And then there's another broader argument, which is, I think, the ones that tenant unions in both

places where rent strikes are happening right now are making, which is more a fundamental argument that says, why are they pushing these rent increases on tenants? Why is it on tenants to pay for these renovations if a large share of the income revenue eats away the profit? In one of the places where the tenants are striking, they found information online that shows that about 50% of all rent revenue is net profit.

So the argument is, why are you not paying for it? Why don't you pay for yourself? Why don't you take it away from your profit margin and pay for the renovations? Because after all, you own the asset and it's in your interest to preserve the quality and even improve the asset. So those are the two kinds of arguments. You can get in a very procedural thing.

Was this renovation done or not done? Is that the right renovation? But then there is the bigger question of why do they have to push those renovation costs on tenants? Shouldn't it be them to take that and to absorb that cost? Something that Samir told us is that he and his neighbors didn't really want some of the renovations that were done. So the first thing we were done were the balconies, and then there were the other exterior renovations. And basically these renovations, the way we felt it, they never brought any kind of improvement for us as being tenants in these buildings. And that some of the work was disruptive.

Is that something that you've heard from other tenants dealing with these rent increases elsewhere? Yes, I hear that all the time. Above guideline rent increases, they come as a sort of a sucker punch in the sense that tenants do not choose when the renovation should take place. They don't choose what renovation should be prioritized. Should it be the washrooms inside the units that need a job? Or is it the entrance hall that needs a job? They also don't choose how much is going to be spent.

They are simply asked to foot the bill afterwards, whether or not they plan for it, whether or not they agree with renovation. So if I were to put this in homeowner language, imagine if the city decides to simply come and redo your driveway without consulting you and then tells you that by the end of the year, you have to pay $3,000 back to the city. How would break loose, right? Like homeowners is like, no, we have a say. We participate in this process. And it's a little bit how it feels on the tenant side. You have no say, but you have to foot the bill.

As these rent strikes are unfolding, Starlight also says that this above-guideline increase in Thorncliffe Park hasn't been approved yet, and that this is something that will happen at the landlord and tenant board. So Starlight is calling the rent strike both poorly timed and misguided. I'm wondering what you make of that response. Let's think about for a second of how negotiations happened in labor processes. Would we ever expect labor, organized workers, to sign a collective agreement and then after that it's signed, then voice their demands? So I think what we have to remember here is that tenants do not have the rights or the mechanisms to collectively negotiate with landlords. Landlords unilaterally make decisions about repairs, renovations, rent levels,

then they notify tenants of their decisions. That's how the process unfolds. And once it gets to the landlord and tenant board, tenants can try to reverse the decision that has already been made. But by then, they're playing catch up. The deck is already stashed against them. I'm going to go. through angel investment and industry connections. That's not a typo. 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couples. So there are two pretty big rent strikes that we know of in Toronto right now. Is this uniquely a Toronto phenomenon or are you seeing this kind of rent strike elsewhere in Canada? It is not unique. We have seen tenant organizing in Canada literally since before Confederation. It has happened for a good 150 years. It has happened across provinces and in the various large and small cities across the country.

Not now! Not later! You won't be victory! How successful is this strike? So far, it's been very successful. The tenants are behind it. We have almost 50% of the tenants who withheld their rent. That's 150 people. For about four months, I put up with this. I was thinking of moving out, and I thought, well, why shouldn't I get what I'm paying for? I thought I'd just go around and check with a few tenants to see what their reaction was.

And the reaction was almost 100% for a rent strike. In an organized Canada, it's a little bit cyclical. We see over the past 150 years or so that sometimes it picks up momentum, and sometimes it recedes a little bit. And so we have those ebbs and flows of more activism and less activism. Right now, I absolutely think the tenant movement, it's gained strength. And I would say there is three key reasons. One of them is that governments haven't invested in non-market housing for a very long time. So non-market housing is the ultimate solution for low-income families.

And so when you don't invest in it for 30 years, it starts catching up with you and you have that share of the population really in a really tough situation with no option, nowhere to go. The second reason I would say is that governments in recent years have been weakening rent controls. So then when they weaken rent controls, what they're doing in practice is that they're enabling predatory landlord practices, And that is putting another pressure and pushing tenants against the wall. And then the third reason, I think it's more internal. It has to do with the movement itself

and the fact that there is good organizing on the ground happening and people are learning lessons and sharing experiences. And whenever we have one successful action that inspires other groups to organize, to learn from that group and then a network starts forming and it starts getting both stronger and more effective. playing the two rent strikes that we are seeing now in Toronto and probably more similar actions that we will be seeing over the next couple months or years. It strikes me that this comes with some very serious risks.

It's a radical tactic. If you don't pay your rent, doesn't your landlord have pretty clear grounds to evict you? They do. They do. And so it is absolutely a bold movement on the part of the tenants to go on a rent strike. on the part of the tenants to go on a rent strike. I think it is one of the few responses available to them because they don't have mechanisms or institutions where they can collectively bargain before they get to that point.

And I also think that, as we mentioned before, EGIs are sort of eviction by a thousand cuts. If rents keep going up and going up and going up, eventually they lose their homes too because they just become unable to pay rent. So at some point in their part, there's also a calculation of saying, yes, I don't want to absolutely do not want to withhold rent and risk receiving an eviction notice. But at the same time, I cannot keep up with this, and I will eventually lose this unit as well.

So they have to make that very difficult decision. But I would also argue there is also a risk on the landlord side. Starlight is the asset manager for PSP, a pension fund ultimately owned by the government of Canada. In 2019, the same government of Canada approved the National Strategy Housing Act, which is, and I quote, focused on improving housing outcomes for persons in greatest need. The National Housing Strategy represents a once-in-a-generation, $40 billion vision of how we can protect the affordability of the current affordable housing stock in Canada,

build four times as many units as the past decade, repair three times as many units as the past decade, and reduce chronic homelessness by 50%. So this is a very perverse incoherence. The government of Canada is the indirect landlord pushing a 10% rent increase on long-income families that are insecurely housed. And so this strikes ends in one of two ways. The landlord withdraws the AGI application or the landlord proceeds to evict tenants. So the PSP, the federal public servants whose pension PSP manage, and ultimately the government

of Canada, have to ask themselves if they're willing to evict low-income tenant families who stood up against a 10% rent increase. After three years of pandemic, after a year where food prices increased by more than 10%, these tenant families are saying, this is too much, we can't afford. Are they going to end up on the streets because of that? And I would like to see who in Ottawa is ready to make that call because ultimately they will have to live with the consequences of evicting low-income tenant families as well. So I think the risk is on both sides. I'll just add that with regards to that Thorncliffe case, the Public Sector Pension Investment Board, PSP Investments, directed CBC

Toronto to Starlight for comment. They said that Starlight handles the day-to-day operations. So Starlight told CBC that, quote, those urging this course of action as a form of protest put the security of a residence tenancy at risk, unquote, and that they will continue to offer rent release to individual tenants struggling to pay, but that participating in the strike will be, quote, seen as a potential breach of our rental agreement. Samir himself has actually received a notice. He read part of it to our producer.

Basically, it says, pay up or... I can apply to the board to have you evicted if you do not pay this amount by 24 of May 2023. This is called the termination date or move out. You can be evicted. He says at first there was a lot of confusion and anxiety over these notices amongst the neighbors, but that they are only the first step in a longer eviction process. And so Samir is holding out. You know, it's a bad kind of like PR marketing for Starlight. You know, they do not definitely be, you know, known for evicting families and how working people from their neighborhoods, especially with Thorncliffe Park. So for us, you know, we're going to continue with fighting,

you know, we're going to continue with, you know, putting more struggles for Starlight to, you know, budge and continue with fighting. We're going to continue with putting more struggles for Starlight to budge and continue with this. With these kinds of risks in mind, though, in your view, how effective are rent strikes as a tactic? I think they are effective. And because they have shown in the past a number of times, tenants manage to balance the power of the negotiations a little bit. And they manage to bring the landlord to the table and they will often achieve the outcomes that they desired dropping an igi preventing an eviction getting some repairs done they are effective in changing the conversation a little bit and showing the power dynamics that a lot of the the policy debates that focus on

technical solutions kind of like hide it a little bit. And also they're effective in just strengthening the movement. I have to admit that I'm a bit of a nerd for social history. My previous academic work focused a lot on the history of social movements as well. And it's always really hard to draw sort of the empirical links between these and that action, right? Because they seem all sort of very local and very random almost. But then, you know, it's just in hindsight that some academics and historians and political scientists can come and make sense of that. So that said, we've seen it that whenever the tenant movement gains momentum and all these small and local actions pop up, it leads to changes in legislation.

It leads to changes in the regulation of rent market. regulation of rent market. In one example, in British Columbia in the 1960s and the early 1970s, there was a lot of activism and it started locally and they eventually built city level organizations and sometimes they connected also with provincial level organizations. And we see that at the end of that process, there was also legislation that passed that were the first protections that tenants acquired vis-a-vis landlords and vis-a-vis rent increases and protections that is still in place today. is in Toronto. And now we're talking more about the 1990s, where once again, there was a lot of activism that started very local in individual buildings, fighting repairs that weren't done, buildings that weren't properly completed.

And then, you know, start getting more and more momentum and these groups start to come in together and starting to have a broader political agenda and then you can link that activism to to rent controls that were passed later in the decade so it leads to outcomes that are positive from from the tenant's perspective it's just really hard sometimes to to from from kind of being critical and research perspective, to connect the dots too clearly. But that's always the case with this kind of research.

Ricardo, I really thank you for your time today. Thank you for having me. This has been fun. That's all for today. I'm Saroja Coelho. Thanks so much for listening to FrontBurner. For more CBC Podcasts, go to cbc.ca slash podcasts.