December 9, 2022
OHRC submission: Seeking input on rent-to-own arrangements
The OHRC welcomes the government’s effort to address the housing crisis. As the government moves to implement More Homes Built Faster, it is vital to take a human rights-based approach to housing law, policies, programs and bylaws. This includes Ontario’s obligations under the Human Rights Code (Code) and recognition of the right to housing as affirmed in the National Housing Strategy Act.
Housing and human rights:
Adequate housing is essential to one’s sense of dignity, safety, inclusion and ability to contribute to the fabric of our neighbourhoods and societies. The importance of housing to human dignity and its status as a human right has been confirmed through both international law and in the Ontario Human Rights Code. Canada has recognized that adequate housing is a fundamental human right by ratifying the International Covenant on Economic, Social and Cultural Rights (ICESR). Article 11 of the ICESR recognizes the right of everyone to adequate housing, and subsequent United Nations reports and recognitions have confirmed the importance of housing and its link to the prohibition of discrimination in all its forms.
In Ontario, the important social role of homes is recognized through the Code’s specific protections against discrimination in accommodation. Every component of the right to housing must be exercised without discrimination.
Homes are not simply an asset to be managed, but the place where individuals build their lives. Landlords and real estate developers play an important role in Ontario’s economy, but that role is subject to the restrictions of the Code, which ensure that homes are treated as more than simply a commodity.
The OHRC recognizes the changing reality of housing, but changes are still subject to the Ontario Human Rights Code (the Code), which has primacy over all other provincial legislation. In the last two decades, the nature of real estate markets has been drastically transformed as new actors, including financialized landlords, have dominated the market. These changes have disproportionately harmed vulnerable people, including groups protected by the Code.
Background on rent-to-own arrangements:
Rent-to-own arrangements generally involve a client entering into an agreement with a housing provider (e.g., homeowner/landlord, rent-to-own company, etc.) with the intention that the client will rent the home for a period of time and eventually purchase it at the end of the rental term.
Although rent-to-own arrangements can vary based on a range of factors, they typically require clients to pay a monthly rental fee, plus an additional amount to be applied towards a down payment for the property. At the end of the rental term, if the client wishes to buy the property, they can leverage the accumulated down payment to try to secure mortgage approval.
Clients and housing providers engaged in a rent-to-own arrangement generally sign two separate contracts. The first is a rental agreement that is the same as a standard lease agreement. The second is a rent-to-own agreement. This agreement allows the parties to determine the details of the purchase of the property at the end of the lease term.
The government of Ontario is exploring the role that the rent-to-own home financing model may have in supporting housing attainability in the province. The government has posed four questions for the proposal (see OHRC responses below).
In developing rent-to-own arrangement programs, it will be crucial to focus on the important social role of homes as recognized through the Code’s specific protections against discrimination in accommodation. Every effort made to create innovative pathways to homeownership must be exercised without discrimination.3
Rent-to-own arrangements present a powerful tool to address decades of discrimination in accommodation that have prevented Code-protected groups from building generational wealth.
1. Do you think that rent-to-own arrangements are a viable way to support housing attainability in Ontario?
Groups protected by the Code have lower rates of homeownership. Decades of discrimination in accommodation as it has been experienced in lending institutions, real estate companies/landlords and NIMBYism have posed barriers to building generational wealth for many people and groups protected by the Code.
Economic barriers to housing build on this history of discrimination to disproportionately affect members of Code-protected groups. The government’s recent Report of the Ontario Housing Affordability Task Force shows that the escalation of housing prices over the last decade has put the dream of homeownership out of reach for many Ontarians. While 73% of Canadians are homeowners, that drops to 48% for Black people, 47% for LGBTQ people (StatsCan is studying rates for other populations, including Indigenous people who are severely underhoused). For younger adults, a 2021 study showed only 24% of Torontonians aged 30 to 39 are homeowners.
The OHRC is supportive of Ontario’s efforts to support tenants’ ability to build generational wealth by implementing rent-to-own arrangements. Building wealth through property ownership can help to break the cycle of poverty and also supports dignity and wellbeing. The OHRC notes that recommendation #41 from the Report of the Ontario Housing Affordability Task Force encourages “funding for pilot projects that create innovative pathways to homeownership, for Black, Indigenous, and marginalized people and first-generation homeowners.” Similarly, recommendation #42 calls for providing “provincial and federal loan guarantees for purpose-built rental, affordable rental and affordable ownership projects.”
2. Are there any barriers with rent-to-own arrangements that you think may be discouraging providers from offering this type of housing?
The OHRC encourages MMAH to incentivize rent-to-own arrangements targeted to Code-protected groups for housing providers. Due to discrimination in accommodation, including its effect on the ability of Code-protected groups to purchase homes, governments, service providers and housing providers have an obligation under the Code to take positive action towards substantive equality. This means that organizations must work to proactively identify and remedy the disproportionate impact that laws, policies or systems have on vulnerable groups.
Therefore, to address decades of discrimination in accommodation, the OHRC strongly recommends that MMAH incentivize and support housing providers to provide rent-to-own arrangements to address gaps in homeownership specifically experienced by groups protect by the Code. Efforts such as these go further than just providing access to housing. Homeownership can have a positive impact on mental health and provide a sense of security and dignity. Rent-to-own policies and programs should have clearly stated intentions and be unequivocal in their aim to support groups protected by the Code.
3. Are there any issues with existing rent-to-own arrangements that make it difficult or unfavourable for clients, such as renters, to engage in them?
The lack of affordable, accessible and suitable housing is a systemic social barrier across Ontario. For instance, many people with disabilities and families supporting children with disabilities struggle to find, and keep, accessible and affordable housing.
Because every person has the right to be treated equally in housing without discrimination, it is vitally important to clearly and consistently make the connection between human rights and bylaws, policies and procedures that govern housing, including rent-to-own arrangements. Service managers and housing providers have obligations under the Code to provide housing that is free from discrimination.
The OHRC recommends that MMAH support and provide incentives for service managers to work with affected communities to provide rent-to-own arrangements tailored and targeted for Code-protected groups, such as people living with disabilities. The arrangements must therefore support housing providers with accommodation and adaptation support to make sure the housing meets the distinct needs of the targeted group. This could mean ensuring that a unit is fully accessible and will meet the needs of a family as they age.
4. Are there measures the government could consider to facilitate these agreements, such as making them more viable for housing providers, increasing client protections, raising awareness and public education on this alternate form of homeownership, etc.?
Rent-to-own arrangements present a powerful tool to support vulnerable and Code-protected groups to build generational wealth and break the cycle of poverty. The OHRC recommends the government specifically design these arrangements to target Code-protected groups.
Rent-to-own arrangements that are designed with the unique needs of Code-protected groups in mind could include specific arrangements for lone-parent families, women, Indigenous people and newcomers, among others. The OHRC recommends working with Code-protected groups and their organizations to design specific rent-to-own arrangement programs. Leveraging community partners in this way will help to promote these programs as well.
 OHRC, Right at Home: Report on the consultation on human rights and rental housing in Ontario (2008) at 6. The Quebec Court of Appeal has said that housing, even more than employment, is a basic need of every individual in our society. See Desroches v Quebec (Comm des droits de la personne) (1997), 30 CHRR D/345 (Que CA).
 Commission des droits de la personne et des droits de la jeunesse (Pheneus et une autre) c Fornella, 2018 QCTDP 3.
 Manuel Aalbers, The Financialization of Housing: A Political Economy Approach (New York: Routledge, 2016); Elvin Wyly et al, “American Home: Predatory Mortgage Capital and Neighbourhood Spaces of Race and Class Exploitation in the United States” (2006) 88B:1 Georgrafiska Annal 105; Elvin Wyly et al, “Cartographies of Race and Class: Mapping the Class-Monopoly Rents of American Subprime Mortgage Capital” (2009) 33:2 Int J Urban Reg 332; Elvin Wyly et al, “Gender, Age, and Race in Subprime America” (2011) 21:4 Housing Policy Debate 529; Loretta Lees & Elvin Wyly, Gentrification (New York: Routledge, 2008); Raquel Rolnik, “Late Neoliberalism: The Financialization of Homeownership and Housing Rights” (2013) 37:3 Int J Urban Affairs 1058.
 Association of Ontario Midwives v Ontario, 2018 HRTO 1335 at para 309, aff’d 2020 ONSC 2839, appeal to Ontario Court of Appeal.
 Association of Ontario Midwives, supra at para 309, Fraser v Canada, 2020 SCC 28, (63)