Subject: Rent Inflation Factor to be used in the calculation of Minimum Market Rent in 2004 fiscal year
 Legislation/Regulation Release 03-15
 Operational
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Starting with the 1997 fiscal year, the ministry developed an annual Rent Inflation Factor, which is to be used in the calculation of subsidy for projects subsidized under the Municipal Non-Profit Program (1978-1985).
The Rent Inflation Factor is used to determine the Minimum Market Rent that is expected to be charged. If a non-profit housing provider does not increase market rents by this rent inflation factor, it will be subject to a reduction in subsidy.
PROCEDURE
The applicable Rent Inflation Factor, from the attached 2004 list, is inserted on Line 441, page 3A, of the Municipal NP Operating Budget Form 819(01/95). When used in the budget, the factor is expressed as 1 plus a decimal number (e.g. 2.9% would be expressed as 1.029). The Rent Inflation Factor is then multiplied by the actual market rents charged in 2003 to determine the Minimum Market Rent for 2004.
If a provider feels that it cannot charge market rents at this Minimum Market Rent level, an application may be made to the Service Manager for an exemption when the 2004 budget is submitted. The application must include supporting evidence to clearly demonstrate the inability to charge the Minimum Market Rent.
In the event a project has not yet been transferred, such an application for exemption, including supporting materials, would be made to the Ministry of Municipal Affairs and Housing, Social Housing Branch.
ACTION REQUIRED
- Municipal Non-Profit Housing Providers (1978 - 1985) are to use the attached 2004 Rent Inflation Factors to determine the Minimum Market Rent level for the 2004 market rents.
- If an exemption from the Minimum Market Rent level is required, an application must be submitted along with the 2004 budget. The application must include evidence to clearly support the inability to charge the Minimum Market Rent.
PLEASE NOTE:
This notification applies to Municipal Non-Profit excluded projects currently under administration by the Social Housing Branch and also will be used to create minimum market rent level for Municipal Non Profit housing providers whose project are now under administration by local Service Managers.
If you have any questions, please contact your Service Manager or for excluded providers, please contact your Senior Risk Advisor in the Social Housing Branch.
For additional information, please contact Terry Pearce at 416-585-7349.
Toni Farley
Director
Social Housing Branch
Attachment: 2004 Rent Inflation Factors
November 21, 2003