Application of Minimum and Maximum Geared-to-Income Rent (H-24-02)

Date: July 1, 2024

• 1 (a) – Local Housing Corporation
• 2 (a) and 2 (b) – Rent Supplement Programs
• 6 (a) – Non-Profit Program
• 6 (b) – Non-Profit Co-Op Program

Directives archived and replaced with this directive

Directive H-23-04: Application of Minimum and Maximum Geared-to-Income Rent

Background

The Housing Services Act, 2011 (HSA) sets out the minimum unit rent that Rent-Geared-to-Income (RGI) will be charged to households as prescribed in Ontario Regulation 316/19, section 2 (2-8).

The minimum rent is indexed each year according to the Ontario residential increase guideline each July. For households that were paying less than the new minimum rent of $129 set out on July 1, 2020, a “transitional minimum rent” will be calculated annually until it is equivalent to or greater than the indexed amount.

Purpose

The purpose of this Directive is to communicate the indexed and transitional minimum rents for the period July 1, 2024 to June 30, 2025, and how to determine which minimum rent should be used to calculate RGI payments for a household.

Action to be taken to take effect July 1, 2024

Minimum geared-to-income rent payable

1. After calculating the RGI payment for the household, compare it to the minimum/maximum unit rent to ensure it is not below the minimum rent or above the maximum rent.
2. The “indexed minimum rent” for the period of July 1, 2024 to June 30, 2025 is $139.
   • “Indexed minimum rent” is calculated as follows: the provincial residential rent increase guideline for 2024 is 2.5% which is converted to a decimal by dividing the percentage increase by 100, and then adding 1 (2.5% as a decimal plus 1 = 1.025). The minimum rent as of June 30, 2023 is then multiplied by 1.025 as follows: $136 x 1.025 = $139.4, which is rounded to the nearest dollar = $139.
3. The “transitional minimum rent” for the period of July 1, 2024 to June 30, 2025 is $125.
   • “Transitional minimum rent” is calculated by adding $8 to the transitional minimum rent amount as of June 30, 2024 of $117. Transitional minimum rent from July 1, 2024 to June 30, 2025 is calculated as $8 + $117 = $125.
   • The “transitional minimum rent” is increased by $8 on July 1st of each year until it is the equivalent to the indexed rent amount.
   • If the RGI payment is higher than the transitional amount, but lower than the indexed minimum rent, the actual RGI payment will be charged. Rent will continue to be compared to the transitional amount until the household’s RGI calculation is equal to or greater than the indexed minimum rent.
   • The “transitional minimum rent” is no longer used for an RGI household if the RGI payment for the household is calculated at more than the “indexed minimum rent”. For example, if a household’s RGI payment is calculated at above $139 for the period of July 1, 2024 to June 30, 2025, future RGI payments will always follow the “indexed minimum rent”, even if the RGI payment later decreases.
4. Determine which minimum rent applies to the household:
   1. Use the “indexed minimum rent” for all new tenants and current tenants whose RGI payment was equal to or higher than $129 on July 1, 2020.
   2. Use the “transitional minimum rent” calculation if all the following criteria are met:
      1. The household was receiving RGI assistance on July 1, 2020;
      2. Immediately prior to July 1, 2020, the household’s geared-to-income rent payable was less than $129; and
      3. The household’s geared-to-income rent from July 1, 2024-June 30, 2025 is less than the “indexed minimum rent” of $139.
   3. Despite the criteria listed in a) or b), use the applicable Ontario Works or Ontario Disability rent scale to determine minimum rents for single benefit unit households (one-person households) whose income does not exceed the monthly non-benefit income limit.
      • Minimum rent for an ODSP benefit unit of one is $109
      • Minimum rent for an OW benefit unit of one is $85
5. Minimum rent charges apply to the household, not to individual family members.
6. Increases in minimum rents occur effective July 1st of each year but are not automatically applied at that time. Tenants at minimum rent will have their RGI adjusted to the new minimum rent amount at the first RGI review conducted on or after July 1st – which is normally the next annual review.
7. Utility allowances and charges cannot raise the RGI payment above the maximum rent or lower it below the minimum rent.
8. Any additional charges (e.g., parking or air conditioning) are added to the indexed or transitional minimum rent.

Maximum geared-to-income rent payable

Maximum rent is the monthly rent that would be payable by a household if the unit were occupied by a household not eligible for rent-geared-to-income that is not receiving RGI assistance (referred to as “Market” rent).

Reference

• Housing Services Act, 2011, section 50 – Amount of geared-to-income rent
• O. Reg. 316/19, section 2 – Geared-to-income rent payable

Ruth Noordegraaf
Director, Housing & Social Services Department

The following have received a copy of this Directive:

• Jennifer Campbell, Commissioner, Community Services
• Alan MacLeod, Senior Legal Counsel and Deputy City Solicitor, Legal Services 
• Amy Gibson, Manager, Housing & Homelessness, Housing & Social Service Dept.
• Mitchell Grange, Policy Manager, Housing & Social Services Dept.
• Housing Programs Administrators, Housing & Social Services Dept.
• Jannette Amini, Manager of Legislative Services / Clerk, County of Frontenac

If you have any questions, please contact a Housing Programs Administrator, Housing and Social Services Department.