Myth and hard truth about rent control

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Will and Natalie Sauer show the rent-increase notice they received from their landlord. (JOHN WOODS / WINNIPEG FREE PRESS ) Photo Store

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The open letter was addressed To Whom it May Concern.

Meaning you, hopefully.

"We are the residents at 1325 Taylor Ave. and (we) are given to understand that our rent will soon increase to 39 per cent. You read it right... 39 per cent... in one fell swoop. The province has a rent control program that obviously is not at work. The way we see it, they are out of control."

Frankly, I get their anger.

So should you, even if you're not a renter, because chances are you know someone who is.

Someone like the Sauers.

Meet Will Sauer, 28, his wife Natalie, 26, their son, Corbin, 6, and baby Gabrielle. They live in the same 10-storey, 110-suite, apartment block at 1325 Taylor Ave. as the open-letter writer.

Will is a licensed optician and assistant manager at Pearle Vision in Polo Park. And right now she's a stay-at-home mother, having quit her previous position at the Pan Am Clinic to help look after her dying 63-year-old father.

Will and Natalie are among the more than 100 tenants who have received notice of rent increases from their landlord, Active Management.

Not for 1.5 per cent, which is this year's "guideline" increase. But that building-rattling 39 per cent, which includes the 1.5 per cent gimme.

That's what prompted not just the open letter but a petition signed by most of the stirred and shaken tenants.

There's more, though last year the rent in the same building went up by more than 13 per cent. That's a total landlord ask of more than 50 per cent over two years.

If approved in full again by the province's residential tenancies branch -- as it was last year -- the Sauer's rent on the sixth-floor, three-bedroom apartment would go right through the ceiling. From $953 a month to $1,325, parking included and also hiked.

That's a $372 increase.

How could that be when we have rent controls?

That's simple.

In many cases, rent controls are a myth. The average rental hike in Winnipeg last year was more than three per cent, according to Canada Mortgage and Housing Corp., which is more than double the "guideline."

That's because there are so many exceptions and instances where landlords can legally ignore rent controls. For example, for the last six years, new buildings have been granted a 20-year holiday from rent controls. Even old stock can take a paid vacation. If an apartment rents for $1,120 or more -- no matter the age -- rent controls are also waived. But neither of those exemptions applies in the case of 1325 Taylor.

Instead, Active Management, which, true to its name, has been very active in the last two years, has applied for the huge rent increase based on costs incurred doing upgrades to the building.

Much as it did last year.

All of which is quite permissible, as long as the upgrades and the numbers satisfy the residential tenancies branch.

What fuels Natalie Sauer's anger is all this upgrading being done in a hurry and a flurry over the last two years, when she believes it should have been carried out gradually, over the years, as a part of general maintenance. Or, as the open-letter writer vented: "Landlords are expecting tenants to cover these capital costs through this huge rent increase. And to our surprise they appear to be getting government assistance to do so."

Meanwhile, the Sauers, like so many others in the building, have some difficult decisions to make.

If the residential tenancies branch hasn't made a decision by August, when the new rent is due, the Sauers will still be responsible for paying the full $1,325.

If, later, the approved increase comes in lower, the couple will get the difference refunded. But that's when they'll have the decision to make.

Stay and struggle to pay the rent, or give two months' notice and leave.

But where would they go?

Winnipeg's vacancy rate is 0.7 per cent, three times lower than the next-lowest rate in the country.

Of course, I get the government's dilemma. Most of us do. They see rent controls as a way of protecting the vulnerable poor. At the same time, even the NDP has come to realize they have to free up the free market to do its job of refurbishing old stock and building new apartment blocks.

Which is what's finally happening in Winnipeg. But the government also needs to look at more ways to ease these kinds of huge hikes, because renters like the Sauers are at risk of becoming our working poor. As are those like the tenant who wrote the open letter To Whom it May Concern.

Which concluded definitely.

"Please understand, we are not prepared to accept this huge hike in rent. We are also not prepared to sleep in the streets."

gordon.sinclair@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 5, 2011 B1