MOST Manitoban renters are looking at a rent increase of at least two per cent next year after the provincial government opted to raise its rent-control guideline.
The guideline had been set at one per cent for each of the past two years. But the province announced Friday the 2014 guideline will be two per cent, which is the highest it's been since 2009, when it was 2.5 per cent.
The new guideline takes effect Jan. 1, and a government news release did not say why it was raised. However, it said the guideline is determined annually and "takes into account cost increases for utilities, property taxes and other expenses incurred in the operation of a residential complex."
It said legislation has been proposed that would make future calculations as transparent as possible, and that "it is anticipated a prescribed formula or the consumer price index for Manitoba would be used to help determine the guideline rate."
Student-union officials and spokespeople for local consumer and seniors' groups could not be reached for comment Friday.
A spokesman for the Professional Property Managers Association Inc. said the increase is a step in the right direction, but isn't enough to offset all of the cost increases landlords are facing.
Avrom Charach said the cost of things such as building materials, labour, utilities, and property taxes are all going up by more than two per cent.
"The reality is that in order to keep pace with their cost increases, landlords would have to increase their rents by three to five per cent," Charach said.
"Not two per cent, and certainly not by the one per cent we've been getting the past couple of years."
He said the new guideline won't even cover the annual rate of inflation, which was three per cent last month in Manitoba. And on July 1, the province raised its sales tax by one percentage point.
"Every plumber's bill is now one per cent higher, every electrician's bill is one per cent higher, every appliance bill is one per cent higher... There is just so much in our basket of goods that has the PST applied to it."
Local landlords can apply for an increase of more than two per cent if they can show the guideline doesn't cover their increased operating costs. But Charach said it's a complicated and time-consuming process, and not all landlords understand how it's done or have the time to do it.
He said the fact roughly one third of all rental properties usually end up getting increases above the guideline each year shows the government routinely sets the guideline too low.
The rent control guideline applies to most residential rental properties, including apartments, single rooms, houses and duplexes. Excluded are units renting for $1,395 or more per month as of Dec. 31, 2013, personal care homes, non-profit housing with subsidized rent, and approved rehabilitated units.
Units in buildings that are less than 15 years old and were first occupied after April 9, 2001 are also exempt from the guideline, as are units in buildings that are less than 20 years old and were first occupied after March 7, 2005.
The government said landlords must give tenants at least three months written notice of a pending rent increase. Tenants also can object to a rent increase, but their objection must be filed with the Residential Tenancies Branch (204-945-2476) at least 60 days before the increase is to take effect.