Rent-hike guidelines meaningless, tenants say

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This article was published 31/07/2023 (794 days ago), so information in it may no longer be current.

Al Wiebe has seen every side of the struggle to afford a place to live. He made six figures in the advertising business before losing his job and living on the streets for more than two years.

He’s found some stability in a one-bedroom apartment in the downtown core, but a new hurdle has appeared: despite the province announcing July 20 that the new rent increase guideline for many Manitoba apartments would be raised from zero to three per cent in 2024, he and all other tenants in his building were hit with a 15 per cent rent increase several months ago.

“For myself, a $135 rent increase when I’m a household caregiver, given the fact that we’re paying a more-than-20 per cent increase in groceries from last year to this year, it’s a tragedy for everybody,” Wiebe said Friday.

The guideline is created annually for those renting out residential properties. It was set at zero per cent in 2022 and 2023, meant to account for the Tory government’s reduction of the education property tax paid for by homeowners. This year, the guideline is set at three per cent despite inflation being far higher, because it is limited by the Bank of Canada’s target inflation range of one to three per cent, according to an announcement from the province.

The guideline doesn’t apply to a range of unit types — including some social housing, units owned by a government body, co-ops and units that cost more than $1,615 per month — and can be circumvented through a rent increase application to the Residential Tenancies Branch that proves the landlord incurred cost increases in the year prior that are over the guideline. The new increase the landlord can impose on tenants is then decided by the RTB based on those costs.

This is where the problem lies for many tenants, who say there aren’t enough checks and balances being monitored by the RTB to prove the extent and cost of operating expenses and services provided by landlords. Even when landlords stick to the guideline, those hardest hit by the increase — amid spikes to other living costs — are people who are already struggling to pay their bills.

“Some of the things that they put on the (application) to RTB were not legitimate reasons… we have a lot of people moving out of the building (because of) the 15 per cent (increase).”– Al Wiebe

“Some of the things that they put on the (application) to RTB were not legitimate reasons… we have a lot of people moving out of the building (because of) the 15 per cent (increase),” said Wiebe, who is working with other tenants to fight the increase.

In West Broadway, another organizer knows first-hand just how unfruitful — and exhausting — the fight can be.

When tenants at 149 Langside St. were presented with a 14.3 per cent rent increase in June 2022 — the increase guideline was set at zero per cent — the community took action. Rebecca Hume was part of the group that appealed, claiming the stated repairs did not improve the quality of life for tenants and the increase was unethical.

Hume describes it as a long and painful process — the first hearing wasn’t set until December 2022, after tenants had been paying the new rent for half a year. The commissioner hearing the matter ordered a continuance to allow more time to process the file.

The next meeting was in March 2023; tenants had been paying the increased rent for nearly a year.

“Essentially, all the organizing tenants had moved out by then, anyways,” she said. “And that was a result of the increases and increased, sort of, hostilities between the landlord, which was extremely apparent in all of our proceedings at the RTB and (Residential Tenancies Commission).”

The appeal didn’t reach a final decision until a month ago, a year after the increase was put into place. The commission determined that Onyx Properties was able to justify a maximum rent increase of 11.7 per cent per month — and by that point, the landlord had already applied for another above-guideline rent increase, Hume said.

“It’s a joke. It doesn’t matter,” she said.

“It genuinely doesn’t matter what they set (the guideline) at, because landlords know how to get around it, and there’s no movement to change any of those criteria.”

Onyx Properties declined to comment.

Hume, who no longer lives at 149 Langside St., said she wishes there was an accessible way for tenants to access details on prior rent increases and appeals before they decide to move into a building.

“I think, ultimately, I’ve learned just how many people this affects, and the knock-on effects of the continued unregulated gentrification of essentially all of our working-class neighbourhoods in Winnipeg,” she said.

“Everybody knows that we have a housing crisis, but these things continue to be allowed to exist. So what is to be done?”

Landlords who apply for an above-guideline rent increase are overwhelmingly likely to get it, according to recent data in a Freedom of Information request filed by Hume. In 2020, the RTB approved 96 per cent of the 294 applications it received with an average increase of 11.7 per cent. In 2021, 80 per cent of the 312 above-guideline rent increase applications were approved at an average 9.2 per cent increase, and 92 per cent of the 383 applications in 2022 were approved, with the average increase being 9.8 per cent.

“It has a real impact on affordability and security of tenure… the argument for the ability to get an above-guideline rent increase is increased cost, and the logic is the economic rationale of cost-passed-through.”– Yutaka Dirks

Landlords can also apply for massive above-guideline increases — earlier this year, tenants at a downtown highrise were shocked to see their property manager apply for a 118 per cent increase.

Not all provinces follow the same protocol, explained Right to Housing Coalition member Yutaka Dirks.

In Ontario, the law limits above-guideline rent increases to nine per cent spread out over three years, and when a large expense is incurred by an Ontario landlord, their Landlord and Tenant Board spreads the cost of it over a decade or longer to determine the rent increase. Manitoba amortizes landlords’ capital expenses over a three- to eight-year period, meaning the same cost is factored into less time and allows for higher increases more quickly, Dirks said.

“It has a real impact on affordability and security of tenure… the argument for the ability to get an above-guideline rent increase is increased cost, and the logic is the economic rationale of cost-passed-through,” he said.

“But in this case, the tenant pays the cost, they paid it in a short period of time, and then they just keep on paying higher rents and their landlord pockets the money as profit. So it doesn’t actually accomplish that policy goal, or that rationale, and it has a real impact on the tenants forced to pay for that.”

This is a structure that can be changed, Dirks said, noting Right to Housing would be bringing it up during the upcoming provincial election.

“The law itself is written in such a way that guarantees a rent increase to a landlord,” he said.

The RTB declined a Free Press request for an interview.

malak.abas@freepress.mb.ca