End rent control: property managers

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This article was published 09/09/2009 (5920 days ago), so information in it may no longer be current.

Winnipeg property managers are again calling on the province to eradicate rent control, but none of the men in line for the premier’s job is a fan of deregulation.

Late last week, in one of his last official moves before resigning as Manitoba’s finance minister, Greg Selinger announced a one per cent rent-increase guideline for 2010, as determined by the cost of utilities, property taxes and other property-maintenance expenses.

The modest rent increase, which reflects slow-growing inflation, exempts units that rent for more than $1,105 a month, personal care homes and subsidized non-profit housing, as well as many newer buildings that have undergone provincially approved renovations.

Property owners are not surprised, given the overall state of the North American economy. But they continue to press the province to eliminate regulation they blame for creating a “housing crisis” in Winnipeg, where the residential apartment vacancy rate hovers just below one per cent, a level that makes finding housing difficult for wealthy and disadvantaged tenants alike. “You cannot only connect this to decades of rent control, you can prove it,” said Avrom Charach, a spokesman for both the Professional Property Managers Association in Manitoba and the Canadian Federation of Apartment Associations.

Charach claims rent ceilings serve as a disincentive for developers to build new apartments and is driving the rush to convert existing apartments into condos. Getting rid of rent regulation will create a few years of rising rents, followed by more units on the market and more choices for tenants, he claimed.

“I’m not going to lie: At the beginning, there will be landlords who are going to bump rents. But the new construction will follow,” he said, citing the experience of Ontario, which saw apartment-vacancy rates swing up from one per cent to 3.5 per cent five years after deregulation in 1998.

“This is a political hot potato. You have to have a little vision to get rid of it and wait five years to see the benefits,” he said, hoping the selection of a new premier could lead to that change.

But all three candidates for that job — ex-ministers Selinger, Andrew Swan and Steve Ashton — say rent regulation remains a sound piece of housing policy, even if it needs to be tweaked. The existing rent guidelines balance the need to allow property owners to recoup their renovation expenses without putting people out on the street, said Selinger on Monday, after he resigned from his post in cabinet and declared his candidacy for NDP leader.

Ashton, the former intergovernmental affairs minister, echoed Selinger’s comments but added more tax incentives are required to stimulate the creation of new apartment buildings.

Swan, the former competitiveness, training and trade minister, was the most critical of rent regulation, claiming the system is not responsive to landlords who must contend with sharp swings in utility costs. But he too supports the idea of rent regulation. Social housing advocates, however, believe rent controls must remain but don’t go far enough, as many landlords can find a way to increase rent beyond the proscribed ceilings.

The province and Ottawa must invest directly in more housing for people with low incomes, said Shauna MacKinnon, Manitoba director for the Canadian Centre for Policy Alternatives.

“There is no willingness to look at things and do what’s necessary on a really large scale,” she said, adding tax incentives alone won’t solve a nationwide housing problem.

— With files from Larry Kusch

bartley.kives@freepress.mb.ca