NDP passes condo buck to councils

Hey there, time traveller!
This article was published 21/05/2011 (5279 days ago), so information in it may no longer be current.

The provincial government’s manipulation of its rent-control policy is a masterful play of illusions. Political expediency has made removal of rent caps, introduced as a temporary check to inflation in 1976, next to impossible. Instead, the NDP administration has watered down the policy by exemptions.

Landlords who renovate or upgrade their buildings get exemptions — which is why many renters wonder why their “protected” rents rise dramatically — and controls don’t kick in for new buildings now for 20 years. Owners are improving their blocks and developers are building new units.

A study commissioned by the Selinger government earlier this year found that rent control, for these reasons, has not stymied construction but it has also not held rent levels at annual caps. This reflects the fact that, across Canada, rents and new apartment construction in controlled and uncontrolled environments respond to a host of factors, particularly the local economy.

But a shifting market has shown landlords there’s money in converting apartments to condominiums. Tenants, evicted for renovations, lose their apartment when it’s turned into a condo. The Selinger government has lent a sympathetic ear to the clamour for protection.

But having seen the cost of strict controls and having pocked its policy with exemptions, even this government could not face the blowback of an outright ban on conversions. Rather, it will leave that decision to municipal governments, which have no control over rents. City councillors will have to weather the complaints of renters and pay the political cost of conversions. What council could turn down the tax revenues that flow from new development?

The Selinger government has found a way to rebuff renters and deflect the heat.

Instead, it will restrict owners from turning a block into a condominium for a year following renovations. That may see a building left empty for a period. It may slow down conversions but not halt them in a hot market. And rents will rise apace. The NDP has merely continued the mockery of the “control” of rent control, underscored by the fact it is giving significant hikes to allowances for welfare recipients and low-income families.