Winnipeg Free Press
September 3, 2003
By Mia Rabson
THE provincial government is looking at ways to improve the current rent control system but has no plans to get rid of rent control completely, Finance Minister Greg Selinger said yesterday.
The province announced the maximum rent increase for 2004 yesterday, which will allow most rental property owners to add 1.5 per cent to the monthly rent of their tenants. It amounts to about a $10-a-month increase on the average rent in Winnipeg.
But with the vacancy rate hovering around one per cent and not a lot of new rental construction, the province is meeting with various stakeholders to study the issue.
"Rent control is here to stay," Selinger said. "But if there is a way to improve it to encourage refurbishment and new housing stock, we will look at it."
He said legislation making changes could appear as early as the spring but wouldn't speculate what that might look like.
The average rent for a two-bedroom apartment in Winnipeg is around $630. The rent increase for 2004 is set by cabinet based on inflation and the reported costs from the industry.
There are about 53,374 private rental units in Winnipeg and the rent increase applies to all rental units except those over $985 a month, personal-care homes and subsidized public housing.
As well, buildings which began renting after April 9, 2001, are exempt from the maximum increase for 15 years.
Landlords who have proof they spent more money refurbishing units than the rent increase will return to them can also apply to increase the rent by more than 1.5 per cent. Since 1999, 61 per cent of all rental units were granted at least one rent increase higher than the maximum.
Once a year
In all cases, rents can only be raised once a year and tenants must be given three months' notice. Tenants can file an objection for any increase to the Rental Tenancies Branch.
Bob Shaer, president of the Professional Property Managers Association in Manitoba, said the 1.5 per cent increase is acceptable because it coincides with the Consumer Price Index.
But Shaer has been spearheading a push to have Manitoba follow Ontario's footsteps and introduce what is known as a voluntarily vacated policy, which means rental units are ruled by rent controls as long as they are rented by the same tenant. Once they have been vacated, the landlord can freely raise the rent.
When Toronto went that route in 1997, it appeared to spur on new rental construction. According to the CMHC, the new rental units built in that province went from 144 and 250 per year in 1996 and 1997, to 956, and 1,511 a year in 2001 and 2002.
And Shaer said over $80 million was invested to refurbish existing Toronto apartments in the first four years of the new rules.
But Selinger argues deregulating rents doesn't spur new growth, quoting the same CMHC statistics showing there were 1,423 new rental units built in Winnipeg between 1992 and 2002, a growth of 8.74 per cent. In Regina and Saskatoon, where the provincial government canned rent regulations in 1992, rental growth was 2.23 per cent and 3.91 per cent in the same 10-year period.
However, vacancy rates in Saskatchewan are higher than here, sitting at 1.9 per cent in Regina and 3.7 per cent in Saskatoon, compared with 1.2 per cent in Winnipeg, all in 2002.
Shaer credits this government with structuring rate increases to inflation and expanding the exemption for new buildings to 15 years from five years.
Shaer estimates about 300 new units have to be added in Winnipeg every year for the next five to 10 years to keep up with the demand.