Winnipeg Free Press
December 4th, 2003
By David Kuxhaus
APARTMENT dwellers in Winnipeg are being hit with some of the highest average rent increases in the country even though Manitoba is the only province with rent controls.
About one in four Manitoba renters had to pay more than the cap of one per cent set for 2003 by the Doer government.
It's a reflection of higher operating costs for building owners -- mostly related to natural gas spikes that are still working their way through the market -- and capital improvements to a rental stock that is starting to show its age.
The provincial cap is set by the provincial government and is based on inflation and the reported costs from the industry.
Landlords who have proof that they spent money refurbishing units or that their operating costs have risen can apply for more than the stipulated amount.
Rents at Chateau 100, a downtown highrise on Donald Street, went up about 20 per cent this year.
Shaun Parsons, the building manager, said the landlord undertook a complete restoration of the suites and commissaries. "Basically, (the building) needed a facelift," said Parsons.
The hike put the rent for a one-bedroom up to about $750 a month and a two-bedroom to approximately $850.
Parsons said the new rates are on par with those charged at other high-end blocks in the area such as Fort Garry Place.
While some tenants may not have been happy with the hike, he pointed out that all of the building's 1,400 units are rented. That, however, may also be a product of Winnipeg's vacancy rate of 1.3 per cent, one of the lowest in the country.
According to Canada Mortgage and Housing Corp.'s rental market survey released earlier this week, average rents in Winnipeg increased 3.7 per cent for both one- and two-bedroom suites over a 12-month period beginning in October 2002. The average rent for a one-bedroom suite was up 1.7 per cent in Saskatoon and 2.3 per cent in Edmonton.
At the higher end were Montreal and Halifax, where rates for one-bedroom apartments were up by more than four per cent.
Bob Shaer, president of the Professional Property Managers Association, whose members manage about 70 per cent of the rental properties in Winnipeg, said the increase isn't that large.
The average rent for a one-bedroom unit in Winnipeg went from $490 per month to $508, while the average rent for a two-bedroom apartment rose from $622 to $645, according to the CMHC survey.
"It's not a significant increase when you look at dollars and cents versus percentages," said Shaer.
The provincial residential tenancies branch received 273 applications for increases above the maximum for the 2003 rental year.
Gloria Desorcy, spokeswoman for the Manitoba branch of the Consumers Association of Canada, said she was startled by the size of the increase in rental rates.
"We're surprised at the number of renters who had to deal with increases over the maximum," Desorcy said. "And we're surprised at how much the increases have been -- more than triple the cap."
She said the consumer association planned to make a presentation on the subject when the rental legislation comes up for review next year.
"We might hold a public meeting first with renters to assess public opinion before the review begins, but we haven't decided exactly how we will consult."
Residential tenancies branch director Roger Barsy said about 15,000 units, or 25 per cent of the approximately 60,000 rental units, saw rates increase above the one-per-cent level. The average hike for the units above the normal limit was about six per cent.
Barsy said part of the increase was due to the lingering effect of natural gas prices, which skyrocketed by almost 50 per cent a few years ago.
However, he said the branch is starting to see more applications related to capital expenditures.
On average, the residential tenancies branch gets about 100 applications for increases above the set limit. For the 2004 rental year, they've received 335 applications.
Shaer said the increase is likely due to the fact that most of the existing apartment blocks were built prior to 1970.
"You get a buildup of accrued maintenance over the years," said Shaer.
Rents can be raised once a year and tenants must be given three months' notice. Tenants can file an objection for any increase to the residential tenancies branch.
The Doer government has indicated that it is looking for ways to improve the system but has no plans to get rid of rent controls completely.