By Tonya Moreton, PPMA Executive
Director
With the likelihood of a spring election call, the Minister
of Consumer and Corporate Affairs announced last month that the rent guideline
increase for 2003 was set at 1%. Minister
Scott Smith, stated in his news release that “The
guideline continues to ensure affordability for tenants throughout the province,
while recognizing increased costs for landlords."
At first glance this amount appears to be a step backward
by the Doer Government, who had in the past two years increased the guideline
such that it would more accurately reflect the annual CPI index (which sits at
an average of 2% for 2002 and was 2.6% for 2001).
However the real hardship brought by this digressive policy
is not thrust on property owners and managers, who have an avenue within the
Residential Tenancies Branch to apply for increases above the guideline, albeit
a cumbersome and costly process, where capital expenditures warrant increases.
Recent applicants have been awarded rent increases ranging from 3-10%.
Thus the hardship brought about by the current form of rent control is
more a burden to the very group that this guideline and the whole Manitoba rent
control system purports to protect - low income residents.
Numerous studies and reports over the past decade have
proven the detrimental effects that stringent and prolonged rent control systems
have on economies, residential rental properties, tax bases and most
importantly, the low income residents such controls were set up to protect.
And while other provinces in Canada have seen the modification of
(Saskatchewan and Ontario) or the complete removal of (Alberta, British
Columbia, the Maritime Provinces) rent control systems, successive Manitoba
governments continue to embrace a rent control system by which any short-term
benefits have long been overshadowed by the devastating long term effects to the
residential rental industry and the province as a whole.
Both Minister Smith and Minister of Housing, Tim Sale have
been quoted as saying that they will not consider making any changes to the
current rent control system - such as relieving voluntarily vacated suites from
rent controls until they are once again occupied, coupled with increases to
shelter allowances to the needy. However,
at the recent meeting of the Canadian Federation of Apartment Associations, of
which the PPMA is a member, it was unanimously expressed by each province that
increases to shelter allowances and rent control relief were the top priorities
to realizing new construction and urban revitalization.
It is argued by proponents of rent control that such changes would allow
property owners/managers to raise rents out of reach of the average renter,
would not provide the renter with any benefits and would not foster new
development of residential suites.
On the surface this statement could garner support for
keeping the status quo on rent controls, but what the Ministers neglect to
acknowledge is that in Ontario where the “voluntarily vacate” system was
adopted over five years ago, there has been over One Hundred Million
Dollars spent on refurbishing the existing housing stock and today there
are over one thousand new rental units under construction.
The same trends of refurbishment and subsequent new construction were
realized in Saskatchewan with the complete removal of their rent control system
by a then NDP government.
What both of those provinces had and what our government
lacks is the grit to swallow the short-term growing pains that come with change
in order to plant the seeds of new growth and true urban revitalization.
Current programs offer band aid solutions that fail to address the
ongoing malaise affecting the entire population of this province.
For as residential properties continue to age and no new properties are
under construction and as populations continue to move from rural areas into
urban ones (as continually demonstrated by CMHC studies and the 2001 census),
vacancy rates will remain below 1% and as a result the housing shortage in
Winnipeg will magnify exponentially until the breaking point.
What lies ahead for the residents of Manitoba? The Ministers cannot or will not initiate the changes necessary to achieve a standard of “safe, comfortable and affordable” housing. The property owners/managers of this province will continue to work within the existing framework of the RTB to successfully apply for increases above the guideline. But what about the residents? They are still caught in a framework of aging buildings, tragically low vacancy rates and sub-standard shelter allowances. But as the Ministers are so fond of pointing out, the system works...or does it and for whom.