Winnipeg Free Press
Landlords want a better deal
By David Kuxhaus
Legislature Reporter
CONSUMER AND Corporate Affairs Minister Ron Lemieux says his government will review whether rent controls should remain in place. "It's a concern, there's no doubt about it," Lemieux said yesterday.
Manitoba is the only jurisdiction in Canada with a full rent-control regime, and landlords have long complained they've been netting a raw deal.
Since 1993, the annual rental increase allowed has been held to one per cent.
Meanwhile, vacancy rates in Winnipeg have fallen to three per cent from six
since 1996 - the lowest level since October 1987. The vacancy rate has hit 0.7
per cent in some suburbs.
A growing economy has attracted new residents, but at the same time, there hasn't been much in the way of new construction.
Part of the problem, Lemieux concedes, can be linked to rent controls that can cat away at potential profits.
According to the Apartment Investors Association of Manitoba Inc. (AIM), a non-profit group representing small landlords, rent increases in the province since 1988 have grown by 23 percent. During the same period, inflation has increased 35.5 per cent. AIM says if rents bad been allowed to rise with inflation, landlords would have collected an extra $200 million last year. Moreover, it says the cost for utilities such as hydro, natural gas, sewer and water have also outstripped rent hikes.
It's estimated the cost of operating a building has risen to between 60 and 65 per cent of gross revenues from 45 per cent.
Lemieux said he plans to meet builders, consumer groups and landlords by the end of the year to discuss the issue. "I want to see what options are out there," Lemieux said. "It's not just good enough to shoot something down without coming up with a positive alternative."
In Manitoba, rent controls were, first introduced in the early 1970s. Later in the decade, Gary Filmon, then a Tory cabinet minister, abolished them. The unpopular move helped the NDP back, to power. They quickly reinstated controls. In recent years, the Tories kept in them in place arguing that landlords can apply for larger increases if they can show the guidelines will not cover operating costs incurred.