Winnipeg Free Press
May 10, 2001
FINANCE Minister Greg Selinger announced in his April 10 budget the lifting of rent
controls for 15 years for newly constructed rental units. He then stood back,
fingers in his ears, to await the resulting explosion of rental housing construction.
He is still waiting.
Canada Mortgage and Housing Corp. estimates that about two per cent of rental
apartments in Winnipeg are vacant. This shows that demand is strong. Investors
are, however, unwilling to risk their money in rental housing in this depressed
market. Mr. Selinger's gesture toward easing the impact of rent control showed
that the government recognizes the need for more rental housing. It needs to try
a little harder to find the solution.
A newly built rental apartment building in Winnipeg will be marketed in a city
where the prevailing level of rents reflects the effects of rent control. The going
rates also reflect the provincial government's refusal to increase the rental
allowance in its payments to welfare recipients. In these conditions, even with a
15-year exemption from rent control, a new building is unlikely to earn its owners
a decent return. Developers can achieve better results providing life-lease
apartments or condominium units for retired people. In faithful obedience to the
logic of Mr. Selinger's policy, developers are not building rental housing.
Rent control seems to be a kindness to the people but it is not. It is a kindness to
the people now occupying rental units who are content with their accommodation.
It is not a kindness to tenants who would like improvements and would be willing
to pay for them. It is not a kindness to those who want to rent an apartment but
cannot find one because of Mr. Selinger's rules.
Winnipeg's inner-city housing is sliding into decay for a variety of reasons. Mr.
Selinger could remove one of them by eliminating rent control.