Winnipeg Free Press
August 20, 2001
Rent-control shift hasn't prompted construction
April prod to jump-start building ignored by apartment developers
By Kevin Rollason
FOUR months after the provincial government announced changes in rent control
to encourage the construction of new apartment buildings, not a single property is
in development.
Cliff Olson, president of the Winnipeg Construction Association, said not only are
there no new apartment buildings being built, it's a bad year for construction all
around.
"Construction in Manitoba is really down this year," Olson said yesterday.
Builders, real estate agents, civic politicians, and apartment developers are united
in identifying the reason for the lack of rental apartment construction: rent control.
Critics of rent control have long argued it keeps the price of rents at an artificially
low level, and therefore doesn't stimulate construction or renovation. And the end
result is the tight vacancy rate in Winnipeg of 1.5 per cent.
Lorne Weiss, Winnipeg Real Estate Board vice-president, said unless the
provincial government gets rid of rent control, some Winnipeggers will find
themselves on the street.
"There hasn't been an apartment building built in 15 years here," Weiss said.
"It won't be easy for the government, but they have to do it. If we continue down
this path we'll have a real crisis and people who can't afford housing will be on
the street.
"When you're in a limited market with no apartments and no affordable houses,
where are these people going to go?"
Weiss said the government should replace rent control with rent subsidies given
to people who need it.
"They should be subsidized by the government and not the landlord."
Last April, provincial finance minister Greg Selinger announced the lifting of rent
controls for 15 years for newly constructed rental units.
As well, the provincial government announced in May that it was now reviewing its
rent-control program to see what impact it's having on new construction activity.
Mayor Glen Murray said he has talked to Consumer and Corporate Affairs Minister
Scott Smith and he's hopeful the provincial government will look at making other
changes to rent control.
Murray said he'd like to see a housing system that offers creative options such as
a rent-to-own program in the Netherlands.
"We would hope the province and the private sector would work together, but
politically it is a very sensitive issue," he said.
"We shouldn't get rid of all rent control because lower income people need
protection, but there are other things that can be done."
But if the province is closer to making a decision on rent control, it wasn't saying
so last week because Smith, whose portfolio includes rent control, wasn't
available.
A government spokesman said he couldn't say why Smith was not available, just
that all statements about rent control and apartment construction would be made
through the spokesman.
The spokesman did say the province is reviewing rent control, which it does
annually.
And the spokesman said the Canada Mortgage and Housing Corp. announced
there were 91 multiple housing starts in July instead of the six at that time last
year.
But Sandy Shindleman, president of Shindico Realty, said due to rent control the
only new multiple housing starts at this time are mainly life leases for seniors.
CMHC said the rest were condominiums.
Shindleman said the low vacancy rate caused by the lack of apartment
construction means many people in single family homes who want to move into
apartments, after their children move out or for security reasons, can't find the
place they want.
However, Shindleman said it's not just rent control that is stopping investors from
building new buildings, but also the city's high property taxes.
"With the high tax burden, it does not leave too much profitability," he said.
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