Winnipeg Free Press
Sep 10, 2001
The recently announced two-per-cent allowable
increase in rental rates for 2002
should be greeted with horror for both the apartment
owner and homeowner
alike.
Firstly, let's take a close look at what a
two-per-cent increase in rents means for
the average apartment owner. Over the past year, gas
prices were up over 50 per
cent and even with the recent decrease, they are
still up close to 30 per cent from
where they were a year ago. Further, with the recent
reassessment, property
taxes for many owners will be rising, and let's not
forget that the ever-aging
housing stock in Winnipeg is in need of increasing
repairs and upgrades.
The Residential Tenancies Branch and government
often point out, correctly, that
there is a process for landlords to follow to raise
rents above the posted
guidelines. What is not said is that this is a
time-consuming process filled with
bureaucracy. Also, as part of the process, the
landlord must allow tenants to see
their complete financial information (not too many
businessmen in other industries
would open their books to their customers). However,
most importantly, the
application process looks at total operating costs
and capital expenditures, not
simply one item such as natural gas. So if a
landlord runs out of money paying
huge gas bills and cuts back on repairs in a
particular year, he may not be able
raise his rents over the limit and will suffer a
financial loss as well as having his
building deteriorate.
The process assumes landlords have unlimited
funding to continue to pay
escalating costs such as gas, as well as continue to
maintain their buildings. In
addition, the process only allows landlords to
recover costs they incurred at least
one year prior. A very expensive proposition when
costs rise rapidly.
Unfortunately, this leaves housing stock in poor
condition, which in turn results in
lower values.
This is where the homeowner should be concerned.
With only a two-per-cent
increase in rents, an amount less than the increases
in costs, when the next
assessment is done, Winnipeg will find itself with
apartment valuations that have
not kept pace with other residential housing. This
will shift the tax burden even
further to the homeowner. This includes owners of
condominiums, as well.
I urge all homeowners to be concerned about rent
control as it is not only a
"landlords" problem. It means higher taxes
for your home and mine.
DAVID GURVEY
Winnipeg