Winnipeg Real Estate News
Feb. 16, 2001
Winnipeg Real Estate Bard president Michelle Rowan has restated the board's position that it supports changes to the rent controls system.
The president said the board has supported the Professional Property Managers Association's position calling for rent control changes since 1998. Recent media reports prompted Rowan to again state the board's position.
In particular, a Winnipeg Free Press article this; week said Mayor Glen Murray has come out opposed to rent controls. This was a position reported by the WREN in a front page article on December 1, when the mayor said that it was time to find a replacement for rent controls because they discourage investment in multi-dwelling rental properties.
"You've got to create a market for apartment investment." Murray said.
All the considerable money and effort going into addressing the inner-city plight of Winnipeg's housing stock will be short-circuited if there is not a serious review of provincial legislation and regulations that hinder reinvestment in decent affordable accommodations," said Rowan in a letter addressed to the media.
The board is "commending the mayor, city councillors and others for calling on the province to replace rent controls," added Rowan. "At a minimum, there should be a review ... we ... realize there will be budget implications to the province in provision of affordable subsidized housing."
Bob Shaer, the president of the PPMA, earlier told the WREN that in more than a decade, there has not been a single rental apartment building constructed in Winnipeg. He also pointed out that of the 98,483 rental suites in Winnipeg, over 50,000 pre-date 1946.
Jerry Klein, general manager of Genstar Development Company, Winnipeg region, told the WREN that he can't recall when his company last sold a property for an apartment project. "Of the many sites that we have had zoned prior to rent controls for rental properties, we have had to revert to selling them for some other purpose such as bungalow condominiums or have them rezoned for a small lot single-family dwelling, added Klein.
"What we want to do is give the government the tools to pull back (on rent controls) if it is required," Shaer said. "Rent controls work, if there is some give and take."
Shaer and the board are the first to admit that any mention of changing rent controls is a political hot potato.
Manitoba Family Services and Housing Minister said rent controls have been reviewed by the province but no changes are anticipated in the near future.
Shaer said the quantity and quality of rental housing has been severely reduced in Winnipeg because of rent controls. He cited studies that have shown that as rent-controlled property becomes less profitable, a landlord either converts it into a more profitable use or lets it deteriorate.
"We're looking for sustainable neighbourhoods, so that 12 to 15 years down the road there will be willing buyers and sellers of rental property. At present, the situation isn't sustainable - it is detrimental to housing stock. The downtown and the problems it now has is growing by 10 blocks every year.
"People say that making the downtown better will only raise their property taxes. I say, I'd be happy to pay more property taxes. That would show people are re-investing in the inner city," he added. Meanwhile, as the value of inner-city rental properties decrease, suburban homeowners are forced to take up the assessment slack, resulting in higher property taxes.
Shaer said that from 1992 to 1998, the Consumer Price Index published by the government in Winnipeg has gone up 13 percent, but allowable rent control increases in the six years has only gone up six per cent.
"We're asking the government for a rate that is the same as the published CPI. There should also be an allowable catch-up period for the next two or three years to bring units up to the CPI."
Shaer said the 1.5 per cent increase allowed this year is 50 per cent higher than the last seven years, but offers little comfort to building owners facing hefty increases in, among other things, natural gas prices. The PPMA is also proposing that all new private rental construction be exempt from the Rent Control Act and that when a rental property is voluntarily vacated by a tenant
that the unit then be re-rented without using rent controls. Once the unit has been rented in this competitive environment, it will then be subject to some form of rent controls, explained Shaer.
Landlords cannot use coercion to vacate a suite, he added. "The whole process would be governed by the Residential Tenancy Act."
Rent controls were introduced by the NDP in the early 1970s by then housing minister Eugene Kostyra. They were repealed by the Tories in the late 1970s. After the NDP returned to power rent controls were re-introduced. The Filmon Tory government kept rent controls in place during its 11-year reign.