Winnipeg Free Press
Vacancy rates plunge to 16-year low; officials want easing of price controls
By Leah Hendry
WINNIPEG'S rental housing market is feeling the squeeze as vacancy rates have dropped to the lowest point in 16 years, bottoming out at 1.4 per cent.
The downward trend began in 1996 when vacancy rates hovered around six per cent and steadily declined to two per cent in 2000, according to Canada Mortgage and Housing Corporation. Three per cent is considered a balanced market.
Want a high-end apartment? Forget it. You won't find one.
In suburbs such as St. James-Assiniboia and Fort Garry, it's virtually impossible to find an apartment, as overall rental rates fell from one per cent last year to 0.7 per cent.
"There's no vacancy," said David Stansen, CMHC's senior market analyst for Manitoba. "An apartment in that area will be on the market for a few days before it's gone."
A robust job market, a growing population and an absence of new apartment construction have all put added pressure on an already-tight rental market, Stansen said.
There is also a strong link between the condition of the apartment and how high the vacancy rate is.
"The older the building, the higher the vacancy," Stansen said. "Maintenance appears to be an issue."
Approximately two-thirds of the 96,000 rental units in Winnipeg were built before 1963, said Bob Shaer of the Professional Property Managers Association of Manitoba.
"We have a sizeable and aged stock, much of which is in need of repair," Shaer said.
In particularly run-down areas such as Lord Selkirk, the vacancy rate rose from 3.6 per cent to 4.4 per cent, with some of the lowest rents in the city at an average of $387.
"If it was an issue of affordability, you would see a big move toward that area," Stansen said. "But people are staying away because of the neighbourhood or the condition of the apartments."
It isn't about the reluctance or inability of landlords to improve their buildings, but rents being artificially held down, said Shaer.
"It sounds like a broken record, but what is the province prepared to do?" Shaer said. "There has to be an increase in rent to have money to refurbish apartments."
While Shaer understands that rent controls are there in part to protect low-income families, social assistance levels have not been raised for years.
"Quit having private-sector landlords subsidize the less fortunate," Shaer urged. "Give them higher social assistance funding so they can afford better accommodation."
Introduced in 1975, rent controls were brought in to address rising inflation and interest rates.
Today, rent controls are out-of-date and have prevented rents from rising to meet market demand, said John Kenny, former president of the Apartment Investors Association of Manitoba.
The rent increase allowed under the guidelines - it's 1.5 per cent this year and will rise to two per cent next year - doesn't keep pace with inflation and discourages landlords from building new units.
"Everything else is rising but rents aren't," said Kenny, who hopes a meeting between the provincial housing ministers and the federal government in Quebec City next week will inject the market with much-needed funding.
"I'd like to see a concentrated effort by the province to renovate and refurbish public and private property," said Kenny. "Landlords need to make a profit. They aren't going to invest if there is no incentive to."