Winnipeg Free Press
September 3, 2004
Changes to spur renovation, construction possible
By Mia Rabson
THE Manitoba government is studying possible changes to its rent-control provisions to help spur rental renovations and construction.
Finance Minister Greg Selinger, who announced the annual rent-control allowance yesterday, said a committee comprising representatives of government, tenants and property owners began looking at rent control a couple of months ago.
"We want to make it fair for everybody," Selinger said.
He said the group is trying to come to a consensus on possible proposals to improve, but not remove, rent control.
He wouldn't say what proposals are on the table, noting the committee is being chaired by his deputy minister and will report to him with recommendations.
"I haven't given them a hard deadline," he said.
For 2005, the provincial guideline for rent increases was set at 1.5 per cent yesterday. That is the maximum allowable rent increase for units renting for less than $1,000 a month, including apartments, single rooms, houses and duplexes.
New units that came on line after April 9, 2001 are exempt from rent control for 15 years as a way to spur new rental-property construction.
Property owners can apply for bigger increases if they have proof that 1.5 per cent would not be enough to cover their cost increases.
Tenants must be given three months' written notice of a rent increase.
Shaun Parsons, president of the Professional Property Managers Association in Manitoba, said his organization would like to see the annual rent increase ceiling brought into line with the Consumer Price Index. He said that between 1982 and 2004, there is a 17 per cent difference between the CPI and Manitoba's rent-control allowances.
He said the CPI would put property owners a lot closer to their cost increases for items such as natural gas. That would leave more money for renovations and capital improvements.
"I don't think you'll ever see an end to rent control in an NDP or a Conservative government," Parsons said. "It's a political hot potato. But the government really needs to involve us and realize the system is broken."
He said that most often he needs between three and six per cent rent increases to keep up with costs and make capital improvements to the properties. Although there is a dispute mechanism to apply for a bigger increase, he said the property owner doesn't have input into the final number; it's determined by the Rental Tenancies Board.
Manitoba's residential rental vacancy rate in 2003 was 1.3 per cent. Canada Mortgage and Housing Corp. reports that in 2003 in Winnipeg, there were 54,095 private rental units that rented for an average of $554 a month. The average rent for a one-bedroom apartment was $508 a month, and for a two-bedroom it was $645.
Parsons said Winnipeg's hot real estate market, spurred by low interest rates, has kept the rental vacancy rate a bit higher as people choose to buy instead of rent.