Rent is on the loose while the province’s economy booms.
April 1st was a lousy day for Jess Huber. She had been living in her downtown-area two-bedroom apartment since December of 2009 and, despite its few problems, she had no plans to move.
Then she and her partner got a letter from her landlord saying that, as of July 1st, their rent would be $750 instead of $650 — a 15.4% increase.
“We were pretty surprised, given the problems that we’d been experiencing — mold, leaking ceiling in the bathroom and so on,” she says. “The landlord didn’t offer to fix those things in lieu of the rent increase. We were good tenants, we paid our rent early, we were clean, and we never asked to sublet.”
She was even more surprised, after calling government services, to learn that the 15.4 per cent rent hike was within the landlord’s right. According to Newfoundland’s Residential Tenancies Act, landlords can’t raise the rent in the first 12 months of an occupancy agreement and, after those 12 months are up, they can’t raise the rent more than once a year.
But they can raise the rent by however much they please.
Lorraine Michael, leader of the provincial NDP, thinks the province should be looking at more rent control. She says she hears from a lot of people in Huber’s position. Ontario, British Columbia, Manitoba, and P.E.I. have all introduced fixed amounts by which landlords can raise their rents each year and Michael thinks Newfoundland could learn a lot from their programs.
“I think it’s important because the demand for rental space is so high in our cities,” she says. “We have extremely low vacancy rates in St. John’s, Corner Brook and Labrador West and, because of that, rates are going up by exorbitant rates. You obviously are going to have a law that’s going to take care of both the tenant and the landlord. For example, if a landlord has to put extra money into the property for a major repair, then they can put in an application to raise the rent more than the set standard would allow.”
That, she says, would require the establishment of a separate provincial division to deal with rental housing policy, since one doesn’t presently exist: the Residency Tenancies Board was disbanded in the late 1990s.
Shannie Duff, City of St. John’s Deputy Mayor, sits on the mayor’s advisory committee on affordable housing. Duff says the city’s skyrocketing rents have contributed to longer waiting lists for both of the city’s affordable housing programs. But she’s not convinced that rent control is the answer for the people on those waiting lists, or for people like Huber who are just looking for housing affordability.
“The jury is out on that. There are a lot of people who seem to think that is a good idea, but there are two downsides it,” she says. “One is that it tends to discourage any new market housing, and we haven’t had any new rental construction in over 20 years. The second is that landlords under rent control do not maintain their properties.”
Instead, she’d like to see tax incentives and interest rate breaks for developers who build units for low-to-mid range rentals.
To an extent, Brad Stone agrees with her. He’s a realtor who also owns properties which he rents out.
“If you made the stipulations too strict, it could dissuade further investment,” Stone says. “If you had a vacant property, for example, or someone just purchased an investment property, and they couldn’t set the rent themselves and had to apply to the government to set the rent — well, I can’t see that working. And from working in real estate I’ve been in a lot of houses, and I know that some don’t do anything to their properties at all — no maintenance, these places are falling apart — and they’re increasing the rents anyways.”
All in all, he thinks that rent control legislation could work, as long as the rights and needs of both landlords and tenants are worked into it.
As for Jess Huber, who has since left her apartment for cheaper rent elsewhere, the solution is a no-brainer.
“Rent control, or even a standardization of rental increases across the province would have been a huge help.”