29 May 2011 ~ 3 Comments

Winnipeg’s low rental vacancy rate solutions

Realtors in Winnipeg are saying rent controls are choking off new construction and contributing to an acute shortage of Winnipeg rentals and rental units in Winnipeg, and they’re calling for less controls, new subsidies and tax credits to address the problem.

“Manitoba needs to move away from the current rent control regime if it wants to improve vacancy rates and better prepare for future immigrant-driven growth,” WinnipegREALTORS said in a 36-page discussion paper Tuesday.

Winnipeg has the lowest vacancy rates in Canada which has dropped from 1.0% to 0.8% in 2010 according to CHHC 2010 Fall Rental Market Survey. Not good news for immigrants looking for a place to rent in Winnipeg. The provincial government has pledged to increase the annual number of immigrants to 20,000. At the same time, the rental stock is declining – 673 less units between April 2009 to April 2010.

Winnipeg apartments for rent

Winnipeg apartments for rent

Rent Control

Manitoba is currently the only province in the country with strict rent controls. Effective January 1, 2011, the rent increase guideline set by Manitoba is 1.5% and can only be increased once annually. There are some exemptions to the rule but the property owner must jump through red tape when applying.

According to a report by Citizens Budget Commission, Reforming Residential Rent Regulations (New York: February, 1991), cities under a highly regulated rent control system similar to Winnipeg have negative consequences —

“Rent regulation, while initially justified as an emergency measure during World War II, no longer protects tenants equitably and has significant negative effects in the local housing market. It deters investment in new housing, discourages maintenance of existing housing, lowers the assessed values and tax yields from residential property, and hinders land assembly for development. It also provides a subsidy, from landlords to tenants, which inequitably benefits higher-income households more than low-income households.”
These affects are felt in the Winnipeg rental market:
  • There is a lack of new construction of rental units
  • It is difficult for low income owners obtaining a place to live
  • Existing rental units are not renovated and fall into disrepair
  • Home ownership becomes less affordable
  • Immigration to the city is stifled and it impacts economic development

Landlords with apartments for rent in Winnipeg are frustrated with the Residential Tenancy Act which favours the tenant in many situations. Case in point, unpaid water bills by a tenant are transfered to the property owner.

Rent Control Solutions

So what are some solutions for Winnipeg rentals?

  • Allow secondary suites through their zoning by-laws
  • Softer rent controls on new units or when a unit is vacated
  • Increase property owner control over their investments by scaling back the Residential Tenancy Act’s bias towards tenants
  • Make it easier for landlords to collect unpaid rents and transfer the onus of unpaid water and utility bills to the user, the tenant
  • Provide incentives and programs that encourage rental housing construction
  • The City of Winnipeg needs to make this a priority instead of just talk

Winnipeg houses for rent and Winnipeg apartments for rent are an important part of the overall health of Winnipeg’s economy. We’ll see what happens from here.

3 Responses to “Winnipeg’s low rental vacancy rate solutions”

  1. student letting newcastle 26 July 2011 at 5:34 am Permalink

    I wanted to thank you for this excellent read! I liked what little I’ve marked to see new things you write.

  2. Cem Anderson 2 August 2011 at 6:13 am Permalink

    the tenant act information was most helpful. thank you.

  3. Allan M 28 August 2011 at 10:35 pm Permalink

    *There is a lack of new construction of rental units*
    Which has nothing to do with rental regulation, at least in the short term.

    *It is difficult for low income owners obtaining a place to live*
    Higher rents make that even more unobtainable.

    *Existing rental units are not renovated and fall into disrepair*
    Come to Vancouver and see sky high rentals of even more dilapidated rental suites. There is not necessarily a link between the amount of rent and renovation.

    *Home ownership becomes less affordable*
    Huh? Paying more rent will help that??? Renters will save even less toward buying a home.

    *Immigration to the city is stifled and it impacts economic development*
    So do higher rents. What’s really needed are a return to investment in public housing paid for through higher taxation rates.

    Also, come to Vancouver and you will find very few new rental units are built. Almost all new buildings are condominium only.

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