Rent Control in Alberta?
January 28, 2007 · By Aaron Unruh
Jason Cherniak has written a reasonable argument in favour:
The fact of the matter is that the market in Alberta is unable to keep up with the demands of the population. There is no advantage to forcing one person to move out of an apartment so another can pay 30% more for six months. Ultimately, both people are working and still need somewhere to live. I think the answer has to be some form of rent control that protects the working poor. The growth is so massive that the construction business is not going to slow as a result. If anything, it will force those who are able to pay more to wait for new spaces.
Assail or commend him in his comments section. But also keep in mind that Alberta’s growing housing problem cannot be ignored for much longer.
The other possibility that Jason did not mention, and which seemed to work okay in Ontario for many years, was for the Province itself to get involved in building rental housing.
Rent controls help, but in the late 80s when things were booming in TO, we had ‘emm and the rental situation still sucked.
A co-worker whose parents own an apartment building, stated that not having rent control in Alberta was great, because if you didn’t like your renters, you could get rid of them easily by hiking the rent up.
Some type of rent controls are necessary to be sure, especially where the supply and demand are way out of whack.
They did work in TO when I lived there, in the 90’s. Although it was always a battle, the situation could have been far worse without them.
So one imposes a policy that will dry up the building of new rental accomodation?
Young people have to look at what has gone on before them so they do not advocate the repetition of stupid, disastrous “policy”.
“The other possibility that Jason did not mention, and which seemed to work okay in Ontario for many years, was for the Province itself to get involved in building rental housing.”
I’d be all in favour of this in Calgary if the province committed to building high density housing in central areas. Right now, the impulse is to develop more and more single-residence dwellings in more and more sub-divisions, wreaking havoc on the city’s roads and utilities.
The manufactured home industry of Saskatchewan has never done better before, thanks to a booming Alberta. Single wide trailers are litterally flying through Lloydminster. Imposing government controls to “slow things down” won’t work, because someone always finds a way around the rules.
Some tar sands plants already fly in workers from the Maritimes for 20 on ad 10 off. The same can be done with bringing in skilled construction trades to build houses and rental apartments. Keep the government the hell away from a booming economy.
What’s that?
Cherniak’s a Liberal.
Oh.
Never mind.
Cerniak may want to confer with his hero, Dion. If rent controls were to be adopted in Alberta, would that not leave even more “easy money” in the hands of Albertans?
heh!
Heh indeed
Eskimo,
I suspect if it were that easy to bring in construction workers it would have been done. Vancouver, Toronto are also pretty close to “booming” when it comes to home building. That sucks up alot of the national labor force right there.
You want rental units, under the conditions that exist in Alberta, you will have to have a government commitment to build them. Mark my words. I mean, I live a thousand miles away. It’s no skin off my ass. But unless you want the tar sands and Fort Mac to degenerate into the dry land version of an oil rig, you will have to start thinking of government controls.
Yes, the Liberals will all jump to recommend building rental accomotdatin by the Province. Their friends get the benefits and corruption blooms.
I remember the Peterson government’s problems with that sort of thing (by the way, Bob Rae inherited Peterson’s problems and only added a little bit!).
Recent reports have cited fact that housing crunch is that dire in Alberta that even the working are homeless. Rent controls have proven useless when prices unconcionably over-inflated anyway. The real estate industry are the culprits in “boom times.” Correction — for “all times.” Time to look at reducing over a quarter century of inflated mortgages, rents by 50 percent for starters. After all, working solely to cover mortgages/rents is ludicrous in the extreme. The people have no choice but to buy into it. That’s where the jobs are. And hopefully they are aware that rising interest rates will come into play before long which will further compound housing difficulties including the prospect of foreclosures.
Flaherty and Layton this past week drew attention to ATM fees. Mortgage/rental rates remain as yet “the untouchables.” That’s unlikely to continue.
Rent increases may be fine if it is justified. Though when I see rents increase 10 fold. These landlords should be strung for it’s greed. Many of these rentals try and get a repair done, like pulling teeth. There not landlords there slumlords. I have been on both sides of the fence. You get good tenants and bad tenants. You get good landlords and bad landlords. Though I own my home now. In the past I have had excellent landords that would give you a break instead of screwing you. When I here comments well move and find something cheaper, where. When and if a crunch ever hits and it will. They should place many of theses greedy people at the end of the soup line. What goes around comes around.
I think it is disgraceful and disgusting when landlords think that they can exploit their tenants the way they do. Some landlords take advantage of the fact that because, for example, in Calgary where it’s supposed to be booming, tenants who don’t earn a decent salary to even cover the cost of living have to put up with greedy landlords who put the rent up, even though it was already high in the first place. I am totally in favour of the idea of rent control.
I am a single mother who received a notice that the 4-plex I am living in will be sold and that I have to vacate by Aug. 1/07. Approximately 2 weeks later I received another notice that the rent will increase by $200.00 by June 1, 2007. I cannot afford to pay the $200.00 increase and have been looking for another place to rent in the Morinville, St. Albert, & Edmonton area. There is nothing affordable, so I am forced to look at moving out the province. This landlord has become extremely greedy. The asking price alone for his units is out of this world. Where do we go? I have a decent job and will have to give it up and move where I may end up working in a fast food restaraunt. I am now a hospital clerk and have health benefits and job security, but no place to live.
It’s time to change the laws in alberta to have rent control.
[...] Brenda shares here own experience with Ralph Klein’s unregulated “boom”: I am a single mother who received a [...]
I am in favor of rent control.It was in effect in the 70’s.Students and people on a fixed income, like seniors don’t have much of a choice as to where they can live.
Some help should be available.
Rent control is no answer. What will happen is that few new buildings will come on the market, current buildings will continue to be converted to condos and sold off, as a result fewer, not more, rental spaces will be available. The biggenst problem is the soaring cost of land for housing. This is a result of developers maximizing profits by witholding lots and creating a shortage. There should not be any shortage, after all we have land as far as the eye can see.
Rent controls will not work, they haven’t been successful in the past, landlords either sell off or are even worse at fixing stuff, what the government needs to do is get involved in building of high density affordable housing, either through providing grants to accomplish this with controlled rents in these places. The issue is not so much the prices but that places are being sold out from under people. Then they have no where to go even if they could afford the rent. I have rental properties and I try to rent them at a reasonable amount as well as fix them up really nice for people, I offer 1 year leases at a fixed price rather than this six month or month to month trend that landlords are adopting now. My rents are reasonable but not cheap because I have people tell me so and are waiting to rent anything I acquire (I give a home as nice as my own for the same or less than a dumpy place). I wish I had more so I could help more people but I can’t afford to buy anymore. I don’t know what the solution is but rent controls will force me to sell and then there will be more people out of a home.
[...] Rent Control in Alberta? [...]
Alberta is screwing themselves into the ground, and setting themselves up for a big fall. When the economy finally crashes, it will hit hard. We need controls in to keep rent from rising unless there is just cause. What is the point of coming to Alberta for the pay when you fork out so much more in cash, you still can’t afford to live. Its a blind cash pit. Yes, there are l a lot of jobs that pay well, but not well enough. It is already out of control, and on the rise. We not only need to stop this, but we need to bring it down. People are now leaving Alberta because they can’t afford to live.
MAGIC BEANS
I would like to sell you some magic beans! These beans will make it possible for everyone to be happy and solve all their problems. They are wonderful, beautiful and everyone agrees, especially the socialists, that the will help the poor. Would you want some? They are so magic, they will allow everyone to get everything they want at no cost! Sound to good to be true, well perhaps it is.
Rent control in Alberta, even the limitation of rent increases to only 1 per year, is a magic bean. Socialistic Politicians, poverty activists, homeless activists might as well buy magic beans as put in these controls if they are trying to house people. With 100,000 people moving in to this province a year we need new housing. I would like to ask you this simple question. Does restricting the price of apartments cause more or less apartments to be built? I think the answer to this question is obvious. Restricting the price of apartments will stop the development of new apartments!
I recently sold my first home by myself and made 3 times as much as I paid for it 5 years ago. I then put half down on a new house which is now worth over a half million dollars. My wife and I have 2 very young kids, and mine is the only income. With the remainder of the proceeds of sale from our first home we were able to pay off all of our debt, and buy a new car and take a vacation to California. I do not work in the oilfield industry. I don’t seem to have any problem with Alberta’s economy. I have a high school diploma and have been at the same job for 14 years. Its about making the right choices. I quit smoking in 2001 to buy my house. I kept the same job. I am tired of people complaining about high rent, and cost of living. Make better choices. No one helped us out, we did it ourselves.
The rent control topic is one that brings out strong emotion on both sides of the issue. On one hand you have working people who are left with the impression that rent raises are out of control. When someone sees a rental raise of 200.00 dollars per month plus there tends to be some strong emotion. On the other hand landlords are in a situation themselves on the issue of raising rent. Somethings that are taking into consideration would include rising utilities expenses, the high cost of buying and maintaining rental properties, and having good tenents that respect their investment.
The challange of the situation is to find a solution that provide return a reasonable rate of return to landlords while not depriving good people of basic human needs. Perhaps a form of industry/self regulation is a good option. Groups of landlord come to a consenses on what is to be considered a reasonable adjustement. They would do this taking into consideration rising maintanace cost, acceptable rate of return, and tenent/landlord relations and the possible economical backlash from bad relations. Self regulation is good because it creates guidelines that help prevent government interference if followed.
Another thing that can be looked at is regulating or subsidizing things that increase maintance of rental properties. For example utilities have since degregulation gone up a considerable amount. The rise in utility cost is a factor in raising rent. Regulation or subsidies of things like utilities will work in the favor of maintaining affordable housing. Perhaps in this boom economy government should apply surplus to maintain basic standard of living rather than building big expensive hockey arena’s. (In case you are woundering I am renter I have my position with with responsible rent increases that reflects overvall inflation. I think 5-10% give or take per anum is responsible that equals a healthy return in the long term.)
I am a landlord that recently bought a building in Edmonton. I paid 2.5 times what the original owner paid 5 years ago at a realistic CAP rate of 3 % . The previous landlord was enjoying a CAP rate of 15% and absolutely left the building in a slum-like condition. He was just using it as a cash cow. Now I am left with all the repairs, etc at the marginal 3% CAP rate. I wanted to be modest so I increased rents $175 as I was expecting I could make another increase in 6 months- now I will have about 5% CAP which is still low. My increased rents are still below “2006 market rates” and now I have to wait one year before increasing. If I knew this was coming I would have increased rents to full market value. Now I have no choice but to sell to a condo flipper. Definetely, rent controls have forced me to dump my “just bought” property as it is not economically feasible for me to run this as a business w/ 5% CAP.
PEOPLE, don’t blame landlords, blame the realtors and yourselves(me included) for overpaying for properties. To put it simple for landlord to make sense economically if Real Estate increased 100% within the 1 1/2 years it is only logical for rents to increase at the same rate.
At a certain point you should ALL realize and say to yourself “You know what Mr. REALTOR go stuff that 800 sqft $350K house up your ….
Rent control is a bad idea - a temporary fix for a temporary need that in the long run benefits primarily the wealthy and reduces overall rental housing stock available. The landlords’ postings are absolutely what ends up happening. Economists on both the left and the right are agreed - Paul Krugman calls rent control ‘a textbook case of economic stupidity’: http://www.pkarchive.org/column/6700.html. Swedish economist (and socialist) Assar Lindbeck: “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”