Discussion paper offers solutions to rental housing shortage

The chair of the WinnipegREALTORS® task force that recently released a discussion paper on the rental crisis in Manitoba says the message they hope comes out of the document is that everyone, including government, the private sector and other affected groups, needs to work together in order to come up with a fair solution to the existing scarcity of rental units. 
“Doing more of the same is not an option,” said Mel Boisvert, the chair of the task force.“It is very evident that there is a rental shortage and its of crisis proportion.
“There is no single solution, and there’s no quick fix,” added Boisvert. “We don’t say we have all the answers, but we’d like to talk about the problem and focus on what we see as potential solutions.” 
“Rent control is just one — not the only — aspect of the problem that needs to be addressed,” said Boisvert.
The 36-page discussion paper, Manitoba’s Rental Housing Shortage, is proposing ways to soften the effects of rent control in order to encourage more investment in rental units, explained Peter Squire, the WinnipegREALTORS® market analyst.
One solution to the rental crisis,  mentioned by Boisvert and contained in the discussion paper, was the course taken in Ontario, which involves dropping controls when a unit becomes voluntarily vacated. 
When the vacant unit is placed on the market, its rent is determined by what a new renter is willing to pay in negotiation with the landlord. Once rented, the unit is again placed under rent control.
Boisvert said REALTORS® witness first-hand the negative effects of the rental crisis on the housing market.
“We see in our day-to-day activities how people are affected,” he said. “The rental shortage is pushing some people into becoming first-time buyers when they would normally be renters. And, some of these buyers don’t have the same financial wherewithal as a second- or third-time buyer.”
In particular, Boisvert said first-time buyers are finding it difficult because the entry-level market with home prices under $200,000 is shrinking due to escalating prices.
“There are some areas of Winnipeg where there is virtually nothing to rent (house or apartment) so, invariably, any house that becomes available for sale is the only choice for someone to bid on. 
“As a result, prices are being bid up beyond the reach of first-time buyers,” he added.
Boisvert applauded the province for its highly-successfully nominee program, which has attracted thousands of newcomers to the province, “but they need a place to live.”
Over the past 10 years, Manitoba has grown by 92,000, an increase roughly equivalent to the present combined populations of Brandon, Thompson, Portage la Prairie, Steinbach and Winkler.
He said immigrants invariably begin as renters, but this option is being closed to them by the scarcity of rental units.
Recent data indicates Winnipeg’s overall rental vacancy rate is a mere 0.8 per cent, which is the lowest among the 34 metropolitan centres surveyed by Canada Mortgage and Housing Corporation for its latest rental market report.
In other Manitoba centres, rental vacancy rates are similarly low: for example, Steinbach’s rate is 0.6 per cent, Thompson’s is just 0.3 per cent and Brandon’s rate is 0.6 per cent.
“The challenge is to open up the market to attract investors, protect owner’s rights and acknowledge tenant’s rights, while promoting  better access to affordable housing,” according to the WinnipegREALTORS® paper.
The discussion paper suggests offering property tax incentives to encourage investment in more low- to moderate-income units, as well as the introduction of a shelter allowance for low-income earners to cope with rent increases.
“Rent control actively discourages maintenance and upkeep of units as funds cannot be raised to cover costs,” according to the discussion paper.
In some cases, rental apartment units are converted by frustrated owners into condominiums. 
“As a long-time operator of affordable rental units in Winnipeg’s inner city,” said Helmet Baldes, a member of the WinnipegREALTORS® rental task force. “I can say unequivocally that the current system is flawed with inconsistent applications of rules and procedures.
“While I have survived and become more adept at dealing with a cumbersome Manitoba rental regime system, I totally understand how small operators will throw up their hands in frustration and sell of their rental properties.”
“We’re one of players who is hearing what the problem is,” said Boisvert, “and we believe government would what to know about what we’re hearing. 
“We can all work together toward a solution,” he added.
The complete discussion paper can be viewed at www.winnipegrealtors.ca