As IRAC considers rent increase, landlords, Greens point fingers at government

With the deadline for submissions to P.E.I.'s Island Regulatory and Appeals Commission on allowable rent increases coming Friday, both landlords and tenants are being encouraged to make sure their voices are heard.

Cecil Villard, executive director of the Residential Rental Association of P.E.I., said his group was able to increase the number of landlords submitting feedback to IRAC on rent increases from fewer than 10 in 2020 to about 40 in 2021.

Since 2017, IRAC has capped rent increases between one and two per cent. That is discouraging developers from building new apartments, said Villard, while the Island is in the middle of a housing crisis.

"Owner operators are falling further and further behind every year, and these are the same people that we rely on to provide the same housing," he said.

MLA Karla Bernard, housing critic for the Green Party, said she recognizes a one per cent allowable rent increase is a problem for landlords at a time when the annual inflation rate is running in double digits,

"Inflation does affect landowners and landlords but it also affects tenants," said Bernard.

"So where should the burden be placed? You know housing, it is a human right."

The Green Party would like to see rents continue to be capped in the one per cent increase range. Bernard urged tenants to write to IRAC before the Friday deadline to make sure their voices are heard.

P.E.I.'s rent controls do not apply to new builds, and landlords may apply for increases above the set cap if they face extraordinary expenses, such as due to renovations.

Problems with government policy

Both Villard and Bernard said government policy is creating problems in the rental market.

"We have the most restrictive legislation around rent controls in the country," said Villard.

"We're mixing rent control with the conversation on affordable housing, and they're two separate issues."

Rent controls are slowing the construction of rental properties, he said. As an example, he said from October 2020 to October 2021 there was a 38 per cent reduction in construction of rental property.

More recent data shows a mixed picture.

The number of completed apartments was down in the first half of 2022 compared to the first half of 2021, with 181 units completed this year and 367 units last year.

But building permits for apartments, signaling an intention to build, are way up. Permits for 464 new units were registered in the first half of 2022, compared to 331 in the first half of last year.

Bernard argues that government policy is having a direct impact on rent.

The government strategy of providing rental supplements to low-income Islanders is resulting in landlords being able to increase rents, she said.

"[This] has caused our rents to be artificially high. The market value is way off the charts compared to what people can actually afford," said Bernard.

"Wouldn't it be better if people could pay their own rent, because it was affordable?"

The government needs to focus on building social housing, she said. Instead, she said it is on track to spend more on rental supplements than they are on building housing.

Provincial officials told CBC News about $9 million was spent in 2021 on rental vouchers and rental supplements. CBC News asked for the amount spent by the provincial government on affordable housing units in 2021, but were not provided that figure.

P.E.I. landlords and tenants have until 4 p.m. Friday to submit comments on the maximum allowable rent increase for 2023.

You can email your comments to IRAC and the office of the director of residential rental property here.