Nenshi stirs up a hornets nest with his landlord gouging comments

[opendoor]

I'm surprised there's no type of rent control in Alberta. As far as I'm aware, pretty much every other province in the country has limits on how much you can raise an existing tenant's rent.

I can certainly understand the notion that it's the person's property and they can charge what they want, but in other areas of the tenancy law there's a big distinction between what you can do with an existing tenant vs. a prospective one so it seems odd to me that rent doesn't fall under that too in Alberta. I mean, couldn't a landlord pretty much short circuit the normal eviction process by raising a tenant's rent to an unaffordable level so they'll leave on their own?

Personally, having been both a renter for several years and now a landlord of multiple properties in a province with rent control, I have no problem with limits on rental increases for existing agreements. Market forces (i.e. price to rent ratios) have had an exponentially larger impact on my returns than things like rent increase limits have. On the other hand, the predictability of future housing costs as a renter that came with those rules was invaluable to me.

[Swarly]

Originally Posted by opendoor

I'm surprised there's no type of rent control in Alberta. As far as I'm aware, pretty much every other province in the country has limits on how much you can raise an existing tenant's rent.

I can certainly understand the notion that it's the person's property and they can charge what they want, but in other areas of the tenancy law there's a big distinction between what you can do with an existing tenant vs. a prospective one so it seems odd to me that rent doesn't fall under that too in Alberta. I mean, couldn't a landlord pretty much short circuit the normal eviction process by raising a tenant's rent to an unaffordable level so they'll leave on their own?

Personally, having been both a renter for several years and now a landlord of multiple properties in a province with rent control, I have no problem with limits on rental increases for existing agreements. Market forces (i.e. price to rent ratios) have had an exponentially larger impact on my returns than things like rent increase limits have. On the other hand, the predictability of future housing costs as a renter that came with those rules was invaluable to me.

How do you control the amount that a landlord is allowed to increase?

In my situation I have a lease agreement for 1 year, at the end of that agreement I must move out unless a new agreement is made. If there are suddenly rent raise caps put in place would I just find myself without a new lease at the end of the term so that the landlord is now dealing with new tenants and can charge whatever he wants to again. Not that this would be worth doing every year for him but at times like this when we are talking a potential 20-30% possible increase.

[photon]

Originally Posted by SebC

Not really. Business can also be about mutually beneficial transactions. Producer surplus coexists with consumer surplus.

Being mutually beneficial doesn't mean it still isn't based on advantages. I have an advantage because I can grow Bananas for less resources than you, you have an advantage because you can make widgets for less resources than me. Mutually beneficial but still based on one's advantage over another.

I didn't mean taking advantage in a negative way, though the line where negative is is what I was wondering about.

[photon]

Originally Posted by Mr.Coffee

The difference in the 'operating at a loss' as a landlord and therefore justifying max profits when times are good, is that the principle of the landlord / tenant relationship is a home to live in. Given that shelter is a basic necessity, it does start to get outside the ethical grey area when all the rents are jacked up to unaffordable levels.

Well the rents aren't going to be jacked up to unaffordable levels in term of the city or community or whatever area, because if they were no one would rent (that being what unaffordable means).

So what we're talking about is unaffordable to an individual.

I don't see why any landlord is under any obligation to provide a place to live to someone out of their own pocket (lost revenue counts as out of pocket).

The responsibility for providing shelter belongs to the individual themselves. Or if society wants to do something to ensure everyone has shelter, then that's fine too.

Originally Posted by Mr.Coffee

but the criticism here and the key wording is gouging.

Which is a great word because it can mean many things the user wants it to to try and support their position.. but when a word means anything it means nothing.

What does gouging mean? I really can't understand what gouging means in terms of rent, since by definition whatever a place rents for is market value.

If a place rented for $1000 and they increase the rent to $1500 to match the rates at all the comparables in the area is that gouging?

I'd like to have a more concrete definition of what is and is not supposed to be acceptable for a landlord to charge.

Originally Posted by Mr.Coffee

Gouging is the problem... if it wasn't a basic necessity it may not be a problem but when housing is scarce, what people are now forced to barely afford their power bill just so they have a home to live in because you made a questionable investment decision and lost money years ago?

You can turn that around and say a landlord has to barely afford their own power bill and the home to live in because you made a questionable decision on living somewhere beyond your means years ago?

Neither are very reasonable, but it's not the landlord's responsibility to ensure everyone can live where ever they want, just like it's not the grocery store's responsibility to make sure everyone can eat whatever they want.

Originally Posted by Mr.Coffee

It is partially on the city to provide cheaper housing and not every fataing area of the city needs to be revitalized and fancy.

Or if the province wants to change the rules for landlords, that's fine. Lots of provinces have rules about how much the rent can be raised. That's how you deal with this kind of thing, define the parameters clearly, rather than using a vague term like gouging.

[photon]

Originally Posted by Harry Lime

Looking at this simply as a 'bottom line' investment can cause more issues, that will cost more money, over the long run. The human element should be taken into consideration, and value should be assigned to the quality of upkeep by the renter and the time and repair that falls to the landlord.

I think including the human element is still looking at it as a bottom line investment, you're just suggesting that landlords should be more aware of all the things that contribute to the bottom line just beyond the rent amount and mortgage payments, which is very true. I see it as landlords leaving stuff out of their balance sheets.

I have a place that's renting for quite a bit below market, but the tenant is outstanding and does a lot of little stuff for me for free, is easy to deal with, and doesn't have risk of damage. When I look at my bottom line, I take that into consideration.

[fulham]

About rent control, Alberta is by far the most liberal province when it comes to how they govern the tenant-landlord relationship. BC and Ont. Have very strict regulation in regards to rent increases, look at the rent in those markets, calgarians pay literally 65-70% what renters do for A and B quality housing in those markets.

[PsYcNeT]

Originally Posted by fulham

about rent control, alberta is by far the most liberaltarian province when it comes to how they govern the tenant-landlord relationship.

fyp

[Mathgod]

The way I see it, when there are more people who want/need homes to live in than there are available homes to live in, there are only two ways to deal with it - either you increase supply or you decrease demand. There is only so much that can be done to increase supply so that means the only thing left to do is decrease demand by raising rents to the equilibrium price and thereby squeezing some buyers out of the market. Cruel, yes, but that's the nature of the beast.

That said, I am opposed to the practice of essentially circumventing the eviction regulations by suddenly spiking rent rates in an abrupt fashion.

[The Yen Man]

Not sure why you'd be blaming the landlord for market supply. Nenshi has been on my lukewarm list lately. Not sure I'd vote for him in the next election. The person running his twitter being a real doosh doesn't really help either.

[Kjesse]

Originally Posted by opendoor

I'm surprised there's no type of rent control in Alberta. As far as I'm aware, pretty much every other province in the country has limits on how much you can raise an existing tenant's rent.

I don't understand this comment, in that, I don't think any province has rent control. I suppose you could argue Alberta has some laws which could be described as "rent control" but they only work to try to avoid surprises for tenants and don't really achieve that. And if other provinces have actual "rent control" I'd be shocked.

"Rent control" means a regulated rental market, enforced by a government appointed regulator. As pointed out before, limiting raising the rent for a tenant is not a rent control. Its at most a decelerator, which limits in some cases severe surprises. Despite these rules, the market is unregulated, as it should be.

This is a very complicated problem and I have no doubt Nenshi understands it well, better than I do. His comments about gouging were mere pandering. And there is no doubt his own development policies, and tax increases, have contributed to the problem, though that's an oversimplification and doesn't give due credit to what he's trying to do.

[Cleveland Steam Whistle]

Nenshi has an MBA, he should no better than anyone cost don't dictate prices, supply and demand does.

Pitiful play for votes by trying to single out a relatively small % of voters in landlords and making them villains. There are some bad landlords out there no doubt, but a very political move by Nenshi. Maybe he should figure out a better plan for affordable housing in this city if he's so concerned about people not being able to make rent.

[combustiblefuel]

In B.C we get 90 days notice. Its not unreasonable at all. It allows to do adjust your finances accordingly. I, the renter then can make sure I have enough set aside for rent when the changes are due to take place. In turn this also makes it easier for the landlord as it leads to less turnover.

Rent going up 30% to 40% percent yikes!!!! I couldn't Imagine having to deal with that with such short notice. I would really like to see Alberta adopt some of the same rules as B.C. Dealing with some landlords is a pain.



As It stands currently in B.C. is each year the Tenant board decides how much of a percentage landlord s can raise your rent within a 12 month period. In 2012 it was 4.3%, in 2013 it was 3.8% and 2014 it was 2.2 %( lowest in more than a decade). You can only raise the rent ONCE in a 12 month cycle. For 2015 the allowable rate is 2.5 % max. It is up to the landlord what % they would like to increase rent up to those amounts.

3 full months (90 days +) of notice to increase rent.

[combustiblefuel]

Nm

[combustiblefuel]

Originally Posted by Delgar

I don't understand this comment, in that, I don't think any province has rent control. I suppose you could argue Alberta has some laws which could be described as "rent control" but they only work to try to avoid surprises for tenants and don't really achieve that. And if other provinces have actual "rent control" I'd be shocked.

"Rent control" means a regulated rental market, enforced by a government appointed regulator. As pointed out before, limiting raising the rent for a tenant is not a rent control. Its at most a decelerator, which limits in some cases severe surprises. Despite these rules, the market is unregulated, as it should be.

This is a very complicated problem and I have no doubt Nenshi understands it well, better than I do. His comments about gouging were mere pandering. And there is no doubt his own development policies, and tax increases, have contributed to the problem, though that's an oversimplification and doesn't give due credit to what he's trying to do.

Technically the Residential Tenancy Branch in British Columbia is classified as rent controlled.

[opendoor]

Originally Posted by Delgar

I don't understand this comment, in that, I don't think any province has rent control. I suppose you could argue Alberta has some laws which could be described as "rent control" but they only work to try to avoid surprises for tenants and don't really achieve that. And if other provinces have actual "rent control" I'd be shocked.

"Rent control" means a regulated rental market, enforced by a government appointed regulator. As pointed out before, limiting raising the rent for a tenant is not a rent control. Its at most a decelerator, which limits in some cases severe surprises. Despite these rules, the market is unregulated, as it should be.

This is a very complicated problem and I have no doubt Nenshi understands it well, better than I do. His comments about gouging were mere pandering. And there is no doubt his own development policies, and tax increases, have contributed to the problem, though that's an oversimplification and doesn't give due credit to what he's trying to do.

It's really just semantics. The term "rent control" and "rent regulation" are often used interchangeably both colloquially and in academic writing. By the definition I'm familiar with, the government setting a maximum increase in rent that's allowable, as is the case in most of the country, is a form of rent control.

[SebC]

Originally Posted by Cleveland Steam Whistle

Nenshi has an MBA, he should no better than anyone cost don't dictate prices, supply and demand does.

Long-term supply is affected by cost.

[calgarywinning]

Originally Posted by The Ditch

I feel really bad for these people with extra properties to rent out, won't someone think of and stand up for those with multiple properties and extra space above and beyond what they need? What has this world come to.

Maybe these people sacrificed, worked a little harder to get ahead. Maybe they didn't indulge in a caffe latte and a fast food world. They lived lean so they could get ahead. Maybe they gave up things that you take for granted, so they could have a better future.

This used to be the premise of western civilization and now it is disdain for people that try to get ahead.

[Swarly]

Originally Posted by combustiblefuel

In B.C we get 90 days notice. Its not unreasonable at all. It allows to do adjust your finances accordingly. I, the renter then can make sure I have enough set aside for rent when the changes are due to take place. In turn this also makes it easier for the landlord as it leads to less turnover.

Rent going up 30% to 40% percent yikes!!!! I couldn't Imagine having to deal with that with such short notice. I would really like to see Alberta adopt some of the same rules as B.C. Dealing with some landlords is a pain.



As It stands currently in B.C. is each year the Tenant board decides how much of a percentage landlord s can raise your rent within a 12 month period. In 2012 it was 4.3%, in 2013 it was 3.8% and 2014 it was 2.2 %( lowest in more than a decade). You can only raise the rent ONCE in a 12 month cycle. For 2015 the allowable rate is 2.5 % max. It is up to the landlord what % they would like to increase rent up to those amounts.

3 full months (90 days +) of notice to increase rent.

is the allowable rate they are allowed to increase only affect current tenants or is that the max they can charge a new tenant also?

[driveway]

Originally Posted by Swarly

is the allowable rate they are allowed to increase only affect current tenants or is that the max they can charge a new tenant also?

Landlords are fee to raise rent as much as they want between tenants.

[Swarly]

Originally Posted by driveway

Landlords are fee to raise rent as much as they want between tenants.

wouldn't the solution around rent control then be for the landlords in BC to always have yearly leases then?