Time To Oust The Tories: Rent Control Not Coming

[Fuzzy McGillicuddy]

I agree that rent control is a short-sighted measure. It would do nothing to increase the supply of rental accomodations. The real issue is the lack of rental units in Calgary.

Rent control is a gun to the head of a landlord. It's government dictating what price a business owner can set. It's another form of price control.

Calgary is becoming an expensive place to live. It's not just renters that are feeling the pinch. Should home-buyers demand price controls because they can't afford an entry-level home? If you can't afford to live in Calgary then move somewhere else. It's that simple. If enough people move away, the market will eventually correct itself.

[Bobblehead]

Originally Posted by Dion

The problem with that solution is the NIMBY crowd would cry foul and complain that these suites would drive down their property values. Then there's the parking or lack of problem. Homeowners coming home to find there's no place to park in front of their home because of the 4 tenants in the suite next door.

Wasn't there already a hue and cry about that? A neighbourhood saying their area wasn't equiped to handle the additional parking/traffic issues associated with the additional population from basement suites.

[Fuzzy McGillicuddy]

Originally Posted by Bobblehead

Wasn't there already a hue and cry about that? A neighbourhood saying their area wasn't equiped to handle the additional parking/traffic issues associated with the additional population from basement suites.

The city backed down on this issue and will allow secondary suites only in "new" communities.

If the city was to allow secondary suites, then homeowners should be responsible for ensuring there is adequate parking. Newer neighborhoods are less likely to accomodate traffic because lots are smaller.

[Dion]

Originally Posted by Bobblehead

Wasn't there already a hue and cry about that? A neighbourhood saying their area wasn't equiped to handle the additional parking/traffic issues associated with the additional population from basement suites.

I believe there was IIRC. I used to live in Queensland and there were alot of illegal suites in that area. You could tell by the number of vehicles on the street. My former neighbour had one of those suites and parking was a problem from time to time. Luckily I had a garage to park my car.

[Cube Inmate]

Rent control is not an option, as far as I'm concerned...as others have said, it's unfair to owners and won't do anything to increase available housing--in fact, the overall effect would be the opposite. So, say we go to subsidies for low income renters....can that be done fairly? For two AISH recipients in similar circumstances, would it be fair to subsidize the rent of one who chooses to live in Calgary's beltline while ignoring another who chooses to live in, e.g., Nanton? One chooses to live where he can afford to live, and the other expects a handout to live where he wants to...? Of course it's not fair.

I wonder how much of people's concern for the low-income crowd is related to altruism, and how much is related to selfish interest in their own quality of life?

I'll agree that Calgary's quality of life is dropping slightly due to the unavailablity of unskilled labourers...it sucks to go to Wendy's and find it closed due to staffing problems. However, this is something that will correct itself, one way or another. It may take some time, but that's the way markets work.

[photon]

Apparently there was an all night debate over this. The Liberals keep adding amendments to put in rent controls.. They say "temporary", but I don't trust governments to do anything temporary.

The radio had a good point last night. If we need rent controls, what about all the scummy people that bought houses a few years ago, rode up the prices and are selling them for huge profits now! The prices of houses have doubled in the past few years!!

That's outrageous, we need to impose resale controls to limit the increase in housing prices. Limit it to inflation + 2% per year, that way new people coming to Calgary will be able to find a place to live.

[blankall]

Originally Posted by photon

Apparently there was an all night debate over this. The Liberals keep adding amendments to put in rent controls.. They say "temporary", but I don't trust governments to do anything temporary.

The radio had a good point last night. If we need rent controls, what about all the scummy people that bought houses a few years ago, rode up the prices and are selling them for huge profits now! The prices of houses have doubled in the past few years!!

That's outrageous, we need to impose resale controls to limit the increase in housing prices. Limit it to inflation + 2% per year, that way new people coming to Calgary will be able to find a place to live.

Limiting resale to inflation +2% is a little ridiculous. That means nobody can ever make a profit on selling a place ever. You have to keep in mind there is a cost to maintaining a house whether it be strata fees or just general upkeep. There is a problem attracting trade workers to Calgary now, see what happens when you do this.

Also, in Calgary there are affordable homes, just not in the downtown core. In every other city in the world prices in downtown will always be more than in the burbs. That's just the way it is. There is limited space downtown and therefore, the space will go to the highest bidder. Supply and demand.

Housing prices have gotten out of control in Calgary, but there are still a number of 2 and 3 bedroom town houses in Calgary avaible for under 250. I dont think we are at the state where we have to put those kind of controls on.

[photon]

Heh, sorry I guess I didn't insert enough sarcasm, or use the sarcasm tag in my post

Was just trying to show how dumb the rent control thing is.

[blankall]

Originally Posted by photon

Heh, sorry I guess I didn't insert enough sarcasm, or use the sarcasm tag in my post

Was just trying to show how dumb the rent control thing is.

Right... damn internet.

[BlackArcher101]

Originally Posted by photon

The radio had a good point last night. If we need rent controls, what about all the scummy people that bought houses a few years ago, rode up the prices and are selling them for huge profits now! The prices of houses have doubled in the past few years!!

Explains why there's an increase of vacancy of the houses on the market. I shake my fist at them and fart in their general direction.

[Incinerator]

Originally Posted by BlackArcher101

Explains why there's an increase of vacancy of the houses on the market. I shake my fist at them and fart in their general direction.

Because not everyone wants to be a landlord, and there are more people buying before selling nowadays if they found a place they liked. Because chances are anything priced right & looks nice will be snapped up in a hurry and they don't want to take that chance, so once they bought they leave their previous place vacant during the listing period. Plus it's easier to let people see your place if they don't have to work around your schedule.

Of course there's also the speculators who buy pre-constructed new condos, but those are becoming scarce as a lot of builders have caught on to this and are trying to curb it by asking for the downpayment early and inserting pre-assignment ban clauses into the purchase contracts. As a result the 30% vacancy rate you heard about in January has greatly diminished since.

[Dion]

Losing sleep over Alberta's Rental Crisis.

http://www.calgarysun.com/cgi-bin/pu...cles&s=comment

The government ignored a recommendation by its own task force to impose temporary, two-year rent guidelines that would keep increases to inflation plus 2%. Owners could apply for exemption from the guidelines to recover their actual costs for utilities, taxes and capital improvements.

What’s more startling is that the government ignored another task force recommendation to offer incentives to builders to construct more affordable rental dwellings.

During the all-night debate, government whip Frank Oberle claimed rent controls would stifle construction of new housing, He ignores the fact that, even without controls, developers have started no rental-specific properties for the general public in Calgary for years. Some have been built for seniors and the handicapped, but none for lower-income workers.

[Azure]

So add more apartments to the equation. Shouldn't that equal out the market?

Supply and demand.

[ken0042]

Originally Posted by photon

Heh, sorry I guess I didn't insert enough sarcasm, or use the sarcasm tag in my post

Was just trying to show how dumb the rent control thing is.

Actually I think you made a point in favour of rent control. Let me explain:

I bought my house in 2004 for 190K. Today its worth about 360K. So an increase of 90% over 2.5 years; or 36% per year. Why not put rent control of 36% in place? Obviously with the condition that you have the right to increase rent further with justification.

As a landlord, could you not live with 36% per year as the max? That way too- the people who are now complaining that their rent went up 100-200% will get some relief. The only people who would lose in this situation are the landlords who really are just gouging their tenants.

[photon]

Originally Posted by ken0042

Actually I think you made a point in favour of rent control. Let me explain:

I bought my house in 2004 for 190K. Today its worth about 360K. So an increase of 90% over 2.5 years; or 36% per year. Why not put rent control of 36% in place? Obviously with the condition that you have the right to increase rent further with justification.

As a landlord, could you not live with 36% per year as the max? That way too- the people who are now complaining that their rent went up 100-200% will get some relief. The only people who would lose in this situation are the landlords who really are just gouging their tenants.

That's not really an argument for rent controls, just an example of one way to do it that might be more acceptable, to landlords anyway. The people for rent controls would probably throw a fit

That makes the assumption that rents are somehow related to current market values, which it really isn't. I guess it might be in that if you purchase a new place at current market values you're going to set rents appropriately, but that doesn't always work either.

I have a specific situation myself even. I recently purchased a place where due to varying circumstances rents were VERY low, well below market value for the area. The owner had purchased long ago so was making money even at those rates. I however would be losing money hand over fist at that rate, and so I had to raise rents when I purchased it. In most of the cases, the increase was 40-50%. I only had two people move out, one person move out because they couldn't afford it and another because it made more sense for them to own at that price, the rest said "I knew it was coming, we've had such cheap rents for so long". They knew I was only going to market value.

That's the other part of rent control, it assumes the market is effecient (that rents are at market value, etc), but like my example it isn't, and rent controls don't take that into account. Unless there was a person involved to apply to to justify exceptional cases (like you say), but then you have to hire people to do it, etc.

[Tron_fdc]

So here's my story.

I recently purchased a 3 bedroom house (at about 10% below market value at the time) in the hopes of renting it out, holding on to it for a year or two, and flipping it. I renovated the house, cleaned everything up, and bascally put in an ad that rents it out at my cost (before renos). So far I've had lots of people look at it, but no one actually go ahead with it.

As it sits, I can turn around and sell it right now, and make about a 20-30% profit on my initial investment. That being said, guess what I'm going to do????

It's just one more house off the market, compounding the crunch.

My point being is that IMO rental rates are still below actual market value (for the exact reasons Photon just mentioned). So until either the housing market levels off, or people start making more money to pay the escalating rates, it will mak more snse for guys like me to buy and flip. If you can't afford to buy, how are you going to afford to pay up to $2k in rent?

[Tron_fdc]

So yeah, if anyone needs a house to rent it's on the market for another week, then I'm going to sell it.

http://www.rentfaster.ca/listingview...istingID=12692

[photon]

Rents are definately low compared to the cost to acquire a property at this time.. It's still nearly impossible to buy a place with 25% down on a 25 year mortgage and rent it without losing a lot. But that's part of the risk a landlord takes on.

[ken0042]

I suppose my arguement to you Tron would be this: how does the concept of rent control affect you one way or the other? Unless I'm missing something, rent control allows a tenant to be protected from increases in the rent of their current home. If the tenant moves out; or in this case there is no tenant; the landlord is allowed to list the place for whatever the heck they want to.

[photon]

In this case it doesn't really.. but it does affect the rental market since the house is now off the market and vacancy rates go even lower. Plus it could indirectly affect him if rents are being artifically supressed, he can't charge the rent he needs to break even since "market value" is far below his costs.