R2H Letter to the WFP Editor - Nov. 2010

Letter to the Editor

Winnipeg Free Press – Online Edition, November 17, 2010.

New condo project highlights housing needs. Province’s rent control policy hampering development
I read with interest you article regarding the new condominium project in St. James. I agree with you wholeheartedly that Winnipeg is in short supply of housing options. The Right to Housing Coalition is very concerned about the extremely low vacancy rate in Winnipeg and the lack of development sufficient to meet the demand.

I would like to point out however that the assessment that Manitoba’s rent regulations are the main problem is inaccurate. While rent regulation in its pure form can act as a deterrent to development, Manitoba’s regulatory framework is a less restrictive form of rent control (also known as second-generation rent controls) that has little impact on new development. In fact new rental developments are exempt from rent regulations for a period of 20 years. Several other exemptions also exist to ensure that regulations do not deter development and rehabilitation. Developers who have been actively building rental units in Manitoba have not been deterred from building as a result of rent controls. For example, Broadstreet Properties Ltd. have built upward of 1000 new rental unit in Winnipeg in the past 10 years and they are on record as saying that rent controls have not been the major challenge for them.

While rent controls are often cited as the main problem for new development, a recent study by the University Of Calgary School Of Public Policy shows that many factors have contributed to a growing problem that is being experienced in urban centres across the country including both regulated and unregulated.

The U of C report actually includes second generation rent controls as one tool among many in their prescription for keeping rental housing affordable. It also includes several other measures that better respond to the main problems— increasing construction costs and unfavorable federal tax laws which were implemented in the late 1970’s and 1980s after which time we saw a sharp decline in the development of rental properties because it became less profitable.

The Right to Housing Coalition is a broad coalition of individuals and groups who are concerned with the lack of affordable housing options you describe. We have come to understand that the issue is a complicated one that will require a variety public policy measures to stimulate the development of supply. We encourage multiple interventions, including amendments to federal tax laws to make development profitable. I encourage you to look at some of the recent analysis of the very critical housing situation across our country. In doing so I believe you will come to a similar conclusion that there are much bigger obstacles to rental development than rent regulation and we might be better to focus our energy on
federal tax laws rather than the abolition of rent regulation, a solution that has not solved the problem in other jurisdictions.

Yours sincerely,

Clark Brownlee
Coordinator, Right to Housing Coalition, Manitoba

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