'We were ignored,' housing group says after IRAC announces allowable rent increase
'Tenants, want zero to a very modest increase. And landlords typically ask for between two and five per cent'
Rents will likely be going up for some Islanders in the new year.
The Island Regulatory and Appeals Commission has set the maximum allowable rent increase at 1.3 per cent effective Jan. 1, it said in a release Monday.
That is a decrease from 2019, when the maximum allowable rent increase ranged from 1.5 per cent to two per cent.
The 2020 rent increase can be applied to all heated and unheated rental units as well as to mobile home sites that are located in a mobile home park.
The amount of the allowable rent increase is primarily based on the 2019 Consumer Price Index for P.E.I., the release said. IRAC also considers the cost of heating fuel — it's down slightly— as well as electricity, water and sewer, insurance, property taxes and Waste Watch collection.
'We were ignored'
Daniel Cousins, with the group P.E.I. Fight for Affordable Housing, said any rent increase is disheartening, especially when considering the housing crisis in Charlottetown.
He said the group gave input to IRAC suggesting it move from a yearly increase to a bi-yearly increase.
It's somewhat of a balancing act between public pressure to freeze rents and landlord pressure to raise rents.— Jennifer Perry, IRAC
"So, we get an increase that's maybe two per cent every two years … because every year they add up very quickly," he said.
"Obviously we were ignored."
Cousins said the group would like to see a rental registry created for tenants to compare rent increases.
"There isn't really a way to police this at the moment. That's why a rental registry is beneficial," he said.
'A very fair number'
The increase was approved by the commission, an arm's-length tribunal chaired by former lawyer Scott MacKenzie. It heard 52 submissions on the allowable rent increase from tenants, landlords and members of the public — up from 13 the previous year — 34 were from tenants, and 18 from landlords.
"The messaging isn't that different from other years. Folks, mainly tenants, want zero to a very modest increase. And landlords typically ask for between two and five per cent because costs are going up for landlords," said Jennifer Perry, IRAC's director of residential rental property.
"CPI was heavily weighted this year," she added. "CPI was 1.3 for Prince Edward Island across the board and that's what we, or the commission, decided on for their rate increase for 2020."
Building costs for landlords have also gone up by 4.5 to five per cent, Perry said. Lower turnover because of low vacancy rates on P.E.I. does mean some cleaning and maintenance costs such as painting are reduced for landlords.
"I think landlords deserve a modest increase," Perry said. "It's somewhat of a balancing act between public pressure to freeze rents and landlord pressure to raise rents two to five per cent ... I think 1.3 per cent is a very fair number."
Under the Rental of Residential Property Act, landlords are permitted to raise the rent once every 12 months and are required to provide tenants with three months' written notice before the rent increase can take effect.
Landlords seeking rent increases greater than the allowable amount must apply to the Office of the Director of Residential Rental Property and provide the required information.