Setting the Record Straight on the Housing Situation

Heated debates have taken over the past few days as politicians and media reacted to Hans Brouillette’s (Director of Public Affairs) open letter entitled "Inventer une crise du logement pour se faire réélire".

Published on April 29 on the CORPIQ website, and then relayed the following day in LaPresse, Journal de Montréal, and Journal de Québec, this opinion letter rectified facts about a so-called housing crisis that is actually being propagated by certain political parties for partisan purposes.

At the same time, accused of being out of touch with reality by the opposition parties, Premier Legault was criticized for explaining that $500 rents are a reality for students, not for families. Montreal Mayor Valérie Plante joined the controversy, outraged that her housing crisis was not recognized by CORPIQ through a series of tweets on Twitter in which several landlords let her know that the situation is not so easy for them.^[1] She cited the need for affordability for Montreal's middle class while still seeking more control through provincial government intervention. FRAPRU and other activists are demanding the construction of more social housing, protesting against the "madness" of rent prices ^[2].

Mr. Brouillette spoke with Mario Dumont on the LCN network where results of a survey of landlords conducted by CORPIQ from April 21 to 28 were discussed ^[3]. These numbers show that there are currently approximately 5% of vacant dwellings and close to 10% of dwellings that will become available on July 1^st. Labor and material costs have certainly contributed to a rise in rents and a redrawing of landlords' profitability goals, but all in all, rental costs are reasonable and affordable.

With regard to cases of "renovictions", a word that Mr. Brouillette deplores since the Civil Code of Quebec does not provide for an eviction in the case of renovations and this term implies the opposite. He goes on to say that "we are seeing the consequences of a problem that is upstream. For years...landlords have been denied the rent increases necessary to make renovations". Indeed, a landlord can "only charge $1.92 in rent increases this year for every $1,000 of work done last year. Simply put, it would take nearly 43 years to pay off the cost of the renovation, which often exceeds the life of what was renovated".

Let’s also note the intervention of Jean-Philippe Meloche, professor at the École d'urbanisme et d'architecture de paysage à l'Université de Montréal, who gave an interview to Radio-Canada's Télé-Journal. He explained that there are no concrete criteria justifying an alarm about a housing crisis^[4]. One of the solutions proposed is a rent freeze, but as Mr. Meloche explained, this will only exacerbate the problem by scaring off investors and, at the same time, slowing down the construction of new housing to meet the demand.

In the same vein, Joseph Facal has written an article that also challenges the notion of a housing crisis^[5]. In his article entitled 'Une fausse solution à la crise du logement", the rent control is pointed as the source of the imbalance between the pool of tenants seeking housing, their financial capabilities, and the ability of landlords to make their units profitable. Thus, he asserts that "rent control saps the housing market by removing the incentive for the private sector to build new rental units at reasonable prices. The overbidding we are witnessing is related to the scarcity of affordable housing, which is the consequence of the unwillingness of landlords to build more units because they would not be profitable, forcing them to maximize the profitability of the units already available, which keeps rental prices high.