Press review of early February

In this first press review of February, we look at clause F in leases, which continues to make headlines, and the consultation process launched by the provincial government to modernize legislation.

By Corinne Laberge

CORPIQ defends clause F and opposes rent control

This La Presse article, entitled “Se buter à la clause F” (“Grappling with clause F”), reports on the case of a Candiac resident whose two-bedroom apartment in a new building was rented for $1,475 per month in July 2022 and will cost significantly more to rent this year. According to the article, “Starting in July, the tenant will have to pay $1,750 for the same apartment. This increase of almost 20% is well above those proposed last week by the Tribunal administratif du logement.”

The author goes on to explain what clause F is: “If you’re a tenant in a building that was built (and not renovated) less than five years ago, you have no choice but to accept the increase because the Tribunal administratif du logement does not protect you. [...] This is called clause F, named after the section of the lease where it appears.”

Marc-André Plante, Director of Public Affairs and Government Relations at CORPIQ, notes that “Although this rental clause is not new, we’ve heard a lot more about it in the last two or three years. The current economic situation means that it’s being applied more often and that rent increases are generally higher, sometimes to the great surprise of tenants.”

The article highlights other relevant points: “Inflation, rising prices of materials, successive interest rate hikes, labour shortages, wage increases, and delivery delays make rent forecasting more difficult, and increases to recoup investments more noticeable, even dramatic. Clause F is therefore a stabilization tool that is clearly not well understood, partly because it is not clearly explained when a lease is signed.”

In his column published in Les Affaires, Jean Sasseville also addressed clause F. Looking back at Bill 37, he quotes Jean-Marc Fournier, President and CEO of the Urban development institute of Quebec (UDI): “During the hearings on Bill 37 to reduce the exclusion period for new housing from five to three years, the UDI had mentioned that this could lead to higher rent increases in the first few years.”

When CORPIQ appeared before the parliamentary commission on the bill in spring, it “argued that the clause was key to stimulating new housing construction by reducing financial risk for developers,” says Mr. Plante. He adds that “given the critical housing shortage throughout Quebec, rethinking clause F seems more necessary than ever.” He believes that “elected officials and tenants need to better understand the rationale behind the clause. The financial model of rental housing construction is gradually becoming unsustainable and, as a result, projects are becoming increasingly less feasible. This is evidenced by the decline in housing starts expected for 2023.”

Radio-Canada also mentioned CORPIQ’s reaction to the “outbursts” of some members of the Coalition of Housing Committees and Tenants Associations of Quebec’s (RCLALQ) calling for rent control measures.

CORPQ finds it “deplorable” that demonstrators would attack a property owner. According to the Radio-Canada article, “Mr. Plante has said that the RCLALQ’s demands—that the Quebec government freeze rents until it passes legislation to control rent increases—do not make sense.”

CORPIQ is strongly opposed to rent control. According to Mr. Plante, “It is only by increasing the supply of available housing that the scarcity of housing will be reduced and, consequently, relieve the pressure on the market.”

Quebec launches a consultation process to modernize legislation

The announcement of the new mandate given to Chantal Jeannotte, MNA for Labelle, by France-Élaine Duranceau, Minister Responsible for Housing, has attracted media attention. On February 2, L’info de la Lièvre reported: “The Member for Labelle, Ms. Jeannotte, has been mandated to meet with various groups and experts with a stake in the rental market to draw up a list of recommendations that will help provide innovative solutions to the current rental housing problems.”

The article states that Ms. Jeannotte will table a report on the matter in the fall, after months of consultations. She told L’info de la Lièvre: “My role is to meet with tenants’ associations, landlords’ groups, project developers, academic experts, people from the Tribunal administratif du logement […] people who have made valuable proposals to help us correct shortcomings. The goal is to make rental housing affordable, which is a major issue across the country.”

The news was also reported by CFLO - La radio des Hautes-Laurentides. France-Élaine Duranceau told CFLO: “Chantale is the right person for this important job. I am confident that she will be able to listen to the recommendations and find solutions [...] to improve and promote affordability, especially for local low-income households, young families, workers, and students.”

In a press release, CORPIQ also said that it welcomes the decision, pointing out that its document “32 solutions to the housing crisis in Quebec,” produced in September, proposes “ways to modernize the legislation governing the work of the Tribunal administratif du logement to create an environment more conducive to the development of a more attractive offer for landlords and tenants alike.”

Mr. Plante said that “It is imperative that Quebec review the rules of the game to maintain interest in managing and investing in rental housing stock over the long term.”