Press review of late June

In this press review, we focus on the mayors' demand for a rent registry, as well as the housing crisis and its context in the province of Quebec.

By Corinne Laberge

A rent registry? CORPIQ says no!

As reported by the organization Vivre en Ville on June 28, "In an open letter released today, more than a dozen Quebec mayors call on the Quebec government to adopt a public, mandatory and universal rent registry."

"The signatories point out that the housing crisis in Quebec is having devastating consequences for society as a whole (...) that Bill 31, which would modify the assignment of leases, could result in a further increase in rents in Quebec. Finally, they also point out that the application of Clause G does not work," it says.

The La Presse article "La mairesse de Longueuil n'a pas signé la lettre ouverte" refers to the absence of Catherine Fournier among the signatories. "Ms. Fournier did not sign the open letter because she was unable to obtain conclusive data on the effectiveness of the proposed measure. In this context, she preferred to abstain," explained her press attaché in a text message.       

Although CORPIQ "welcomes the desire of the mayors of several Quebec cities to contribute to the debate on the housing crisis", it is unequivocal: "controlling rental prices through registration would have negative repercussions for tenants. This approach would reduce supply through a sharp increase in repossessions, facilitate real estate speculation, mass evictions of tenants and the total disinterest of rental landlords in renovating the current rental stock", she pleads in this press release.

"At a time when massive housing construction is needed throughout Quebec, the creation of a rent registry is in no way a sustainable solution to the housing crisis," points out Public Affairs Director Marc-André Plante. "On the contrary, a registry would slow down everyone's efforts to rebalance supply and demand. What's more, it will contribute to poor relations between landlords and tenants."

CORPIQ believes that the intention highlights the ineffectiveness of Section G of the rental lease. Consequently, it "advocates modernizing its application, which is a major constraint in the rental housing system", while a Léger Marketing survey reveals that 80% of tenants do not seem to know the basics of Section G. "(...) the obligation to maintain a similar price to the new tenant in the law has only perverse effects, particularly for maintaining and renovating the rental stock in Quebec. The costs of managing rental stock and the rules of the Tribunal administratif du logement no longer hold water," insists Mr. Plante. The legislator must review the application of Section G of the rental lease. CORPIQ will stress the importance of withdrawing it in several respects. That's why we need a concerted, comprehensive plan for action on housing.

The housing crisis and the Quebec context

This article by Jean Sasseville in Les Affaires, "La crise du logement n'est pas encore au sommet", begins as follows: "The measures in Bill 31 are steps in the right direction. But it's imperative to address the real challenge: the housing shortage. Are the cities and Quebec City going to agree on a course and reach a peak in construction quantity? he asks. Building takes time, and everyone must contribute, both for-profit and not-for-profit developers. We need to build all kinds of housing, but especially for the most vulnerable. (...) Building more expensive housing indirectly helps the overall market."

Further on, he writes in the subtitles that "Without the Section F, construction would plummet", adding that "we must avoid any measure that would further discourage housing starts". In addition, given the aging rental housing stock, with three out of four units built at least 40 years ago, "We need to encourage landlords to do a better job of restoring apartments," argues Sasseville. "The formula used to adjust rent when the owner does major work gives a poor return on their investment. It needs to be improved." 

As for the summit called for by certain cities and local players, "it's not an end in itself, but it can be very beneficial if the cities show up in a spirit of collaboration". However, "Summit or no summit, the crisis will progress", says the author. "When interest rates fall, housing starts will increase, but not to a sufficient level. Cities need to update their zoning bylaws to encourage more density, reduce project approval times as well as reduce their fees, taxes and royalties."

"Cities need a Sherpa," states the final subtitle. "The housing shortage is driving up prices. The main solution is to build," reminds the columnist. "Cities that want to climb up the left side (by magnifying tenants' rights to the detriment of landlords' rights, by proposing a rent registry, by fantasizing about the Vienna approach, etc.) are not taking the easiest path and are not following the route proposed by Quebec City. (...) The Minister of Housing is competent. She is focused on identifying the real problems and implementing the most pragmatic solutions."

This June 23 article from La Presse deals with housing affordability. "Contrary to other major cities in the country, Montreal and Quebec City have a significant stock of affordable private housing for low-income households, according to a new indicator prepared by the Canada Mortgage and Housing Corporation (CMHC)," we learn.

Thus, "In the inventory of private dwellings located in buildings offering three or more rental units in the Montreal region, 23% of units are offered at a rent of less than $750 per month, which corresponds to less than 30% of pre-tax income for the poorest households".

CMHC Deputy Chief Economist Kevin Hughes is quoted as saying: "The first indicator measures the share of housing that is affordable to tenants in the lowest income quintile [20%]. For a dwelling to be considered affordable, its rent must be less than 30% of the household's before-tax income".

In Quebec City, it is reported that a quarter of privately-owned units fall into this category. "In contrast, in Toronto and Ottawa, it's close to 0%; in Vancouver, 1%; in Gatineau, 8%."

Precisely, "The 23% proportion in the Montreal census metropolitan area corresponds to 143,400 dwellings with a monthly rent not exceeding $749", which excludes HLMs, non-profit housing and subsidized households.

In conclusion, there are three reasons why rental housing in Montreal and Quebec City stands out from the rest of Canada: "it's deeper, it's older, and it's made up largely of low-density wood and brick units, which are generally of lower quality and therefore less expensive, compared to the steel and concrete high-rise housing generally found elsewhere in the country", observes Mr. Hughes.