2016 Rent Fixing Criteria: CORPIQ reveals its forecast

The Régie du Logement of Quebec will publish late January their rent adjustment scenarios that are below the cost of living, therefore, disconnected from the reality of the aging rental market.

These calculations anticipate an average rate of 0.5% for rent that excludes heat and property tax variations, 0.9% for rent that includes electricity, 0.4% for rent with natural gas heating and -1.8% for rent with oil heating, of which the price has experienced a drop of 25% in one year.

Owners can of course ask for a higher rent raise from the tenant. CORPIQ actually encourages them to do so if the rent is inferior to its market value. The Régie du Logement only controls rents submitted to its court. In addition, each building has its own operating ratios. An applicable rent increase can therefore be far removed from the different scenarios of the Régie du Logement and still be fully justified in court.CORPIQ's public affairs director, Hans Brouillette, explains that «for years, the adjustment net revenue granted for landlords has been insignificant. This is the most important criterion and the Quebec government only grants a 0.6% rate while the 2015 inflation is higher. It destroys value».

The Corporation also denounces the rent increase granted for major renovation work performed in a dwelling or on a building. For 2016, it should be 2.5%, a record low in the 35 year history of the Régie du Logement. Mr. Brouillette resumed by saying that «for every $1000 of work, the landlord is only granted a meager $2.08 more in monthly rent. At this rate, it will take 40 years to recover the full amount, compared to 8 years in the 1980s. Worse, if the owner has to borrow money, he will not even be able to cover the interest on the loan! »CORPIQ is requesting an intervention from the Minister

CORPIQ dismissed the Régie du Logement's obstinate refusal to include municipal and school tax increases in its scenarios year after year. For example, 5% tax increases could double the released rent adjustment rates. By deliberately ignoring them, the Régie du Logement is deceiving the public and unnecessarily generating conflicts between landlords and tenants during the lease renewal period. CORPIQ called for the revision of rent fixing criteria in a letter sent to several ministers. Also, CORPIQ is asking Minister Pierre Moreau in particular to push the Régie du Logement to publish more realistic scenarios that no longer omit an expense item as important as property taxes or to abstain completely from doing so.