“Rent Control: Why It Doesn’t Work”
The following information was contained in an email completed by Deloitte LP and posted on the CRRA website. It was sent to MLA’s and Ministers by Landlords in response to the Private Members Bill. Almost 1,000 emails were sent by Alberta residential landlords.
“Bill 202 will create a committee to explore rent regulation, security deposits, and other matters of importance to landlords and tenants.
It has potential to move the government toward policy that could have damaging impacts on the housing market, on renters, and the entire rental industry.
The majority of landlords own and manage between one and 10 units. They are hard-working voters whose reasons for investing most often include saving for retirement, and helping their children get ahead.
Many of the largest landlords employ thousands of Albertans and provide a home for hundreds of thousands more. These large landlords have investors that include pension funds, as well as individuals who invest for retirement.
Any move to restrict rental rates or eliminate/reduce security deposits will harm the rental industry now and far into the future.
We know that housing markets that have been subjected to rent controls or other forms of rent restriction, or elimination of security deposits, do harm to the rental industry. We also know these policies hurt renters. These policies have been shown over and over to actually reduce the availability of safe affordable housing, thereby working against the people they are intended to help.
Alberta is in the midst of its worst recession in decades. Vacancy rates are very high and many landlords have reduced their rents and offered other incentives to attract and keep tenants.
Historical data shows rents are in line with the Consumer Price Index (CPI). As with Alberta’s economy, there are booms and busts, but ultimately it evens out. The artificial reduction in the price of one important commodity (such as rents) in a large integrated market economy would be expected to have multiple negative ripple effects.
Landlords only collect what the market will allow.
THE PROVINCIAL GOVERNMENT DOES NOT NEED TO “FIX” A SYSTEM THAT IS WORKING AS IT’S SUPPOSED TO FOR THE VAST MAJORITY OF PEOPLE.
Security deposits are an essential part of the landlord/tenant agreement. They are typically equal to one month’s rent, though many landlords have reduced or eliminated them during the economic downturn.
Most tenants treat rental accommodation appropriately, but there are exceptions. In 2015, a sampling of 145 landlords reported $2.3 million in damage. It is also often true that tenants who cause damage often skip out on the last month’s rent.
Security deposits don’t cover these losses, but they help. Otherwise that money comes out of the pockets of landlords.
We encourage you to pursue policies that would help address the issue of affordability, most notably a greater focus on direct housing subsidies to renters who need assistance.
Please reject rental and security deposit policies that will hurt an industry that is already struggling, and make little or no short-or long-term difference to people who need help affording a safe place to call home.”
