IRAC Rent Increase a Cruel Calculation
September 23, 2022
The PEI Fight for Affordable Housing (PEIFAH) calls the rent increase guidelines for 2023 published by IRAC on Wednesday a cruel calculation whereby those in our communities who are already the hardest hit by inflation will also cover the increased costs of landlords.
Daniel Cousins, a PEIFAH member says “We know that landlords do well in inflationary periods because their buildings continue to increase in value. It is unacceptable that tenants, many of whom live cheque to cheque, are being expected to absorb their landlord’s costs as well as their own.”
The PEIFAH predicts that these high guidelines – 5.2% for buildings which are not heated by furnace oil or where heat is not included in the rent and 10.8% for buildings heated with furnace oil – will further threaten tenants’ homes and the stability of communities. It has asked the Minister of Social Development and Housing to keep the 2.5% cap on the rent increase guideline for the time being.
“We already have more homeless people in the province than ever before” says Leo Cheverie, a tenant living in Charlottetown. “IRAC appears to be acting purely in the interests of investors and landlords and not thinking about how the cost of inflation might be distributed more fairly. These guidelines will push more people into homelessness and cause terrible hardship.”
It is common knowledge that the rent increase guideline set by IRAC becomes a minimum which most landlords will automatically charge their tenants. An additional problem for tenants is that the tenant’s right to challenge a guideline, or below-the-guideline, rent increase which is present in the current Rental of Residential Property Act has been left out of the draft Residential Tenancy Act which could be introduced into the legislature this Fall.
Last month 2021 Stats Canada data showed that 35% of people of working age on PEI earned less than $30,000 annually before taxes are deducted. For these individuals, if they are living alone, an affordable rent by federal criteria would be $793. By provincial criteria an affordable rent would be $661.35. Commonly rents for vacant one-bedroom apartments are double these levels and they will only increase if IRAC’s proposed guidelines are adopted.
Connor Kelly, Tenant Network Coordinator with the PEIFAH, who has assisted hundreds of tenants from across the Island over the past two years says “ Many tenants are essential workers who got us through the pandemic as nurses, store clerks, construction workers, support workers for people with challenges, cleaners and childcare workers. We are driving them out of PEI with these kinds of policies. Rent controls need to be about affordability rather than investment protection.”