Rent hikes highest this year
La Presse is predicting a record 6% rent hike when the guideline increase is announced next week. A bar graph shows the leap from 1.2% in 2020 to 4% last year.
La Presse is predicting a record 6% rent hike when the guideline increase is announced next week. A bar graph shows the leap from 1.2% in 2020 to 4% last year.
DeWolf 10:53 on 2025-01-17 Permalink
That is insane. Last year’s 4% increase was based on large property tax hikes and high inflation. But inflation has dropped and at least in Montreal, tax hikes were minimal. What could possibly justify 6%?
jeather 10:57 on 2025-01-17 Permalink
Landlords want more money.
Kate 11:03 on 2025-01-17 Permalink
I think it’s an Overton window type of scenario. Everyone who has an ongoing lease will have seen how their rent compares to rent for a new place, and may be prepared to give the landlord a bit more cash now rather than tempt them to an eviction. It can even be subconscious.
bob 12:14 on 2025-01-17 Permalink
No, it is the government permitting landlords to rig the market in the middle of an artificially produced housing crisis. Pure rich boy cash grab.
Blork 12:43 on 2025-01-17 Permalink
At the risk of sounding like some “pro landlord” slob, it could also be related to the issue that in a housing crisis we need more rental units, but if rents are kept too low there is no incentive to create new rental units or to not sell off existing ones as condos and co-ops. So by making the prospect of “landlording” somewhat less unappealing, it might encourage more landlording.
Or not. What do I know? I’m not a landlord.
jeather 13:38 on 2025-01-17 Permalink
A new building is not limited in rent increases for the first 5 years, so you’ve got quite a while to set rental prices high enough before you need to follow the guidelines.
CE 14:11 on 2025-01-17 Permalink
There’s also the fact that buildings cost quite a bit more than they did even 5 years ago. There’s a certain expectation that rental income is going to cover X amount of the mortgage. Eventually, the market rate (ie, the amount charged for an apartment in a new building) and the amount charged on an established lease is not going to line up at all. It would all work itself out if wages increased at the same rate as cost of living but that’s not happening for most people.
I increasingly feel like our current rent prices are simply going back to “normal.” We look back at the 70s to early 2000s as a time when rents were affordable and that’s how it’s supposed to be. In fact, rents have always been very expensive and working people have always had trouble paying them. Just look back at the literature of the time, Bonheur D’occasion is mostly a book about trying to find an affordable apartment, Many of Michel Tremblay’s books detail how families crushed as many people into apartments as possible to be able to pay the rent. I don’t see a path to how we’re going to go back to post-industrialization, post-referundum, post-suburbanization rental prices in the city again, at least not in the near future.
Kate 14:37 on 2025-01-17 Permalink
CE: but is there a normal? One of the best things the old PQ did for Quebec was to establish the old Régie du logement. (Well, that and pass laws and call referendums that persuaded people to leave Quebec, thus lowering property values for a generation.) They passed the law that banned deposits on apartments: I can only vaguely remember older relatives talking about a time when getting apartments involved having to pay key money to get access. This kind of thing was made illegal and it was all good.
This whole thing is adjustable by policy, as bob suggests above. There are benefits to capitalism in having the working class worried and scared. We’re living them.
Ian 15:02 on 2025-01-17 Permalink
Landlords and rent-seeking are nothing new. Just look at the Monopoly board game … and know that it was in fact stolen by Parker Brothers from Georgists.
What are Georgists?
“Georgism is concerned with the distribution of economic rent caused by land ownership, natural monopolies, pollution rights, and control of the commons, including title of ownership for natural resources and other contrived privileges (e.g., intellectual property). Any natural resource that is inherently limited in supply can generate economic rent, but the classical and most significant example of land monopoly involves the extraction of common ground rent from valuable urban locations. Georgists argue that taxing economic rent is efficient, fair, and equitable. The main Georgist policy recommendation is a tax assessed on land value, arguing that revenues from a land value tax (LVT) can be used to reduce or eliminate existing taxes (such as on income, trade, or purchases) that are unfair and inefficient. Some Georgists also advocate for the return of surplus public revenue to the people by means of a basic income or citizen’s dividend.”
https://en.wikipedia.org/wiki/Georgism
In my opinion, shared by some others, rent-seeking behaviour like subscriptions replacing purchases, landlords engaging in price-fixing, and property speculation in all forms are the core basis of many of the economic evils of modern western society.
Bert 15:16 on 2025-01-17 Permalink
“Where does the assumption come from that businesses must sell a product at a set price because you want them to?”
Real estate and construction costs rise as the market dictates. Rents, who depend on real estate and construction costs rise by a relation to inflation.
CE 15:36 on 2025-01-17 Permalink
@Kate: I don’t think there’s ever a “normal” in the real estate market, it fluctuates in weird ways but I’d say that rents have been “unaffordable” for a longer time than they’ve been “affordable” so unaffordable seems to be the natural (albeit undesirable for much of the population) state of things.
Ian 09:41 on 2025-01-18 Permalink
Gender equality is “historically abnormal”. Most children living to adulthood is “historically abnormal”. Having most of your teeth past 30 years old is “historically abnormal”.
You can see where U’m going with this, I hope.
Chris 12:26 on 2025-01-18 Permalink
Bert, that exact quote from the other thread came to my mind too!
I can’t imagine any mom & pop wanting to be a landlord these days, so many constraints, so much risk, so much hassle. People will just put their money elsewhere instead of being a landlord. So we’ll end up with only corporate landlords, like Blackrock. Be careful what you wish for, as they say.
Kate 19:11 on 2025-01-18 Permalink
Chris, my landlords are a mom and pop, and by virtue of being careful who they rent to, and looking after the building (maintenance, not radical renovations), they seem to be doing OK. As far as I know, they own one other building, a few blocks away, where they live, so they’re not slumlords. There must be a lot of people like this, around here.
Chris 20:26 on 2025-01-18 Permalink
Kate, how long have they been doing it? Ask them it they would start today.
Ian 15:17 on 2025-01-20 Permalink
Didn’t take long to make the jump from “imagine” to asserting your theory.