One of P.E.I.’s biggest landlords has abandoned efforts to hike rents for hundreds. So why aren’t tenants celebrating?
CHARLOTTETOWN, P.E.I. — Vincent Brazil took his landlord, one of many greatest property-owning firms within the nation, earlier than the province’s rental workplace and received.
His landlord, the Canadian Condominium Properties REIT (CAPREIT), not too long ago dropped its software earlier than the Island Regulatory and Appeals Fee (IRAC) to boost his lease, together with 55 different tenants at his house constructing on River Ridge Drive in Charlottetown, by 12 per cent.
Brazil, who works in IT assist for a federal division, says his monetary scenario is probably going safer than lots of his neighbours, lots of whom are retirees. However he mentioned CAPREIT’s will increase would have damage.
“For me, it is simply very irritating. I lastly bought to some extent the place I used to be earning money and beginning to financial institution it,” Brazil mentioned. “And now landlords need to take all the remainder of my cash that I am making. Like, this enhance would have taken in all probability two years’ value of wage will increase. That is not acceptable, particularly not in these occasions.”
SaltWire has spoken to different tenants in CAPREIT-owned buildings in Summerside who’ve additionally acquired discover that CAPREIT has deserted its makes an attempt to boost rents by as a lot as 20 per cent.
CAPREIT utilized for the better than allowable will increase for greater than 500 P.E.I. tenants in April. IRAC has confirmed that quite a lot of the purposes have been dropped however has not recognized what number of.
CAPREIT is likely one of the largest rental property homeowners in Canada. The corporate owns 66,000 housing models throughout Canada, together with 637 in P.E.I.
P.E.I. tenancy legal guidelines permit landlords to use for lease will increase above lease management quantities, which had been set at zero per cent for 2023, if they will show that the will increase are wanted to forestall an working loss. The legal guidelines say IRAC ought to take into account whether or not the owner can safe a “affordable fee of return,” normally outlined as between 4 and 7 per cent.
Brazil disputes the accuracy of the working bills that CAPREIT’s consultant, realtor Ian Walker, introduced earlier than an IRAC listening to.
As one instance, Brazil famous that CAPREIT claimed funds on the principal of its mortgage as working bills. These can’t be claimed as working bills, in keeping with the rules of the P.E.I.’s tenancy legal guidelines.
“They had been bloating their numbers,” Brazil alleged.
CAPREIT dropped its software earlier than the fee rendered its determination. However as a substitute of celebrating the win, Brazil mentioned he’s ready for the opposite shoe to drop.
Rumours of sale
Brazil worries CAPREIT might promote the constructing he lives in, very like it offered 4 house buildings on Waterview Heights Lane in Charlottetown. The Waterview Heights residences, that are nonetheless occupied, are being transformed into condominiums.
Most of the tenants within the Waterview Heights buildings had additionally challenged giant will increase filed by CAPREIT. It’s unclear what’s going to occur to tenants who can not afford to buy their very own models.
Brazil suspects an analogous scenario may happen at his present house.
“That is what it appears wish to me,” Brazil mentioned. “It offered to the identical man that was making an attempt to get the lease enhance. He is turning them into condos.”
Brazil is referring to Walker, a guide whose identify appeared on notices informing tenants that CAPREIT was searching for lease will increase. Walker can also be one of many homeowners of the brand new Waterview Heights properties after buying them from CAPREIT.
SaltWire heard from different CAPREIT tenants who share the identical suspicions.
Shelby Lees, a tenant who lives in a CAPREIT constructing in Summerside, additionally acquired discover final week that CAPREIT had dropped its bid to boost her lease by 12 per cent.
Like Brazil, Lees advised SaltWire in a Fb message that she can also be fearful.
“I’ve an terrible feeling the one purpose it was thrown out is because of them promoting although. However, a win is a win in the meanwhile,” Lees mentioned.
SaltWire may discover no proof that different CAPREIT-owned buildings in P.E.I. have been offered. No order in council has been signed by cupboard authorizing any sale aside from the Waterview Heights buildings.
SaltWire requested CAPREIT if there have been plans to promote every other properties other than the Waterview Heights buildings. No response has been acquired because the request on July 5.
CAPREIT acquired tax break
Regardless of the purposes for lease will increase, CAPREIT took benefit of a property tax subsidy supplied by the P.E.I. authorities.
The province introduced the rental unit property tax subsidy in January. This system supplied a property tax break supplied to landlords battling rising prices in 2023. Landlords who’ve elevated lease in 2023 are speculated to be ineligible to obtain the property tax subsidy for these similar models.
The province and IRAC have signed an information-sharing settlement about better than allowable lease enhance purposes.
A consultant of the Division of Finance confirmed to SaltWire in Could that CAPREIT had acquired the subsidy for a few of its models. Nevertheless, the division didn’t make clear to SaltWire whether or not these models had been the identical ones that acquired discover for a better than allowable lease enhance.
In a July 5 electronic mail, Hillary MacDonald, a communications officer with the Division of Finance, mentioned candidates for the subsidy needed to certify on the applying kind they might not apply for a better than allowable lease enhance by means of IRAC.
“By means of these certifications, it’s our present understanding that there have been no candidates who acquired the rental unit property tax subsidy and likewise acquired a better than allowable enhance from IRAC for the respective unit,” MacDonald mentioned.
MacDonald mentioned the division plans to verify this with an audit however wouldn’t say whether or not particulars about particular landlords could be publicly launched.
Liberal MLA Gord McNeilly, whose district consists of the Waterview Heights buildings, mentioned Islanders have a proper to know whether or not CAPREIT was “double-dipping” with each lease enhance purposes and publicly-funded tax breaks.
“Taxpayers are principally paying for these subsidies. And the underside line is they need to know the place their cash goes to and the way it’s getting used and if the corporate is receiving these in good religion,” McNeilly mentioned.
CAPREIT didn’t reply to questions in regards to the rental unit property tax subsidy.
Stu Neatby is a political reporter with SaltWire in Prince Edward Island. He might be reached by electronic mail at [email protected] and adopted on Twitter @stu_neatby.
