To increase or not to increase
IRAC’s Residential Rental Property Division is reviewing written submissions
The office that makes annual recommendations regarding allowable rent increases, if any, on P.E.I. has spent the last month asking for written submissions on whether to hike rent on the Island.
Jennifer Perry, acting director of the Residential Rental Property Division within the Island Regulatory and Appeals Commission (IRAC), said last year 24 written submissions were received – including 11 from landlords.
“Tenants are typically concerned with affordability of their unit, and landlords are typically concerned with how much costs are going up and their increase in expenses and maintenance,” she said.
“Most times, tenants want a very modest increase because a lot of folks are on a fixed income.”
Perry explained that the rent increases cover apartment buildings as well as basement rental suites, in-law suites and room rentals.
Her role is to gather information and make a recommendation to IRAC for a final decision.
The criteria for determining if a rent increase is allowed includes the consumer price index, the current and future state of housing and rental units operating costs and heating oil and electricity costs.
“It’s a big basket that is looked at and analyzed by the commission to come up with a fair increase,” she said. “You do have to balance both sides.”
For 2017, IRAC allowed a 1.5-per-cent rent increase for heated, unheated and mobile home sites. But the previous year, the commission decided not to allow any rent increases. Perry explained there was no increase that year because of the low increase in the Consumer Price Index.
But in 2013, landlords were allowed to raise the rent by five per cent for heated units due to the increased cost of heating oil, she added.
If a landlord violates the rules, such as increasing the rent by accumulating annual rent increases dating back several years, a tenant can apply to the Residential Rental Property Division to have rent returned for the month.
As well, when a tenant leaves, the landlord cannot immediately raise the rent on the unit for a new tenant because “the rent stays with the unit,” she said.
Mike MacDonald, general manager of the Upper Room Hospitality Ministry, said he sees the effects of high rent in Charlottetown through clients of the food bank.
“It certainly is, if not the biggest one of the biggest, issues that the people using food banks or soup kitchens have is finding affordable housing,” he said.
Housing and employment are common concerns with clients, MacDonald said. “Obviously we do hear that.” Perry said the commission usually reaches a decision on whether a rent increase will be allowed by the last week of September.
Doing so allows landlords to give tenants three months written notice of a rent increase in time for the start of the new year.