Nobody really cares about the tenants

Canada’s renters are finally having their moment in the political sun. After a lifetime of being carefully ignored by most elected officials in favor of current and aspiring landlords, renters and their problems are suddenly on the tip of almost everyone’s political tongue. That includes Prime Minister Justin Trudeau, who made his appeal to them Wednesday in Vancouver, the city with the highest rents in the country. “In today’s Canada, more people than ever are renting. And that number is growing at twice the rate of those who can buy a new home compared to a decade ago.”

Trudeau’s new interest in renters is understandable. Pierre Poilievre’s conservatives have breakfast, lunch and dinner with younger voters, without whom he has no possible path to re-election. “Nearly two-thirds of young Canadians rent their homes,” Trudeau said in his remarks, “and pay a higher proportion of their income on housing than other generations.” And it is not surprising: according to the Canadian Mortgage and Housing Corporation, in Vancouver, the average two-bedroom apartment Rents now cost almost $2,200 a month, almost 10 percent more than a year ago. With vacancy rates below one percent, those rents aren’t going down anytime soon.

If anything, that data understates how dire the situation really is. According to the Monthly listings from Rentals.ca and Urbanation, which offer a more accurate look at what it costs to rent something today, the average rent for a two-bedroom apartment is $3,541. This actually represents a modest decrease from prices a year ago, if you can believe it. This increasingly desperate situation is draining the bank accounts of younger renters and making it impossible for them to save for their future, much less the kind of down payment needed for a home. average condo in vancouver that now costs $827,000.

In that context, the prime minister’s words will only go so far. This is especially true given that the actual measures he announced will only compound the wounds of Vancouver tenants. The $15 million in funding he announced for provincial legal aid organizations to protect tenants against unfair practices and bad landlords is nice, but it’s not the kind of thing that gets people excited about their future.

And the promise to encourage banks and other lenders to more heavily balance rent payments on a borrower’s credit history is downright tone-deaf. The problem most renters face is not bad credit, but the brutal economic calculations surrounding trying to move up the real estate ladder right now, especially when rents continue to rise by five to 10 percent. year. As a recent RBC report As noted, renters are now “dissaving” – that is, spending more than they earn – at a rate of almost nine percent. It’s hard to build up those savings when the nest egg gets smaller and smaller.

Finally, a “tenants’ bill of rights” has been promised that will apparently force landlords to disclose an apartment’s price history. We’re told this will help tenants negotiate rent, but that’s not at all how negotiations work in the rental market when vacancy rates are as low as they are now. If anything, this only makes the situation even more infuriating, since tenants will be told that the unit they want for $3,000 used to rent for $1,500 a few years ago and there is nothing they can do to close that gap.

The thinness of the porridge he is serving does not seem to have dawned on the Prime Minister. “It’s about changing the rules of the game so that it reaches young people where they are,” he said Wednesday. But the rules of the game will remain exactly the same: landlords will have the power, tenants will have almost no power, and the game will continue to appear rigged against them and favor those who already own real estate. As that RBC report noted, while homeowners saw their net worth grow from nine times household disposable income in 2010 to 13 times in 2023, renters only saw it increase from three to 3.5. Rich households continue to get richer and nothing in the Prime Minister’s announcement will change that.

Neither will anything that Poilievre proposes, mind you. His promise to eliminate the Trudeau government GST exemption in new purpose built rentals unless they offer below market rental prices is a de facto promise to eliminate it entirely as there is no way a new apartment can compete on price with one built 10 or 20 years ago. His refusal to denounce people like Doug Ford, political allies who directly hinder the delivery of new housing, shows how insincere his promise to “fire the gatekeepers” really is. And his refusal to entertain the idea of ​​direct government involvement in building co-ops and other non-commercial options means he’s not really serious about the kind of deep affordability that renters in cities like Vancouver desperately need.

As someone who has written repeatedly about virtues of renting and the importance of renters, I’m glad to hear that federal political leaders finally recognize their existence. Having them fight, even half-heartedly, for the votes of the tenants of this country is much better than actively ignoring them. But until the proposed policies match the rhetoric surrounding them, Canada’s renters shouldn’t get too excited about all the attention they’re getting.

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