Montreal January 17, 2023 --- The Association des Propriétaires du Québec (APQ) reacts to the release of the percentages applicable to the setting of the 2023 rent by the Administrative Housing Tribunal (TAL). This year, inflation put pressure on the CPI (Consumer Price Index) which led to a record year in terms of the adjustment rates issued by the TAL.
When we see that the percentages are determined for more than 40% by the cost of fuel oil, it has become essential to take the time to make your own calculations. Do not rely on a proposed average rate because you may claim less than what you would be entitled to!
“Although this year’s rates of increase are higher, these rates are still clearly insufficient to maintain a healthy and modern housing stock. The Government missed the opportunity, as it has every year since 1981, to modernize this outdated calculation method that benefits neither tenants nor landlords!” says Martin Messier, President of the APQ.
While the rate for major work has increased from 2% to 3.8%, the fact remains that it will take 26 years for a return on investment: $3.17 for every $1000.00 of work done. As of today, with a mortgage of $100,000 for work of $100,000, with an interest rate of 5.69%, a rental housing owner will have to repay $621.5 per month with a 25-year amortization.
Let’s take a simple example: A rent of $2000, with major work done at $100,000.
- The owner would be entitled to an increase of $317.00 per month in connection with major work.
- For a mortgage of $100,000 over 25 years at 5.69%, the payment would be $621.50 per month.
“Be careful, to make your calculations you must take into account ALL your expenses and even increases in municipal, school and insurance taxes.”
“Owners, do not rely on a general rate or estimates for all of Québec, take the time to calculate for each dwelling how much you will be entitled to,” adds the APQ.
The APQ survey: The lowest rent will always be too low.
The Association des Propriétaires du Québec (APQ) conducted a survey to determine the lowest rent paid for a 3 1/2 and a 4 1/2 in Québec.
“With this survey, we wanted to put an end to the vendetta against rental housing owners which says that all rents are unaffordable, and which demands a register of leases among other things.”
What is the lowest rent paid among your 3 1/2 in January 2023? 37.38% of the respondents have their lowest rent below $600 and it rises to 61.81% for a rent below $700.
What is the lowest rent paid among your 4 1/2 in January 2023? 54.62% of respondents have their lowest rent below $800.
Also, according to the latest CMHC (Canadian Mortgage and Housing Corporation) report, the average rent in Montreal is $932.
Rents must be rising as increases are needed to maintain safe housing and meet exponentially costly expenditures. But the amount of rent in Québec remains among the lowest in the country. And if tenants can no longer pay their rent, it would be good to look at their ability to pay by how to help them.
For instance, a solution applicable now can be introduced such as reviewing the eligibility criteria for a rent supplement to allow more tenants to be eligible for assistance to pay their rent. Another solution would be to help builders reduce construction costs in order to offer affordable rents.
“We must stop confusing a tenant’s ability to pay with the price of rent paid. Rental housing owners also have expenses related to the building to assume, mortgages and taxes to pay, insurance and unpaid rents in some cases. We always talk about the financial capacity of the tenants, but who addresses the debt of owners, the stress of compliance with regulatory and governmental obligations?”, concludes the APQ.
Calculo APQ for your needs
The Association des Propriétaires du Québec (APQ) always provides the calculation tool “Calculo APQ”. With this calculation tool, you can easily make your calculations of rent increase and notification dates. After the calculation, you will be able to receive by e-mail the automatically generated documents in order to keep your calculations and print your notices directly according to your choice of increase. Download the APQ app that is available on Google Play (Android), App Store (Apple, iPhone, iPad) and Microsoft (Windows 10) to do your calculations: https://www.apq.org/application-apq/
Survey conducted online from January 9 to 15, 2023 with 618 respondents.