Government's landlord support program 'falls far short'

A property tax rebate announced by the P.E.I. government Tuesday for landlords will not come close to covering losses from inflation, says the Residential Rental Association of P.E.I.

The property tax rebates are meant to make up for a freeze on rents next year, imposed by the government after the Island Regulatory and Appeals Commission recommended allowable increases of 5.2 per cent, or up to 10.8 per cent for units with oil heat included as part of the rent.

"We're somewhat underwhelmed with what has been proposed," said Chris LeClair of the Residential Rental Association of P.E.I.

"When we were asked, and when we responded to the minister, with our understanding of what a compensation package should look like, we based it on the lost income that property owners would experience as a result of the freeze, and again, a property tax rebate falls far short of that."

When IRAC announced the allowable increase in September the government immediately responded that it would intervene, and announced the freeze in November. That freeze allows for special applications for increases of up to three per cent.

When announcing the freeze, Housing Minister Matthew MacKay said he was also exploring options for supporting rental property owners.

The Residential Rental Association of P.E.I. requested a meeting with MacKay about what that support might look like but did not get a response, said LeClair.

A double benefit

The government announcement included financial support for rental property owners to install heat pumps and move away from oil heat.

Green MLA Hannah Bell was particularly excited about that part of the support plan.

"That's the thing that's obviously going to have that double outcome," said Bell.

"It's going to mean the cost to operate the properties is reduced but also we're going to be getting closer to our targets in terms of greenhouse gas emissions."

It appears, overall, to be a very generous program, said Bell. She is still waiting to see details of how it will roll out. It may be too generous, she said, if landlords can get a property tax rebate, support for installing heat pumps and a rent increase through a special application to IRAC.

She also remains concerned about a group that has not yet received any support for the soaring cost of heating homes with oil.

"We're still not seeing any help for tenants who pay for their own heat," said Bell. "They're still left out of that equation."

'One-time, one-year'

Part of the trouble with the property tax rebate is it is a one-off, said LeClair.

Landlords are facing costs that have risen with inflation and will not go down in years to come, he said. Increasing rent would address that; the property tax rebate will not.

"One-time, one-year, versus an ongoing rental increase designed to help address inflation," said LeClair.

"IRAC considered the inflationary pressures that property owners had experienced in 2022, and working with the Department of Finance, concluded that rental increases in the range of five to 10 per cent — give or take, depending whether oil [heat] is provided — was warranted in light of the real costs that property owners were experiencing. The measures addressed today do not address that magnitude of loss."

The association needs more time to look over the government programs to get a full understanding of how much support they will provide, said LeClair.