Rent porn

Ottawa’s discovered renters. So what are we to make of this?

You may have heard that the Trudeau Libs will be doing three things in Chrystia’s April 16 budget. There’ll be (if provinces agree) a renter’s ‘bill of rights’ forcing LLs to disclose past price history and offering a standardized lease form. As well, $15 million will fund tenants’ groups that fight landlords. And rent payments will (maybe) be reflected in credit scores, if banks, LLs and credit bureaus agree.

This is happening because (a) it’s only fair to assist renters when owners have been shamelessly doted upon and housing has tax-free profits and subsidized 20x, taxpayer-backed leverage, plus (b) lots of Mills and Zs rent – and the Libs really, really, really want their votes next year.

How many rent? What’s the situation?

About a third of Canadians have leases – five million households. Renters, says RBC, have increased at three times the rate of owners (we know why when houses are crazy expensive). The greatest number of renters are young, but the ranks of downsized Boomers are growing fast.

As for rents, they’ve popped 10.5% in the last year while vacancy rates have dropped. The average rent for all residential properties in the country is just under $2,200. A two-bed unit in Van averages $3,500, in Toronto $3,200, Victoria $2,700 and Calgary just over $2,000.

As evidenced on this pathetic blog and elsewhere in the social media swamp, there’s a war raging between tenants and landlords. Provincial legislation favours renters and makes life a bitch for many property owners. By the same token, amateur landlords have spring up everywhere, encouraged by those ill-thought-out empty-house taxes. That’s helped fuel the conflict.

Also proven here many times is the indisputable fact a young person with limited capital and income is far better off being a renter than trying to sacrifice and own. But societal, peer and (especially) parental pressures often push a successful tent into being an indebted, stressed-out, cash-poor and immobile homeowner.

There should be zero shame in renting. But there’s plenty. To date politicians have been slavish believers in real estate ownership, contributing mightily to that shaming. The coming budget, it seems, seeks to reverse that.

However, it will fail. Maybe it already has. The reaction to the announcements by the PM and poor Sean Fraser, his housing guy, have been… awful. “Virtually every word is false,” says mortgage brokers and social media rockstar Ron Butler of Fraser’s latest vid on the issue. And he’s right. The minister is spinning, fabricating, exaggerating and shedding credibility faster than my Chow is dumping his winter coat.

This is what the Libs claim: “This is about protecting renters. But this is also about generational fairness – making sure Millennials and Gen Z, who are most likely to rent, get a level playing field in the rental market. This is just one of the things that we are going to be doing in this budget to build an economy that is fair for every generation.”

Reality is another thing.

A Bill of Rights for renters means nothing. It’s provincial jurisdiction that covers tenancies and landlord behaviour, so the fed pledge means diddly until those other governments sign on. No landlord will be forced to reveal past income from his/her properties unless the province compels it. And why would that happen? Market rent is market rent. History means nothing.

As for rent going towards a credit score – more fiction. First, small landlords do not (and cannot) report to credit bureaus. Second, just 8% of the kiddos asking for a first mortgage are rejected because of lousy credit. A history of not baying bills or walking out on a credit card will trump any rent record. Nore than 90% are given a loan or refused one simply because they can or cannot afford the property. It’s all about the price of real estate, not the creditworthiness of the wannabe buyer. The Lib claim this will “help millions of renters” get a loan is bunk. Third, lenders are already allowed to take rental payment history into account when reviewing a mortgage app.

It’s not the ability to get a mortgage which stops renters becoming owners. It’s price. Downpayments. Ownership costs, like property tax, land transfer tax, condo fees, insurance and, yup, the mortgage rate. Adds Butler: “The idea that MILLIONS of renters could become owners over night if rental payment history could be applied to a mortgage application is one of the biggest WHOPPERS in the history of lying.”

This is not going to help people who rent become part of the landed gentry. It won’t drop the cost of a lease or a house. It exacerbates the conflict between landlords and tenants. It builds false, groundless expectations. It tromps on provincial turf. And while owners are showered with real tax benefits and financial incentives (making real estate prices worse), renters get smoke, mirrors and falsity.

No wonder the kids are pissed.

About the picture: “Here’s a pic of our rescue, Corby,” writes Paul. “He’s an 8 month old havanese-poodle (or hava-poo). He’s pretty cute!”

To be in touch or send a picture of your beast, email to ‘garh@garth.ca’.