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Inflation and Government Laws Contributing to Lack of Affordable Housing in Montreal
Accessing longterm affordable housing is becoming more difficult in large Canadian cities, including Montreal – a city once well known for affordable rent.
The average rent for a 1-bedroom apartment in Montréal is $1,574, as of September 2023. This is a 8 per cent increase compared to September 2022.
Local 514 spoke with Stefani Balinksy, the Head of Content Strategy at Loans Canada about what's causing rents to be so unaffordable.
Balinksy said there are many factors contributing to this, including inflation and the rise of interest rates.
With rental housing becoming more expensive, one provincial law puts the affordability of rent at risk. Balinksy explained that new regulations by the Quebec government allow for-profit developers to charge higher rents, with no limit of how much they can charge within the first five years of their building having been built.
This means developers will be exempted from following increases recommended by the The Tribunal administratif du logement (TAL), which supervises Quebec’s residential rental market.
The TAL, which supervises Quebec’s residential rental market recommended landlords to increase the rent by 2.3% this year due to the rising cost of living.
What are some reasons that landlords validate increasing their rent?
Balinksy said landlords can validate rent hikes due to renovations and improvements done to property.
Some have concerns about foreign investors taking away housing from locals, but the Canada Mortgage and Housing Corporation implemented ‘The Prohibition on the Purchase of Residential Property by Non-Canadians Act’ which prevents non-Canadians from buying residential property in Canada until 2025. Some exceptions are granted but this means that most newcomers will rely on the rental market.
Balinksy said immigrants not coming to Canada as a refugee or foreign diplomat will be affected by this act. "Yo are shut out of buying a property in Canada for [the next] two years," said Balinksy, clarifying that this is adding to more people relying on rental units, which contribute to a lack of vacancy.