Thursday, March 25, 2010

Fool me once, shame on you. Fool me twice, move to Saskatchewan

It’s safe to say that Saskatchewan was not ready for the housing boom that started a few years ago. Within the span of months, the provincial real estate market heated up as hordes of property speculators came in and bought up what seemed like bargain real estate prices compared to elsewhere. Of course, nearly all of these speculators were former Saskatchewaners themselves, people who had left the province in earlier decades to make small fortunes in Alberta and BC. It felt like in a Poltergeist movie when they all started coming home. “They’re baaaaaack!”

I remember how housing prices went up 60% in one year alone. My house went up in value by nearly $100,000. I said it then and I say it now: it made sense as people were paying more to live in the same place with no other discernible benefits. I still can’t decide whether the stranger thing at the time was the fact that prices could go up in SK or that people were voluntarily moving to the province.

This brings me to the topic of this post: rent controls. You see, the effect of the real estate boom on rental properties was particularly felt. All of a sudden, rental homes began to be converted and sold. Then with no new rental suites being constructed, the city began experiencing low single digit rental vacancies.

Saskatchewan has no rent controls. So what happened next could have been predicted. Owners began to jack up rent prices to take advantage of high demand or as a way to evict renters in hopes of selling. I knew people who faced hundreds of dollars in rent increases in one month. And where was the NDP govt on this issue?


To make things worse, no-one in the province seemed to care enough to force and change. The result? A lot of people found out what it’s like to live in a garage.

I find it particularly rich that, now in opposition, the SK NDP is calling on the govt to do what they did not in all those years in power: install rent controls.

But according to the story, a change is not on the radar for government. And here is the rationale for not doing anything:

Social Services Minister Donna Harpauer stated:

"Because what happens — and studies have shown — where rent controls have been implemented fewer developers will build multi-door units, as well as the landlords will not necessarily maintain the units they have, using the excuse that they don't have enough revenue from those units," Harpauer told reporters.

Apparently, Ms. Harpauer has no idea what has been taking place in the hottest real estate markets in Canada. Both BC and Ontario have had rent controls for years. And have they inhibited new development or resulted in dilapidation? No! Vancouver and Toronto remain the most expensive places to live in Canada. Rack up another giant DUH for SK.

1 comment:

Anonymous said...

By the way, you are welcome for the 9/11 story, where's my royalty cheque? :)

Interesting that you advocate rent controls .. and also interesting that this blog only goes back to 2008 .. I've always suspected that this site might written by an NDP troll ...

First of all, most of the stuff you mention was every bit as prevalent (even more so) when they were in power. Rednecks didn’t suddenly appear out of the ground in November 2007. And do you seriously think that anything would be better around here if Link was Premier? Talk about "giving your head a shake."...