Tuesday, February 13, 2007

Condos The Problem

In Alberta rents are rising 400% in Calgary. Edmonton is just as bad. Rent controls are needed. But of course the Alberta Government opposes rent controls.

In an interview Friday, Service Alberta Minister Lloyd Snelgrove said rent controls are a no-go."It just discourages landlords from building any new (units)," Snelgrove said. "It might seem a good thing for the person in that apartment at the time, but for the 2,000 people that are moving to town next month, there will be no buildings.

What a lot of blather and bullshit, landlords have not built any new apartments in years, the developers are all building condo's or transforming existing apartments into condo's.

While big property companies buy up existing apartments and slap a coat of paint on them and up the rents. Forcing renters to now become homeless.

Calgary based Boardwalk bought up many independent rental properties across Canada, making itself one of the largest rental monopolies in the country and one the largest REIT Income Trusts.

   Commenting on the Trust's Q3 2006 results, Sam Kolias, President and
C.E.O., said

"We are pleased to report a strong third quarter for our Trust. Excellent
market fundamentals aligned to produce positive effects on the Alberta rental
market. After the strong summer we just enjoyed, our Trust is positioned to
end 2006 on a high note. We anticipate a solid winter and remain confident in
meeting or exceeding the majority of objectives detailed in our 2005 Annual
"The rental market remains robust in Alberta, as substantial net
provincial in-migration, high home prices, exceptional industry growth and
record low unemployment combine to generate solid demand. Our Alberta market,
which makes up in excess of 50% of our total portfolio, saw its already low
vacancy decrease still further through the third quarter."
"Current average monthly market rents in Alberta increased by
approximately $328 in the first nine months of 2006, from $817 as at
December 31, 2005, to $1,145 at September 30, 2006. Even as rents increase,
however, the gap between home and condominium ownership costs versus the cost
of renting continues to widen still further, pricing many would-be homeowners
out of the market. Given the 45% gains in house purchase prices seen across
Alberta in the past year, rental rate increases prove to be substantially more
affordable than home purchase. In fact, increasing home purchase prices make
renting the best value in accommodation available in Alberta today. These
market fundamentals continue to bode well for Boardwalk's future."

As this unplanned, unorganized, uncontrolled boom continues renters in Alberta suffer from housing flips and speculation. Proving once again as Proudhon said; property is theft; when landlords deny possession of property to renters.

Should the government adopt rent controls to level the playing field for the working class. Of course. Business always calls for the government to regulate in order to avoid a monopoly and to 'level the playing field', so why should rent controls be any different. They allow the government to cool down an overheated market that is exploiting an artificial lack of rental properties to gouge and screw renters.

Rent controls would be a solution, condo's and housing flipping are the problem.

A h/t to Werner Patels.



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