Higher Oil costs – What if you are a landlord? How do you stay in Business?

PEI landlords are going broke with higher energy costs – they have gone to IRAC to ask for a significant increase of between 7% – 30%.

Landlords on P.E.I. have asked the Island Regulatory and Appeals Commission to let them increase rents next year from seven to 30 per cent.

The requests came in the form of written submissions to IRAC. Twila Whalen, director of residential rental property, told CBC News Tuesday this has been a busy year for submissions. Most years there are no more than five, but this year more than 30 have been received, 18 from landlords and 13 from or on behalf of tenants.

Landlords say they need the increase to cover the cost of heating oil. Whalen said some tenants are worried they’ll be hit with a big increase all at once.

“Some of the tenants were actually requesting that if there’s going to be a large rent increase that it would be divided between two years or three years, not make it all at once,” said Whalen.

“That would be understandable, being that their increase in income would never cover anything, for example, like a 10 or 20 per cent increase.”

IRAC will decide by the end of the month how much rents can go up as of Jan. 1. The increase last year was capped at one per cent.

We are caught by a dilemma here. There are 11,000 renters on PEI. Many are the most vulnerable. But no one is a landlord as a charity. Costs have gone up by a lot. I spoke to a landlord the other day who simply does not know how he can continue – he is seriously thinking of not having tenants.

So how do we balance out the needs of the providers of appartments and those that have to have a home?

I humbly suggest that we have to see both at the same time – it can no longer be tenant versus landlord – but we have to find out how to meet the needs of both.

No reasonable return for landlords means no apartments. No apartments means that we have lots of homeless. Apartments that are too expensive means that we have lots of homeless.

Surely, to prevent homelessness, we have to help landlords AND tenants reduce their use of energy and later to make the shift from oil to local energy sources.

In my own case – I too am a landlord – I will be adding more insulation to the attic of my rental. This should reduce the costs – but I get no help in this. All the investment comes out of my pocket. I have installed a pellet stove and I have set up the water heating to be in the control of my tenant. I will supply the pellets and while I still supply oil heat from my own hose, I have asked him to use the pellet stove as much as possible. I will install a more flexible thermostat.

It’s not ideal. Ideal would be to have my tenant responsible for all his energy use. But like most landlords – that is technically not possible. At some point don’t we all have to be responsible? My landlord friend was livid last winter to see windows wide open in some of his units. The full burden cannot be only on the landlord. There has to be a partnership I think.

I think that this is a strategic issue that is grounded in PEI having a civic society. I fear that if we leave this alone, we risk having a lot of homeless people.

We have to have a layer of housing that is affordable. Until now rentals have been this layer. Few renters and landlord on their own are going to be able to come up with a process that will satisfy both parties.

I think a mediator and a plan for support is called for.

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One response to “Higher Oil costs – What if you are a landlord? How do you stay in Business?

  1. I think we all know that government is not the greatest source on innovation that ever there was. This seems like a problem that requires lots of innovation. So, take it off of the government’s plate.

    Landlords have no interest in bankrupting their tenants. Tenants have no interest in putting their landlords out of business. Each looking after their own self-interest will inelegantly fumble toward the necessary compromise.

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