February 17, 2022
Multi-family Rent Control – Alberta vs. Other Provinces
If you are a landlord and looking to invest in the multi-family real estate market, Alberta is definitely the place to be.
Unlike some other provinces in Canada, in Alberta there is no limit on the amount by which a landlord may raise the rent for a tenant.
In a competitive market, and one where more and more consumers are choosing to rent rather than buy, the absence of rent controls in the province makes it a very attractive place for investors to seek good returns for their money – both in the short-term and over the long haul.
For example, Ontario and British Columbia have very strict rent controls but Alberta has none.
It’s so much easier to raise rents in Alberta driven by supply and demand in the market.
And the market in the Wild Rose province is booming these days. Population growth and growing numbers in net interprovincial migration as well as immigration are creating the perfect environment for increasing demand in the multi-family market.
Also, renting a home is becoming more popular with people these days as opposed to buying property which continues to rise in value, making it unaffordable for some people to attain homeownership. It has also become a lifestyle choice for many people.
Another factor leading to increasing demand is affordability of the rental market in Alberta. Major cities such as Calgary and Edmonton offer much lower rents for the consumer than many other Canadian cities such as Toronto and Vancouver.
Besides the lack of rent controls, there is also an ease of eviction in the province for issues such as non-payment and damage. Alberta has created an environment where it is so much easier for a landlord to protect their property than for example in Ontario where you have to almost go through a court process in some cases for evictions.
For landlords and prospective investors, Alberta has created an appealing environment to enter into or expand their portfolios in the multi-family market.
There’s a better ease of adapting to the changing real estate market.
The question becomes: how does rent control impact supply?
If you are a developer in a rent controlled market, you are not as inclined or incentivized to build new product or even perhaps to renovate existing buildings for landlords.
This has created an issue of supply across the country. There’s a massive housing shortage in some provinces, such as Ontario, where there exists strict regulations around land use and development and rent control.
For housing affordability issues, it’s counterintuitive, but it impacts it.
With no rent controls, increasing demand, lack of supply, good affordability, Alberta has become a great market for landlords and investors to own and develop multi-family residential real estate.
Chris Chornohos has a passion for real estate and helping his clients reach their business goals by providing Real Estate Investors and Owners with the first class valuation and advisory services to close more deals. Chris is also an investor, builder and developer. Reach out to Chris today to help with your Real Estate needs.
E: Chris.Chornohos@nmrk.com W: www.chrischornohos.com
*Image source: envatoelements.com
