At LCTaylor Licensed Insolvency Trustee, we are firm believers in the power of budgeting to achieve financial stability. But in the past few years, creating an accurate budget has become increasingly difficult.
If you’ve faced job disruptions due to the COVID-19 pandemic, your income may have fluctuated. Meanwhile, inflation and rising interest rates have likely put pressure on your expenses. For renters, these financial strains are compounded by the increasing cost of housing.
Manitoba’s Rent Increase Freeze
If you rent your home, you’ve probably noticed your rent climbing over the last few years—perhaps more than you anticipated. Officially, the Manitoba government froze rent increases at 0% in 2022 and 2023, allowing only a 3% increase in 2024—a rate well below the Manitoba Consumer Price Index.
However, despite these regulations, many tenants have still seen their rent rise at a much higher rate. How is that possible? What is the actual maximum rent increase in Manitoba?
Understanding Rent Controls in Manitoba
Manitoba imposes rent increase guidelines, but they don’t apply in all situations. For example:
- If your rent is above $1,615 per month (as of December 31, 2023), the guideline does not apply.
- Units in buildings constructed after March 7, 2005 are exempt from rent control.
For these properties, landlords can raise rent as much as the market allows.
Another way landlords can increase rent beyond the regulated maximum is by applying to the Residential Tenancies Branch for an above-guideline increase. If a landlord can prove that their expenses have risen significantly—such as property taxes, maintenance costs, or interest on financing—the Residential Tenancies Branch may approve a higher rent increase.
Landlords Are Facing Increased Costs Too
Just like tenants, landlords have been impacted by inflation. Rising costs of building materials, maintenance, and interest rates have put financial pressure on rental property owners. When expenses outweigh rental income, landlords may seek higher rents to balance their budgets.
As a result, the Residential Tenancies Branch has approved the majority of above-guideline rent increase applications in recent years:
- 96% approved in 2020
- 80% approved in 2021
- 92% approved in 2022
While these rent increases place an additional financial burden on tenants, the alternative—landlords reducing maintenance and building upkeep—could also negatively impact renters.
A Delicate Balancing Act
Regulating rent increases is a complex balancing act. If regulations favor tenants too heavily, fewer people will invest in building rental properties, leading to a housing shortage and higher rents. But if landlords have too much freedom, renters may face unmanageable cost increases.
The Manitoba government attempts to strike a compromise, setting rent increase limits while allowing exceptions when justified.
How Rent Increases Impact Your Budget
With rent increases uncertain from year to year, budgeting can be difficult. The good news? Your landlord must provide at least three months’ notice before increasing rent, and typically, they can only do so once per year.
Once you know your rent for the year, the next step is ensuring you can afford it. Missing rent payments can harm your relationship with your landlord and affect your ability to secure housing in the future, as some landlords check rental payment history.
What If You Can’t Afford the Rent Increase?
If your rent is increasing and your budget is already stretched, it may be time to reassess your financial situation. If you’re carrying debt, higher interest rates may have made credit card payments, lines of credit, and other loans more expensive, further straining your budget.
One way to regain control is by reducing or restructuring your debt. Two potential solutions include:
- A Consumer Proposal – If you have a steady income, this allows you to reduce your debt into one affordable monthly payment, often eliminating a portion of what you owe. This can free up cash flow to better manage rent and other essential expenses.
- Bankruptcy – If your income is unpredictable or modest, bankruptcy may be a better option. It eliminates unsecured debts and gives you the chance to start fresh, helping you build a more stable financial future.
We’re Here to Help
Without the burden of past debts eating into your income, you may be better positioned to manage rent increases and other rising costs.
If you’re struggling to make ends meet, we can help. Contact LCTaylor today for a free, no-obligation consultation. We’ll review your situation, explore your options, and help you find the best path forward.
Call us at 204-925-6400 or email questions@lctaylor.net to book a free, no-obligation consultation.
Leigh C. Taylor, LIT
