At its July 18, 2023 meeting, the Board of Directors adopted the following motion:
The Board instruct Brydges to budget for a housing charge increase that matches the rate of inflation for the three- and four-bedroom units. The increase for the one- and two-units should be the rate of inflation minus 0.6 percent. Brydges Property management should adjust any increase to ensure that it does not exceed the amount authorized by the Residential Tenancies Branch or the Manitoba Housing Affordable Housing Guidelines.
Since this is only the second increase in OGHC Housing Charges since the co-op opened in 2018, members may have a number of questions about this motion.
Is an increase needed?
Over the past five years, the cost of living has increased by 17.69 percent, while our housing charges, depending on the size of your unit, have increased by between 0 percent to 2.2 percent. The continued high rate of inflation will affect our maintenance costs, our utility costs, and our insurance costs. Insurance costs, for example, have increased at well over the rate of inflation in the last two years and are likely to continue to rise at a high rate. We will also have to renew our mortgage in three years and unless interest rates moderate, we can expect to see a jump in our mortgage payments. Increased costs of building supplies mean that we must continue to increase our contribution to the capital replacement reserve at the rate of inflation.
How much will housing charges go up?
That has not been decided yet. We have instructed Brydges to prepare a budget that would increase the housing charges based on the costs of living. As the year progresses that figure will change (either up or down). The budget is generally finalized in October and presented to the Board and the members in November. We will use the most up-to-date figures.
Is there any limit on how much rates can go up?
Yes. The rate cannot be increased by more than the three percent allowed for 2024 by the provincial government’s rent-control regulation.
In addition, no increase can be above the limit allowed by the Manitoba Government’s Affordable Housing Guidelines. These Guidelines were last increased in September 2021.
How will this affect people on rent supplement?
The households on rent supplement pay 30 percent of their income on rent. The government covers the rest of the cost. As a result, if their incomes remain the same, they will not have to pay more. If their incomes go up, they will have to pay more, but that would happen even if we do not increase housing charges.
What has been our housing charge increase history?
- 2018: Co-op opens
- 2019: No increase in housing charge or the $35 amenity fee.
- 2020: 2.25 percent increase in housing charges. No increase in the $35 amenity fee that all households paid.
- 2021: No increase in housing charge (The $35 amenity fee was folded into the housing charge.)
- 2022: No increase in housing charge
- 2023: No increase in housing charge
Why did we go so many years without an increase?
In 2021 any increase would have put us over the Affordable Housing Rent Guidelines on the three-and four-bedroom units. It was thought to be unfair to raise the rates on the one- and two-bedroom units.
In 2022 and 2023 the Manitoba Government rent control limits were zero and zero.
Why will there be a greater increase in the three- and four-bedroom rates?
Because it is fair. When we raised rates in 2020 by 2.25 percent, we expected that the Manitoba Government would increase its Affordable Housing Guidelines. But it did not do so. The 2.25 increase put the three- and four-bedroom units over the government limit. In effect, the government would only approve a 1.6 percent increase to the three-bedroom units and a rent freeze for the four-bedroom units, while the increase on the one- and two-bedroom units was 2.2 and 2.1 percent. Because rents were frozen for the following two years, this is our first chance to adjust for this inequity.
What happens next?
Brydges Property Management will take our instructions and develop a budget. This budget will be presented to the Finance Committee for review in September. The Finance Committee will review the budget and present it to the Board—either in September or October. The Board will review the budget and present it to the members to review in November. The Board will adopt a budget in November or early December.
When would any housing charge increase come into effect?
OGHC must give members three months’ notice of a housing charge increase. It is likely that the earliest it would come into effect would be March 1, 2024.
For further information contact Doug Smith.