'Now is the time for action,' says Mayor Valrie Plante, as Montreal vacancy rate hits 15-year low

Montreal is running dangerously low on available rental housing, andthe city's mayor is calling on both Quebec and Canada to help.

The Canada Mortgage and Housing Corporation (CMHC) released its rental market report Wednesday, showing the city's rental vacancy rate is the lowest it's been in 15 years 1.5 per cent.

"Now is the time for action," Montreal Mayor Valrie Plante tweeted in response to the CMHC findings.

The city will continue to work with the federal and provincial governments to find solutions, as they have an "important role to play in the area of housing, in particular so that investments in social and affordable housing are quickly confirmed," she said.

She said the administration is "working tirelessly to develop housing adapted to the needs and budget of Montrealers ... but we cannot do everything alone."

Tight market right across Canada

The strong demand for rental housing has continued to outpace the growth in the supply right across Canada, saidBob Dugan, chief economist for CMHC.

"The low vacancy rates observed in major centres highlight the need to increase the supply of rental housing in order to ensure access to affordable housing," he said.

The CMHC's reportprovides an overview of 2019, comparing vacancy rates over the last seven years.It shows that in the greater Montreal region, the vacancy rate was up to 4 per cent in 2015,but it hascontinued to tumble since.

"The rental market has been firming up for three years now in the Montreal area," the report says.

That's despite a relativeboom in rental housing construction. In 2019, 8,500 new units were added to the city's rental stock 1,000 more than in 2018.

Multi-bedroom units almost non-existent

With a record number of people migrating to the region, nearly every available apartment is occupied, especially in boroughssuch as the Sud-Ouest and Verdun, where the vacancy rate has droppedas low as 0.5 per cent.

Apartments with three bedrooms or more are in the highest demand, with an average monthly rent hovering around $1,070 per month and a vacancy rate of 0.7 per cent.

And things aren't looking much better off-island, as the vacancy rate in the suburbs has dropped to 1.2 per cent.

The rise in housing prices has also played a role, as fewer people under 35 are buying properties.At the same time, with the aging population, more older homeowners aredownsizing to rentals, the report says.

The availability of rental housing in Montreal is on par with what's happening across the country. The national vacancy rate stood at 2.2 per cent. That's down from 2.4 per cent in 2018, making it the lowest level since 2002.

Regulations drive out investors, group says

Some landlords and developers say Quebec'sstrict regulations rent control, costly building permits, zoning laws are hurting the industry and making the situation worse.

"The more regulations we have, we haveless production of new housing stock," said Hans Brouillette, spokesperson for the Corporation des Propritaires Immobiliers du Qubec(CORPIQ), a landlords'association.

The first step, he said, is to scale back on provincial and municipal regulations that raise costs for investors looking to build or renovate properties.All the extracosts get passed onto the renters, he said.

Property owners who can't raise rent enough to cover those costsmay turn to other options such as subdividing the property, letting their family move in, or hosting short-term rental services like Airbnb, he said.

They may even resort to leavingthe property vacant because it's not profitable to investtens of thousands of dollars in a unit that can only be rented at a nominal rate under the province's rental control laws, he said.

"The rents are too low for the trouble of managing those apartments or renovating them," Brouillette said.

Housing groups call forprovincial action

However, those very regulations and policies that arekeeping more rental stock off the markets, according to Brouillette's group,are whattenants' advocacy groups say Quebec needs to tighten up.

A provincial coalition of housing advocacy groups, RCLALQ, is demanding Quebec's housing minister come up with short-term emergency measures.

"Minister Andre Laforest must act quickly if we want to prevent renters from findingthemselves on the streets on July 1," said RCLALQ spokesperson Maxim Roy-Allard in a statement.

Rents are becoming unaffordablefor many tenants, says RCLALQ, with95,000 Quebecerspaying more than 50 per cent of their income toward shelter, forcing them to cut back on other necessities.

And the competition for rental units creates other problems as well, the group says.

"These low vacancy rates intensify the discrimination experienced by tenants as owners become more selective," tsaid RCLALQ.

"Even if discrimination is prohibited under the Quebec Charter of Human Rights and Freedoms, many landlords do not hesitate to discriminate or use different schemes to avoid renting to certain people."