P.E.I. landlords can raise rents by at least 2.3% next year, province announces

Landlords in Prince Edward Island can increase rents for their existing tenants by at least 2.3 per cent and as much as 5.3 per cent in 2025. 

On Thursday, the province's Director of Residential Tenancy announced in a news release that the maximum allowable rent increase as of Jan. 1 (without landlords having to make a special application) will be 2.3 per cent. 

P.E.I.'s Residential Tenancy Act stipulates the annual maximum allowable increase can't be higher than 3 per cent each year, and that rate must be guided by what inflation is doing. However, landlords can apply to the director for a further 3 per cent increase — meaning if their application is successful, they could receive permission to impose rent increases of up to 5.3 per cent next year. 

Landlords must also give tenants proper notice of any rent increase three months in advance. 

The decision was released a day after a group representing Island landlords called for a loosening of P.E.I.'s long-standing rent controls, which underwent changes when the Residential Tenancy Act became law in April of 2023

June Ellis, executive director of the non-profit Residential Rental Association of P.E.I., and board member Soubhi Abla appeared before a legislative committee Wednesday to plead their case.

The rental association, which represents 7,500 units on P.E.I., wants three amendments to the legislation:

• Allow housing providers to set rental rates at market value after a tenant leaves voluntarily.
• Allow housing providers to request rent increases beyond the legislated additional three per cent limit "to ensure financial viability of the rental housing market."
• Allow mobile home park owners to adjust their lot rents based on their expenses and not based on allowable rent increases.

Abla pointed to a case where rent had not been increased for years on a long-time tenant, but the landlord could not increase rent to market value after the tenant left voluntarily.

"We're not asking for rent control to be completely removed," Abla said.

"We're asking that on voluntary tenant turnover that landlords would be allowed to charge fair market value on rent — so no renovictions. If a landlord evicts a tenant, that would not fall under voluntary tenant turnover."

In her presentation, Ellis said the "restrictive" rent controls are contributing to the housing crisis on P.E.I. She said rental operators are leaving the industry because they are unable to maintain their buildings effectively, and invest in necessary upgrades. 

Rental operators do not build more units because the industry is unsustainable.— June Ellis

"Rental operators do not build more units because the industry is unsustainable," she said.

Ellis said the restrictions are leading to more apartments and mobile home parks being turned into condos or housing developments.

Committee member and Green Party MLA Peter Bevan-Baker agreed more needs to be done to solve the housing shortage, but questioned the association's assertion that the new legislation is contributing to a downturn in housing investment on P.E.I. that will only get worse.

"If we look at the investment in the first two quarters of this year, we see that it's actually increased substantially."

P.E.I.'s housing minister, Rob Lantz, has said he's prepared to table changes to the law this fall if necessary, but hasn't said what those could be.