Revised - The Yukon government has decided to subsidize the territory’s landlords after inflation rates surged above recently enacted rent-hike limits.

The new measure puts up about $1 million overall and is intended to incentivize landlords to keep renting out their properties instead of selling.

“While vacancy rates in our territory remain low, we want to encourage landlords to remain in the residential market, continuing to make housing available in our community,” Premier Ranj Pillai said in a written statement released Thursday.

Not everybody is happy with the plan, with Yukon Party Leader Currie Dixon calling it “backwards-looking.

“It’s focused on landlords that own rental units in 2023,” he told reporters Thursday. “There’s nothing going forward to 2024 or beyond.”

And NDP MLA and housing critic Lane Tredger says the government is handing out money to the wrong people.

“We have a million dollars to spend; why not put it in the hands of renters?” Tredger asked.

Since 2021, landlords have had rent hike limits tied to the previous year’s inflation rate.

Additional rules introduced earlier this year now cap those rent hikes at five per cent.

All of these rules were enacted as part of agreements between the NDP and the Liberal government, and include regulations preventing landlords from evicting tenants without cause.

With inflation at 6.8 per cent, the new subsidy is supposed to make up the difference.

Landlords will be able to apply for one-time $338 payments per unit, equal to 1.8 per cent of the average rent collected in the territory.

If inflation dips below two per cent – as it did between 2014 and 2017 – landlords are still allowed to raise rents by two per cent per year.

The Yukon Residential Landlords Association applauded the government’s decision to enact this measure as a corrective to the rent caps.

“This funding is a good gesture to correct the damage done,” says a press release from association president Lars Hartling.

His statement also calls for legislative change and more investment into housing supply.

“This program is not a solution to the problem; it is just a Band-Aid to repair the damage already done,” it reads.

The announcement comes during the Yukon Anti-Poverty Coalition’s Poverty and Homelessness Action Week, and executive director Kristina Craig criticized the timing, saying she was “gobsmacked.

“All this does is really continue to polarize things,” Craig told the Star this morning.

“The truth is that people who are struggling the most are people who cannot find affordable housing, cannot find affordable rental housing.”

Where are the rentals?

Leaders from all three political parties have said the Yukon needs more housing development, with a focus on rental housing.

According the Yukon Bureau of Statistics’ yearly rental surveys, the number of rentals in the Yukon has remained fairly steady since 2015, and actually decreased between 2016 and 2019.

The bureau reported there were 2,367 rental units in the Yukon in 2015 and 2,446 in 2023.

This is despite construction of 1,988 new housing units between 2015 and 2021 in Whitehorse alone, according to the Canada Mortgage and Housing Corp., which included 837 new apartments.

The rent-hike restrictions were first put in place in 2021, and Dixon says this is what is forcing landlords out of the rental market.

“It’s pretty clear that something happened in 2021 that caused interference in the rental market,” he told reporters on Wednesday.

Though the stagnation of the rental market pre-dates the restrictions, it is clear that supply of rentals has not risen with population.

Since 2015, the population of the Yukon has grown considerably, increasing by 19.7 per cent from 37,343 in 2015 to 44,492 this year.

Dixon blames the Yukon government for the failure to encourage development of new rental units to match this population growth.

“The fact that we’re having such a significant population growth, combined with a limited number of rentals coming into the market is causing a problem,” Dixon said.

Pillai gives a few reasons for the limited increase in rentals, despite the increase in housing stock overall.

He says he has heard from people who are retiring and have decided to sell their property instead of rent, with those units becoming owner-occupied.

This was the same thing the Star was told today by Hartling of the landlords association.

“I am quite aware of landowners leaving the industry,” he said.

Neither were able to provide numbers to back this up, with Hartling saying it is something that really couldn’t be quantified.

“That’s always going to be a hard one to get numbers for,” Hartling said.

Pillai did say there has been lots of investment in condo development, but that hasn’t turned into rentals.

He said that one solution would be to put regulations in place to force developments to be maintained as rental. This is what he suggested for the long-planned Fifth and Rogers development.

“What I want to see is strict parameters around that land, that if it goes in the private sectors hands, it defines that they have to build rental housing,” he said.

It is also not clear what effect the switch of units to short-term rentals has had on the market.

Statistics are not currently being collected by the territorial government or Whitehorse’s municipal government.

National studies have shown the market of short-term rentals in Canada doubled in 2019 alone, and provinces such as B.C. are now creating new rules due to the impact on rents.

Looking at current Airbnb listings, there are 213 full units currently available for short-term rentals in the Yukon.

This only includes short-term rentals listed on Airbnb and does not include many other “corporate” furnished rental units.

The latest number of vacancies for regular long-term rentals in the Yukon was 54.

City of Whitehorse spokesperson Oshea Jephson did say in an email to the Star that the city is studying the impact of short-term rentals and monitoring the new rules being rolled out in B.C.

“We are focused on creating an environment that promotes and encourages development and access to housing, including short-term and long-term rentals, for residents through our policies and bylaws,” Jephson wrote.

Pillai said he supports maintaining short-term rentals as an option for people, saying that he knows some of the Yukon’s most vulnerable people need these types of housing.

Current Airbnb rentals available currently in the Yukon range from $76 per night ($2,280 per month) for a cabin without running water to $462 per night ($13,860 per month) for a three-bedroom house.

How to Qualify

To qualify for the program, all a landlord needs is to meet the requirements of the Residential Landlord and Tenant Act and have collected rent for at least part 
of 2023.

If a unit was used as a vacation rental or hotel room at any point during the year, it must also have been rented to one single tenant for at least six months to qualify.

Both Pillai and Tredger committed to not applying for the program themselves, and Pillai also said he would discourage any members of the Liberal caucus who are themselves landlords from applying.

Dixon would not give any such pledge, though he noted he is not a landlord and he would have to look into the whether there would be a conflict of interest for Yukon Party MLAs to apply.

“If the intent is to stabilize the rental market, then I think MLAs who own property are eligible to receive that benefit,” he added.

Landlords will be able to begin applying for the subsidy on Nov. 2 via an electronic application process on Yukon.ca.

The deadline to apply is Feb. 29, 2024.