by KEN HECHTMAN

Changes to the Quebec Rental Board’s 29-year-old rent-control formula can be expected to be handed down by December 2003, Rental Board spokesman Pierre Marchand announced earlier this month. "We have no idea yet what the changes will be," says Marchand. "Roche [Consulting Group] is still going through the thinking process." Roche Consulting is the private engineering company with the contract to conduct the public consultation and draft recommendations for change.

The present formula and philosophy behind it are simple enough. "Rent control exists to prevent abusive rent increases while maintaining the quality of the housing stock," Marchand explains. The formula is based on cost recovery: if a landlord’s heating, maintenance, tax or insurance costs rise, they can be passed on to the tenant. Major repairs and renovations can also be recovered, but in the long term. The exact length for recovery time is calculated from the interest rate on bank guaranteed investment certificates, and right now it’s just over 20 years. What’s specifically excluded is any right to catch up to market rates for other apartments in the area. "That’s their problem," Marchand says. "We won’t grant a rent increase just because the landlord across the street is making more money."

Market forces at work

If it ain’t broke, why fix it? "The current method goes back to 1974 and even though we examined it in 1995 and made no changes, now we have to know if the market thinks the method is doing its job," says Marchand.

If the object of a public consultation is to find out what the market thinks, Roche Consulting is on the right track. Participating groups include the Ligue des propriétaires de Montréal, the Corporation des propriétaires immobiliers du Québec, the Association provinciale des constructeurs d’habitations and most of the rest of the real estate industry. Although three tenant groups were invited, Project Genesis, the Regroupement des comités logement et associations de locataires du Québec (RCLALQ) and the Front d’action populaire en réaménagement urbain (FRAPRU), all three are boycotting the hearings.

Lucie Poirier of FRAPRU explains why. "When we first heard about the consultation in the spring, it was only going to look at the calculation to pay down major repairs. Now the mandate has expanded to challenge the relevance of rent control as a whole. This should not be done by a private company with close ties to the Liberal Party, whose executive vice-president (Sam Hamad) is a Liberal cabinet minister," says Poirier. "We would only participate in a public hearing, run by the government, where the government’s position is known in advance."

Marchand defends the decision to privatize the process. "We chose a private company to show transparency, independence and experience," he says. "I personally don’t think there was anything wrong with the public consultation we did in 1995. I think it was good, and the tenants’ groups participated then. But it doesn’t look transparent to some people that the same organization reflects on its own work."

The way it’s being done now doesn’t look transparent to FRAPRU, RCLALQ or the 235 tenants’ organizations who have since added their names to the boycott. "This is too important to do behind closed doors, with a report that won’t be made public," says Poirier.

No peeking

Marchand confirms that the hearings are closed, the report will be confidential and the proposed changes will remain unknown until the Ministry’s decision is made.

Another concern is Roche’s conflict of interest. According to their company Web site, they sell "integrated property management services" to residential landlords. It’s not the bulk of their business but it does mean that when they listen to the submissions of the various landlords’ associations, they may be listening to their own customers. According to Marchand, "We don’t know who Roche’s customers are. That wasn’t the concern of the tender committee. We looked at the experience of the firm, the experience of the project manager, and most importantly, each tendering company’s approach to the problem." Marchand can’t say what was unique about Roche’s approach to the problem of rent control. "All the details and deliberations of the tender process are confidential."

Marie-Claude Dubé, communications director for Roche Consulting, refused to be interviewed for this story and referred all questions back to the Quebec Rental Board.