Jennifer Geens
Northern News Services

Yellowknife (Sep 09/05) - If you're like most apartment dwellers, the cost of heating your unit is included in your rent, but that won't protect you from rapidly rising fuel costs.

Yellowknife landlords are keeping a close eye on the cost of heating oil, and sooner or later rising oil prices will affect your rent.

NWT Rental Officer Hal Logsdon said that under the Residential Tenancies Act, landlords can raise rents once every 12 months, with 90 days written notice.

The Act does not allow surcharges for services or facilities which are covered by your lease, which may include heat, water or utilities.

So if heat is one of the services included in your lease, raising rent is your landlord's only option to recoup the increased cost of heating the building.

Yellowknife's largest rental company, Northern Property, raised rents in February of this year, citing increased heating costs.

Darren Pelley, regional manager for Northern Property, acknowledged rising fuel costs are a concern.

"There's talk of electrical increases, gasoline is up, and my freight is up," said Pelley. "It's all just snowballing."

But Pelley wouldn't say what action Northern Property might take.

"We are in review of what's going to go on here," he said.

Under the territorial regulations, Northern Property's next opportunity to raise rent would be Feb. 1, 2006. The company would have to notify tenants of a February rent increase by November of this year.

Mackenzie Management owns three properties in Yellowknife. A company spokesperson said a rent increase is imminent.

"Fuel costs are a big part of our operation," he said.

"I looked at what my volume of consumption was, and what the price increase is, and that's what I've tried to factor in.

"I'm just looking at what I'm paying now versus a year ago."

Bruce Dentley, president of Midwest Property Management, said increasing competition in the Yellowknife rental market would keep rents from rising too steeply.

"It has to be reflected in the market in that you can't just decide you're going to charge a lot more than the next guy," he said.

Yellowknife's vacancy rate, which hovered near zero in 2002, rose to an average of three per cent in 2004. That year, vacancy rates were as high as 9.1 per cent for bachelor apartments.

Midwest, which owns four properties in Yellowknife, has been working on making its buildings more fuel efficient.

"However, the (fuel) price increases have been pretty astronomical," said Dentley.

"We can't predict the future but sooner or later it does work its way into the cost of housing."

Yellowknife Dairies Rentals own nine properties and 69 units in the city. Albert Eggenberger said its last rent increase was two years ago. Any new increases will be applied as leases expire and new ones are signed.

Balancing act

The rising vacancy rate coupled with rising fuel costs mean landlords have to do a balancing act when it comes to setting rent prices.

"You can't afford to have empty units around," he said.

Tenants of public housing units owned by the Northwest Territories Housing Corporation won't be affected by increases in heating costs, said Jeff Anderson, chief financial officer.

Their rents are based on their income levels and won't change as fuel costs rise.

But that means the corporation would have to absorb any heating oil price hikes, and that might mean cutbacks for other projects such as home ownership and repair programs.

The price of oil is "something we're monitoring closely," said Anderson.