The announcement that B.C. is capping next year's annual allowable rent increase at two per cent was welcome news to many renters – but the province is still facing criticism from advocates for landlords and tenants alike.
Premier John Horgan confirmed the 2023 rent increase Wednesday while unveiling a number of measures intended to ease the financial burden on British Columbians facing what he called "unprecedented" inflationary pressures.
Rent hikes in the province are normally tied to inflation, matched with the rate of the Consumer Price Index from the previous summer – a formula that left many tenants anxious they could face a painful increase next year.
"During this extraordinary time, an inflationary increase in rents would be debilitating for 1.5 million British Columbians," Horgan said. "We're not prepared for that. We're going to continue to work with the landlords of B.C. to find other ways to engage with them, to assist with costs, but this year's rent increase will be limited to two per cent."
CALLS FOR RENT FREEZE, VACANCY CONTROL
While a capped hike softens the blow, the Vancouver Tenants Union said members would have preferred to see a resumption of the rent freeze enacted earlier in the COVID-19 pandemic, cautioning that renters are "more squeezed than ever" due to the rising costs of groceries, gas and other necessities.
"We previously had a rent freeze for two years and the sky didn't fall. Landlords carried on with their record profits," the group told CTV News in a statement.
Tenants' advocates have also pushed for the province to adopt vacancy control, a system that ties rent to the unit, rather than the renter, preventing huge jumps between tenancies.
Finance Minister Selina Robinson, who joined Horgan at the announcement, said the issue of vacancy control came up "a fair bit" during the province's Rental Housing Task Force, but provided no indication of whether the government might adopt such a policy.
"The housing minister is looking at what else we might need to do in order to help the 1.5 million British Columbians who are renters. No decisions have been made," Robinson said.
B.C.’s rental market has increasingly attracted real estate investment trusts, who see rental buildings as reliable profit-generators, even though the government decreased the amount of annual rent increases by two per cent in 2018, and has made considerable efforts to crack down on renovictions.
LANDLORDS FACING ‘HUGE CHALLENGES’
Meanwhile, LandlordBC, an organization whose members include everyone from property investment companies to regular homeowners with mortgage-helper suites, said it was "very disappointed" by the province's cap.
"Our sector is facing huge challenges due to inflation and the impacts of the pandemic. These challenges are especially pronounced for the many small landlords who form the majority of rental housing providers in B.C.," CEO David Hutniak said in an email.
"Government can't expect positive results like continued investment in existing rental stock and construction of new purpose-built rental when they place the burden of the rental crisis solely on our sector."
Tenants pointed out the provincial government has already implemented a system that allows landlords to pass on the costs of repairs and maintenance projects to renters – as well as cosmetic upgrades, in some circumstances.
The Vancouver Tenants Union called the policy "a disgrace."
B.C.'s announcement also came hours after the Bank of Canada hiked its interest rate to 3.25 per cent, which could leave homeowners with variable mortgage rates spending thousands of dollars more per year. Horgan insisted the government is conscious of the needs of small landlords facing increased costs as well.
“That’s why we’re continuing to work with the landlords of B.C. to try and find ways that we can meet their needs in the long-term,” the premier said. “But we have a short-term crisis, quite frankly, and 1.5 million British Columbians who rent will benefit from this (cap) – and it still is an increase.”
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