On July 4, we did something we almost never do. We wrote a super-urgent email asking all our readers to stop what they were doing and write to the provincial government ASAP.
In April, the province appointed a Rental Housing Task Force to “advise on how to improve security and fairness for renters and landlords throughout the province.” We attended the task force’s Vancouver session in June. While popular with renters, the event had very few landlords or property managers. Though this free event was supposedly “sold out,” 60+ people were waitlisted, and most of the tables designated for landlords were empty. It was clearly an unbalanced consultation.
Why it matters?
Imagine being forced to rent out one of your units at the same rate as to a previous tenant, after you’ve spent hundreds of thousands (even millions) upgrading an old building. Imagine a rent of 20 years ago sticking “with the unit” if someone moves out. We’re concerned that the Task Force isn’t truly interested in hearing from landlords. We anticipate that they’ll make sweeping changes to the Residential Tenancy Act that will deter owners from upgrading buildings and stop the construction of purpose-built rentals. If enacted, these changes could ensure the ongoing deterioration of the rental stock, negatively impacting your investment.
If you took the time to let the government know your thoughts, thank you! For a sampling of the responses, check out the column below.
Municipal costs including taxes, water, sewer and scavenging fees rise unabated and well above inflation rates. Insurance costs have doubled in the last 10 years. Basic maintenance rises yearly, as of course the building is old. I do not have the ability to redevelop the site as the City of Vancouver has a moratorium on redevelopment in my zone. Why?
Because they are well aware that private individuals like myself are in fact providing the only affordable housing in this city.
I am compassionate, but providing social housing is not my remit; it is yours. I will be forced to hand out rent increases for the very first time this year, and I am not happy to be doing so.
Simple ideas can change the world. The overall concepts are mainly drawn from historical precedent, reinterpreted into twenty-first century forms. The ideas are straightforward, but their implementation requires the cooperation of all levels of government and a wide range of public and private agencies. This is a market process and requires open market forces to be fully operational. Rent restrictions and affordability criteria operationalized in property transfer rules are blunt instruments that I believe will deter innovation.
I believe that the best application of affordability efforts is in the promotion of innovation rather than restriction,
and I would welcome the opportunity to present such alternatives to the Task Force.
— Developer of rental housing
… It is a universal and strongly held view in both our organization and our industry that the government must retain two critical elements of the current Residential Tenancy Act:
- the annual allowable increase of 2% + CPI (we note some stakeholders suggesting the annual allowable increase should be changed to just CPI); and
- rent controls tied to the tenant not the unit, i.e., the ability of a landlord to negotiate a new tenancy at tenant turnover on the basis of the market and the actual cost to deliver safe, secure rental housing.
Any reconfiguring of either of these existing provisions under the Act, in whole or in part, will cause irreparable long-term harm to both renters and landlords.
The economics of continuing to provide rental housing will unravel, as will the incentive and ability to invest in one’s property. Further, it will be impossible to build any business case for the construction of new purpose-built rental housing. This in our view is the only way in which the private sector can address the critical shortcoming in supply.
— Developer of rental housing
If you study markets where there’s no rental control, the markets stay balanced. Alberta and Texas are good examples of this. The rents are reasonable because there is a fair market for landlords and tenants. The Residential Tenancy Act should be reasonably studied to assess fairness.
The rental industry in B.C. is one of the more highly regulated and controlled industries in the province. There are perhaps 20 tenants to each property owner, which could pose obstacles when trying to hear landlords.
If the interests of landlords are not heard, their investment capital would simply go some place else, leading to no new rental construction.
We appreciate the challenges government has balancing landlord and tenant concerns. It is essential that market principles be allowed to function. Political interference only serves to drive up costs and act as a disincentive for private investors to provide new or updated/upgraded residences for rent. Having been in the real estate industry since 1980,
I have personally seen how rent controls, development cost charges and restrictive tenancy regulations have only served to increase rents and discourage development.
I am deeply concerned about many issues which the provincial government appears to be considering for purpose-built rental buildings which are privately owned and operated.
These ideas have serious consequences which will hurt renters for generations to come.