Amid an already challenging and costly rental market, property owners in British Columbia are set to have the ability to ratchet up rents for current tenants by 3.5%, a substantial increase from the current 2% limit.
While this adjustment still falls below inflation levels for the consecutive second year, it represents a significant departure from previous policy. Prior to 2018, landlords were permitted to scale up rental costs based on inflation, or even go beyond, to inflation plus two percent.
In acknowledging the financial strain on both ends of the property ladder, Housing Minister Ravi Kahlon noted, “Renters are grappling with financial hardship at the moment; this is also true for some landlords who are trying to stay afloat amid rising interest rates.”
Despite the potential relief provided by the new rental cap, landlords were yearning for an upward ceiling in the region of the 5.6% average inflation rate calculated for the current year. David Hutniak, CEO of Landlord BC, raised the red flag on escalating costs, cautioning that these forces might discourage landlords from leasing their properties.
Countering critics, Hutniak pointed out that landlords are not exempt from the pressures of inflation and fluctuating interest rates. He highlighted the uncertainty surrounding ever-changing rental increment allowances, suggesting that property developers might hesitate to invest in purpose-built rentals without a clear indication of yearly increases.
However, for tenants, who are already grappling with record-high rents, any approved increment can be burdensome. This anticipated surge in costs equates to several hundred additional dollars annually for most renters.
Douglas King, a housing advocate with Together Against Poverty in Victoria, expressed concerns about the potential blow to tenants’ budgets. He said, “This bump will hurt many renters, particularly those who are already operating on a tight budget.”
Central to this dispute, King believes, is the need for an upper limit to control how much landlords can spike up rents when switching tenants, alleging increased efforts by landlords to evict tenants to leverage maximum rent.
In setting rent caps, Premier Eby acknowledged the difficulty in balancing both parties’ interests. He explained that both the escalating costs confronting renters and the piling expenses burdening landlords need to be considered. Additionally, the decision by some to cease renting their properties adds another layer of complexity to this issue.
From January, pending delivery of a three-month prior notice, the new rent increments will become applicable.
