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Housing

House Sales Are Booming in Rural BC — and Renters Are Getting Slammed

As landlords cash out their ‘investment’ properties, many tenants are losing affordable homes.

Alex Cosh 22 Jul 2021 | TheTyee.ca

Alex Cosh is a writer who lives and works on the traditional territory of the Tla'amin people. He writes for PressProgress, the Powell River Peak and Canadian Dimension. Follow him on Twitter @AlexCosh_.

Until recently, Rick Dupperon and his family lived in a three-bedroom house in Creston, B.C., paying $900 a month. That ended in early March, when his landlord told Dupperon that he planned to sell the property and gave him two months’ notice to leave. Dupperon and his family moved out on June 1.

Dupperon, still friends with his former landlord, did not anticipate how difficult it would be to find a new place at an affordable rate. “We’ve moved a fair number of times over the years, but what got us in a pickle is there’s just nothing available,” he says.

Dupperon and his family are staying in a camping trailer in a relative’s backyard. Dupperon, who receives disability assistance, has had the $700 shelter portion of his benefit cut because a trailer is not considered a permanent dwelling. It will only be reinstated, he says, if he finds a new place to rent.

The problem is that the few places for rent are mostly significantly more expensive than his family’s previous rent.

“We’re seeing everything from $1,135 up to $2,000 or more a month,” Dupperon says. “We’re looking constantly, everywhere we can. We talk to everybody we can.”

Dupperon and others facing similar hardships are being affected by rising property values and sales. Data compiled by the Kootenay Association of Realtors, which encompasses Creston, shows the average sale price for residential units was more than $450,000 in May, compared to just under $275,000 for the same month in 2012. The average sale value for May 2020 was just under $375,000.

With 371 homes sold, sales activity in the region in May 2021 was, unsurprisingly, much higher than May 2020, one of the worst months of the COVID-19 pandemic, but also 26.3 per cent higher than the 10-year average for that month.

This is a trend across much of rural B.C. — and, in fact, much of Canada — where rising property values have been motivating landlords in rural communities and small towns and cities to sell their rental properties, often to buyers moving in from cities.

This housing boom, frequently reported on in the context of middle-class buyers being squeezed out of formerly more accessible markets, is also displacing tenants in every corner of B.C., according to renters, realtors and property owners.

Many tenants are now being forced to compete for a dwindling supply of rental units at much higher costs.

According to Chuck Bennett, president of the Kootenay Association of Realtors, the vast majority of buyers are coming from within the West Kootenays area rather than major cities. But, he says, many only moved to the area recently and are often first-time buyers.

“For younger buyers, a lot of them we’re seeing support from the parents, so wealth has transferred from the baby boomers who have quite a bit of money,” Bennett says. “There’s a lot of equity in the properties in the cities. I think it’s making its way out into the rural areas.”

Demand is fuelled by low interest rates, the appeal of easy access to outdoor activities and increased options for remote work. These buyers, who plan to live in the units rather than rent them out, are motivating some landlords to cash out of the market.

“There’s talk of the bubble coming to an end,” says Bennett. “So we are seeing sellers say, ‘Hey, you know what, it’s time, let’s put the rental property up for sale.’”

A landlord from the Kootenays who spoke to The Tyee on condition of anonymity says he’s seen the assessed value on several of his properties go up by a combined total of more than $100,000 in the past year.

While this landlord isn’t planning to sell any of his properties, he says he’s seen many others in the region who are — and this trend is driving up rents even when the property remains a rental.

“When a property is sold to an investor, there’s a lot of pressure on that investor to get the right percentage return, so they’re going to try to figure out a way to bring rent up to market values,” the landlord says.

In some cases, he says, unscrupulous landlords will evict tenants from their units using specious reasons in order to raise the rents after they’re out. These tenants enter a market where few units are available, and what’s available is often priced higher than what they can afford.

Some landlords, he adds, are cognizant of these problems. Another landlord in the area buys and rents properties to tenants for a maximum of 30 per cent of their income, for example.

But on the whole, tenants are feeling the pinch. The Canadian Rental Housing Index, which tracks rent affordability across the country, currently lists the Kootenay Boundary, Central Kootenay and East Kootenay regions as all “severely unaffordable” or “unaffordable” for the two lowest income groups.

According to the Canadian Mortgage and Housing Corp., the vacancy rate for Nelson — the “Queen City” of the Kootenays — was 0.5 per cent in October. The CMHC only tracks average rents for purpose-built rental apartments, which increased in Nelson from $710 in 2013 to $927 in 2020.

For some renters, the pressure is less direct but still acutely felt.

Gisele Colbert, who rents a house with two suites in Winlaw with her son for $2,000 per month plus utilities, said her landlord recently communicated his wish to increase the rent, despite a provincial rent freeze in effect until Dec. 31.

Colbert, who’s lived in the region since 1982, says the mere suggestion has left her and her son with the impression that the landlord wants them gone so he can increase the rent significantly for a new tenant. She’s feeling pressure to search for a new place.

“Up to a year ago, people would come to me and say, ‘Hey, you know I’ve got this place, are you interested?’ But now it’s just dead,” Colbert says. “It’s like everything is way beyond our affordability.

“Landlords need to realize that when you rent a home, it becomes your home. It’s where you feel at peace or not,” she adds. “People will flippantly say, ‘I guess you need to move,’ but this is my home, and this is where my children and my grandchildren live and my whole community, so it’s not that easy, and I also work here.”

960px version of GiseleColbertProfile.jpg
Gisele Colbert has lived in the Slocan Valley for almost four decades. Now she’s worried rising rents will push her out. Photo by Bobbi Barbarich.

Dupperon’s and Colbert’s experiences in the Kootenays are unfortunately familiar to renters everywhere from Vancouver Island to the Sunshine Coast to northern B.C. and the Interior. As recently reported by Capital Daily, some renters in Sooke are being forced into hidden homelessness amid the district’s red hot real estate market. Renters in Kelowna are experiencing similar difficulties.

Provincial legislation states that when a property is sold, the buyer becomes the new landlord, and the tenant must be allowed to stay unless the buyer wishes to occupy the unit themselves or use it for other purposes.

The buyer can do this either by submitting a written request that the seller end the tenancy, or by serving a two-month notice to the tenant after taking possession of the property.

There is no specific data showing how many renters are being displaced amid the current boom. The Residential Tenancy Branch does not keep track of how many properties are registered as rentals. Similarly, the CMHC does not keep track of the number of properties that switch from being rentals to primary dwellings after they are sold.

A spokesperson for LandlordBC, a lobby group representing landlords, said the group regularly loses members. In a statement, LandlordBC blames this year’s attrition on the effects of the pandemic and provincial measures aimed at protecting renters over the past 18 months, including the rent freeze, and the eviction moratorium, which ended last August.

Crisis in the North

Prince George, a city that once ran an advertising campaign promising Vancouverites an affordable lifestyle, is also seeing property values rise, leading to an increase in sales that is displacing renters.

According to data supplied to The Tyee by the BC Northern Real Estate Board, the average sale price for a single-detached home in Prince George in May 2016 was just over $229,000. That figure increased to over $447,000 this May.

Home sales across the northern region in May were 40.3 per cent higher than the five-year average and 43.1 per cent above the 10-year average, according to the real estate board’s website.

Breanne Cote, a realtor in Prince George with Royal LePage, said this spike is motivating owners to sell — often, as in the Kootenays, to first-time buyers. These buyers are often moving from bigger cities like Vancouver and Kelowna and will occupy the properties themselves, forcing tenants to leave, she says.

“Tenants have been in properties for five, 10, 15 years, and the rental increase per year is so minimal that their rent has been a certain dollar number for a lot of years, and now if they have to go and find a new place, they’ve not been able to find something for that same price,” said Cote.

The average rent for purpose-built apartments in Prince George was $906 in 2020, up from $678 in 2010. RentBoard.ca currently pegs the average rent for a one-bedroom apartment in the city at $1,255.

However, Cote added, houses with “mortgage helper” suites in the city are currently popular, meaning those rental units are likely to become available. Cote also pointed to purpose-built rental apartments currently being built in the city, which she predicts will help alleviate pressure on the rental market.

Nonetheless, the current market is making an already difficult situation even harder for low-income and precariously housed renters in the city, according to Laila Botelho, who has experienced homelessness several times since she was 17.

With tenants being displaced through property sales, Botelho explained, renters are chasing a shrinking supply of rental units, many significantly more expensive than working-class renters can afford. That also means landlords are able to be pickier with prospective tenants, and exclude those who, like Botelho, receive income assistance.

“A big thing that seems to be a problem is that landlords seem to expect that every single tenant that applies is going to be making three times the rent,” said Botelho, who supplements her income support working in retail.

“[Another] problem is the stigma that landlords have towards people on income assistance, and people who have aged out of foster care,” she adds.

Rental clouds on the Sunshine Coast

Located two ferry rides away from the Lower Mainland at the northern end of the Sunshine Coast, Powell River is also seeing a significant uptick in housing sales, resulting in displaced renters who can’t find affordable accommodation.

Neil Frost, president of the Sunshine Coast Real Estate Board, said that back in 2016 buyers in the region could purchase entry-level homes for under $200,000. Now, starter homes are selling for $450,000 and up. This year, the qathet region, where Powell River is located, saw record-setting residential sales figures for February and March, and strong sales in April and May. The region set yet another record for sales in June 2021.

Like the Kootenays, Powell River attracts buyers because of its relative affordability for larger properties and quality of life. Frost said around 50 per cent of buyers are coming from out of town, a figure consistent with the past several years, with many current buyers looking for housing, not investment properties.

All these factors, says Frost, have given some property owners good reasons to sell.

“One can only assume. We’re at a peak. I’m not saying it is the peak, but it’s a great time to sell,” he says.

However, the result sees forced tenants out into a market with rising rents and very limited supply. CMHC data show average rent for a purpose-built rental apartment was $606 in 2010, climbing to $856 in 2020. Since 2018, the Canadian Rental Housing Index has listed the region as “unaffordable” for those on low incomes.

“I’ve seen anecdotally people seeking co-habitation and roommates, whereas before you didn’t see that as much, or as much appetite for it, but rental supply is limited,” says Frost. “It’s very concerning.”

Renter displacement and constrained supply means that tenants who have to leave their homes for other reasons are also struggling to find new places to live. In an interview with the Powell River Peak in May, local renter Margaret Gisle said a dispute with her landlord resulted in her being evicted from a rental suite that she had lived in since 2016, paying $500 per month.

While searching for a new home, Gisle, who receives disability assistance, said she saw shared bedrooms listed for between $600 and $900 per month. Unable to find an affordable place to stay, Gisle moved into a motel with the help of Lift Community Services, a local non-profit.

“Because of the housing crisis, folks who have to leave have nowhere to go,” Carlie Tarlier, a homelessness prevention outreach worker with Lift, told the Peak. “I give out tents and sleeping bags to typical folks who are on some form of assistance, whether it’s people with disability or pensions.”

Back in the Kootenays, Rick Dupperon is hoping to find stable, affordable housing for his family before the winter comes.

While looking for housing, Dupperon was also struggling to figure out a way to visit his mother, who lived in Saskatchewan and was in palliative care. He wanted to see her before she passed.

Dupperon says his family’s religion has given them solace in these difficult times.

“If there’s things we can’t handle, or don’t know what to do, we leave it to our father in heaven to help us,” he says.  [Tyee]

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