City of Vancouver staff are recommending stiffer rent control rules for privately owned single room occupancy hotels after rents were raised on hundreds of units of low-income housing over the past two decades.
In a report that will come before council on Wednesday, city staff are recommending that vacancy control be applied to privately owned SRO buildings.
It’s a departure from B.C.’s current rent laws, which limit how much rent can be raised annually for tenants who remain in the same units but allow rents to be raised an unlimited amount when a tenant moves out and a new resident moves in.
Vacancy control ties rent control to the unit, not the tenant, meaning rent increases are limited even if tenants change.
Tenant advocates have been lobbying for vacancy control to be applied to all rental housing in B.C.
But Allison Dunnet, a City of Vancouver planner, said her team is recommending that vacancy control only be applied to SRO hotels. The century-old hotels with tiny rooms, no kitchens and shared bathrooms are common in the Downtown Eastside and other parts of downtown Vancouver, and they house many of the city’s poorest and most vulnerable people.
Vacancy control regulations have been implemented in cities across North America and can halt rapid loss of affordable housing and the displacement of low-income tenants.
But rental developers and property owners have strongly lobbied against vacancy control in B.C., saying it will discourage investment in new rental buildings. A form of vacancy control was in place in B.C. from 1974 to 1983.
Around half of Vancouver’s SRO buildings are owned by the province, non-profit housing providers or by Chinese benevolent societies. But around 100 buildings are still in private hands, and rents at those buildings have risen steadily over the past decade. The proposed vacancy control model would only apply to privately owned SROs.
Wendy Pederson has advocated for SRO tenants for years and is currently the executive director of the SRO Collaborative. She said a previous bylaw enacted in 2005 prevents SRO buildings from being redeveloped into condos, offices and tourist hotels.
But vacancy control is needed to further protect tenants, she said.
“SROs are a last resort before homelessness,” Pedersen said. “If rents continue to skyrocket in this housing stock, more tenants will be forced into homelessness.”
During a technical briefing for reporters, Dunnet said the root problem is that social assistance rates, which allow just $375 a month for rent for an individual, don’t provide enough revenue to keep the buildings in good shape. That means tenants are either living in very rundown buildings or are being displaced as rents rise.
In 2019, Dunnet said, rents in private SROs were an average $561 a month. The current income assistance rates provide $940 a month for rent and all expenses.
Over 700 rooms now rent for over $700 a month, and rents were more likely to go up after the buildings changed owners, Dunnet said.
In one case study her team completed, a building was largely occupied by low-income tenants between 2011 and 2014 and rents ranged from $380 to $400.
After the building changed hands in 2014, the landlord completed minor repairs that didn’t require any building permits. There was significant tenant turnover and, by 2015, the rooms were renting for an average of $562. By 2019, rents had risen to $750 a month — meaning rents had risen by 13.5 per cent per year.
If vacancy control isn’t put in place for privately owned SROs, rents could rise 37 per cent over the next 10 years, to an average of $769 a month. That could lead to increased homelessness, city planners warned in their report.
If council votes to approve vacancy control for SROs, Dunnet said the city would use its business licensing powers to implement the rent control measure. It would be the first time the city has ever used those powers to regulate rents, which is normally under the control of the provincial government.
Dunnet said the city would work with SRO owners to help them access grants, federal funding and rent subsidies to close the gap between inadequate social assistance rent rates and the revenue needed to keep the buildings in good shape.
Landlords would also be able to apply for an exemption from vacancy control if major work needed to be done to the buildings, similar to the Rental Tenancy Branch exemption that landlords can apply for if they have to do major repairs and need to raise rents to cover the expenditure.