Tenants to Get Good — or Bad — News on Rents Next Month

The B.C. government is considering how high to allow residential rents to rise next year and will announce its decision in early September.

“We know that it’s a challenging time for people across British Columbia,” Housing Minister Ravi Kahlon said this week during an event breaking ground on a project in Delta that will provide 152 affordable units.

“The decision we’ll be making will be finding a balance between making sure that landlords can recoup some of the costs, the increased costs that they’ve seen with rising interest rates, while at the same time the renters can continue to find some level of affordability in this very, very challenging housing market that we have,” Kahlon said.

In recent years the government has capped allowable increases at or below the rate of inflation as measured by the consumer price index, which Kahlon said was more fair than the previous BC Liberal government’s policy of setting the increase at the rate of inflation plus two per cent.

Statistics Canada reported Tuesday that the CPI was three per cent higher in B.C. in July than it had been a year earlier.

“Of course through the pandemic because of the challenges we had zero per cent increases,” Kahlon said. “We had two per cent last year, which has helped many renters, but we know other renters that are coming new into the market have faced really, really high increases so they’re paying much more in rent.”

About one-third of households in B.C. are renters. The caps only apply when existing tenants stay in a rental, allowing landowners to set rents for new tenants or new units at whatever the market will bear.

A result is that average rents have risen much faster than the caps the government has set. According to figures the website Rentals.ca released this week, the average rent for a one-bedroom unit had gone up in the last year by 9.7 per cent in Surrey, 16.2 per cent in Vancouver and 19.6 per cent in Burnaby.

Vancouver is by far the most expensive rental market in Canada, with an average rent of $3,013 for a one bedroom and $3,918 for a two-bedroom unit.

Kahlon said the steep rise in average rents reflects the number of new people entering the market who are paying substantially higher rents.

“I hear from people who say to us ‘Thank you, we are now seeing the rates a little lower because of the cap,’” he said. “But I also hear from young people who are saying ‘I just got into the rental market, I’m paying $2,600, $2,700.’ It’s a real challenge.”

Kahlon said he’s had discussions this week with his federal counterpart, Sean Fraser.

“We need to do a better job of tying our immigration goals to our housing targets, because if we don’t do that we’re going to have continued pressures on our housing market and it’s going to put continued pressure on rents,” he said. “The amount of units we have coming online are just not keeping up with the demand that we have. It’s very simple economics and we’re facing that challenge.”

Advocates for renters have long called for introducing vacancy controls where allowable rent increases are tied to the unit instead of the tenant, a policy in place in other jurisdictions that they say would keep average rents lower.

Premier David Eby, a former housing minister, has in the past opposed vacancy controls saying that they could discourage developers from creating new rentals.

Groups representing landowners have consistently argued for larger allowable rent increases that would allow them to cover increasing costs.

A spokesperson for the BC United caucus, renamed from the BC Liberals earlier this year, declined to make anyone available for an interview, but said the party remains focused on the need to encourage a substantial increase in the supply of units available for rent.

The province is planning to announce the maximum rent increase for 2024 in early September to give owners enough time to provide three-months notice to tenants for increases that will kick in at the start of the new year.