Vancouver Island landlord challenged by maximum allowable rent increase

Rent controls make it hard to keep up with increasing costs of property management

Paying bills has become a challenge for a Courtenay landlord who is having a tough time generating enough rental income from his eight-plex.

The man, who wishes to remain anonymous, says a rental cap of 2.6 per cent provides serious challenges when it comes time to pay for property tax, water, dumping fees, sewage and insurance.

“It’s double digits but rent increases are .026.”

Which is about a $22 bump on his lowest monthly rent of $850. The high end of his rents are $1,250 for a two-bedroom.

The landlord said his water bill, which was about $400 six years ago, has jumped to $800-plus. Four years ago, he said his property tax increased 37 per cent.

“I can’t pass this onto the tenants,” said the landlord, noting property tax was the one expense that didn’t increase this year.

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Recently, two tenants moved out, so he could increase rents by $300 a month.

“The new tenants are the ones that are paying for things, unfortunately for them, and the old tenants are relaxing in that.”

The landlord would prefer to not raise the rent on three of his tenants who are pensioners.

“They figure that landlords are in it for nothing but money. I try to make my place as beautiful as possible. I’ve had tenants tell me, ‘If it wasn’t for you, we wouldn’t be living here.’

“I’m doing a little bit better now, because I was able to rent my apartments out for considerably more, which I’m forced to do, simply because I can’t bring my rents up any more than .026,” he added. “I don’t mind the .026 if I didn’t have these huge payments.”

“It (renting suites) can be a challenge,” said Courtenay Mayor Bob Wells, who was once a property manager. “There’s always risk in any business.”

Wells notes that landlords, unlike renters, own the asset. He also notes that, over the last 30 years, a housing trend indicates the market, despite a few dips, has generally gone up.

The landlord recalls 26 people complaining at the Legislature about a 4.5 per cent rental increase, asking instead for no increases.

“That would be fine if, every year, we didn’t have all these increases. My rental increase is still short of my water bill increases, and I have sewer, garbage and everything else. My insurance went up 18 per cent the last six years. So I’m now paying $700 a month for insurance. People don’t see those kind of costs.”

Previous rules had allowed landlords to raise rents by the cost of inflation plus two per cent. However, in 2018, the B.C. NDPs eliminated the two per cent add-on.

David Hutniak, CEO of LandlordBC, said the organization “vigorously opposed” the change.

“We advised the government at that time that this decision would cause serious harm to landlords and renters alike by negatively impacting the long-term viability of the rental housing industry in B.C.,” Hutniak said. “Unfortunately, the government elected to proceed with their decision. It was our view at the time, and it remains the same today, that the result would be to push landlords out of the industry and/or into home-sharing platforms like Airbnb, and discourage the building of new purpose-built rental development. We have evidence, at least anecdotally, of all three scenarios having occurred.

“While our industry is sensitive to the challenges renters are facing, the CPI-only (Consumer Price Index) formula is inadequate when compared with the actual cost to provide rental housing,” Hutniak added. “Our costs are increasing significantly in excess of what we can increase rents.”

In a statement, the Ministry of Municipal Affairs and Housing said government’s approach is focussed on making the rental system work better for everyone involved.

“This means providing relief to the 1.5 million renters in B.C., while ensuring landlords can maintain their rental properties. While we need to protect renters, we also want to avoid unintended consequences that impede the ability of landlords to provide high-quality housing for people.”

When the rent increase cap was lowered to the rate of inflation, a Rental Housing Task Force recommended government work with landlords to revise the process to apply for limited additional rent increases to help pay for maintenance and repairs.

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“The previous process for seeking additional rent increases only gave landlords the opportunity to recover investments for unforeseen repairs or maintenance,” the statement said. “The Province has worked with landlord groups on a new way to help ensure important capital investments are made in rental properties. The changes would mean landlords will be able to apply for costs incurred in the previous 18 months, and there will be a cap on the amount to ensure that rent increases are not unreasonable.”

LandlordBC is delivering a series of landlord education workshops across B.C. Workshops will be held in Victoria and Nanaimo in November. Preregistration is required.



reporter@comoxvalleyrecord.com

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