Premier John Horgan confirmed the rent increase for 2023 on Wednesday as he unveiled a series of measures aimed at easing the financial burden on British Columbians facing what he called “unprecedented” inflationary pressures. Rent increases in the province are typically tied to inflation, combined with the pace of the Consumer Price Index from last summer — a formula that has left many renters worried they could face a painful hike next year. “During this extraordinary period, an inflationary increase in rents would be debilitating for 1.5 million British Columbians,” Horgan said. “We’re not prepared for that. We’ll continue to work with BC landlords to find other ways to work with them, to help with costs, but this year’s rent increase will be limited to 2 percent.”
CALL FOR RENT FREEZING, VACANCIES CHECK
While a cap hike softens the blow, the Vancouver Tenants Association said members would prefer to revisit the rent freeze enacted earlier in the COVID-19 pandemic, warning that renters are “more stressed than ever” due to rising grocery costs , natural gas and other necessities. “We previously had a rent freeze for two years and the sky didn’t fall. Landlords continued their record profits,” the group said in a statement to CTV News. Tenant advocates have also pushed for the province to adopt vacancy control, a system that ties rent to the unit rather than the tenant, preventing huge jumps between leases. Finance Minister Selina Robinson, who joined Horgan in the announcement, said the issue of vacancy control came up “quite a bit” during the province’s Rental Housing Task Force, but gave no indication of whether the government could to adopt such a policy. “The housing minister is looking at what else we might need to do to help the 1.5 million British Columbians who are renters. No decisions have been made,” Robinson said. BC’s rental market is increasingly attracting real estate investment trusts, which see rental buildings as reliable profit generators, even as the government cut the amount of annual rent increases by two per cent in 2018 and has made significant efforts to to suppress renovations.
OWNERS FACING ‘BIG CHALLENGES’
Meanwhile, LandlordBC, an organization whose members include everyone from real estate investment firms to regular suite homeowners with mortgages, said it was “very disappointed” with the province’s cap. “Our sector is facing tremendous challenges due to inflation and the impact of the pandemic. These challenges are particularly acute for the many small owners who make up the majority of rental housing providers in BC,” CEO David Hutniak said in an email. “The government cannot expect positive outcomes, such as continued investment in existing rental stock and the construction of new rental housing, when they place the burden of the rental crisis solely on our sector.” Tenants pointed out that the provincial government already has a system in place that allows landlords to pass on the cost of repair and maintenance projects to tenants – as well as cosmetic upgrades, in some cases. The Vancouver Tenants Association called the policy “disgraceful.” BC’s announcement also came hours after the Bank of Canada raised the interest rate to 3.25%, which could leave property owners with variable rate mortgages spending thousands of dollars more annually. Horgan insisted the government was conscious of the needs of smallholders who were also facing increased costs. “That’s why we’re continuing to work with BC owners to try to find ways to meet their needs in the long term,” the premier said. “But we have a short-term crisis, frankly, and 1.5 million British Columbians who rent will benefit from it (the cap) – and it’s still an increase.”
