The rent cap is well below the rate of inflation
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The B.C. government has set next year’s maximum allowable rent increase at 3.5 per cent, well below the inflation rate.
That might be welcome news for renters struggling to keep up with skyrocketing costs of living, but also poses a challenge for some landlords.
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“We are not immune to inflation,” said David Hutniak, CEO of Landlord B.C. that represents about 3,300 property owners in the province. “Just trying to maintain the buildings and provide the housing that we do, we’ve seen core operating expenses — insurance, utilities, taxes — gone through the roof.”
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He said he’s sympathetic to the challenges renters are facing, but noted landlords have been constrained by zero or below-inflation increases since 2020.
“The issue is, on a cumulative basis, our landlords just keep falling further and further behind,” he said. “In talking to our members, there’s so many of them that are in a negative cash-flow situation year-after-year. That’s just not sustainable for any business.”
In a statement, the government touted the 2024 rent cap as well below the average rate of inflation of 5.6 per cent.
It applies to rent increases starting Jan. 1, 2024. Landlords can only increase rent once every 12 months, and have to provide three full months’ notice to tenants.
Speaking during an unrelated news conference in Kamloops, Premier David Eby said the 3.5 per cent allowable increase is below the rate of inflation and balances the concerns of tenants facing ever-increasing rent and landlords who, squeezed by higher interest rates, could decide that it’s not worth renting anymore.
“We’re trying to find that balance for landlords and for tenants. It’s an incredibly challenging area.”
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Eby noted that under the previous B.C. Liberal government, the allowable rent increase was inflation plus two per cent and the B.C. NDP did away with the additional two per cent.
“Across the country, costs have been increasing — especially for housing — at a rate that’s unsustainable for many people,” said Housing Minister Ravi Kahlon in a statement. “We know that’s the case for both landlords and renters, and that’s why we’ve found a balance to protect renters while helping to keep rental units on the market.”
A recent report by rentals.ca showed that between July 2022 and July 2023 the rent on an average one-bedroom unit in Vancouver — where rental prices were the highest in B.C. — climbed 16 per cent. Burnaby, the second-most expensive municipality for rentals, posted a nearly 20-per-cent, year over year increase.
The rentals’ website says the average asking rent in the province jumped by nearly 10 per cent compared with the previous year.
That’s for rental units that are new to the market or have turned over to a new tenant.
During COVID-19, a rent freeze was put in place starting March 2020 and in 2021. In 2022, the max rent hike was 1.5 per cent, similar to inflation.
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For 2023, to combat rising inflation, the B.C. government capped increases at two per cent, below the 5.4 per cent inflation rate.
The rent increase cap doesn’t apply to commercial tenancies, non-profit housing tenancies, co-operative housing and some assisted-living facilities.
— with files from Katie DeRosa
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2023-09-11 22:14:27Z
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