A week after announcing landlords could increase rents by 4.5 per cent, Victoria has decided, instead, to limit increases to the rate of inflation.
That means that effective Jan. 1, 2019, the annual allowable rent increase will be 2.5 per cent.
“It’s simply not sustainable for renters, many of whom are on fixed incomes, to see their rent increase by more than inflation each and every year,” said Premier John Horgan, in a press release. “We have to eliminate the risk of such huge increases for renters. Our new approach strikes a balance between giving relief to renters while encouraging people to maintain their rental properties.”
The previous formula, set in 2004, allowed annual rent increases of two per cent plus inflation.
As a result of eliminating the additional two per cent increase, people living in a $1,200 per month apartment (average rent in B.C.) could save up to $288 in 2019 over what they could have paid under the old formula, according to Victoria.
“We recognize supply is key to bringing down rental costs in the long term, but renters have told us they are hurting and need help today,” said Selina Robinson, Minister of Municipal Affairs and Housing. “That’s why we are taking careful steps to address the housing crisis and ease the pressure on renters, while also making sure that landlords have the tools they need to continue to invest in their rental properties.”
The Residential Tenancy Branch will work closely with landlord advocacy groups on expanded circumstances under which landlords could apply for an additional rent increase to reflect the costs of maintaining their rental properties.
“Our Rental Housing Task Force members have heard time and again that renters are struggling to pay yearly maximum rent increases, while basic repairs and building maintenance are left undone,” said Spencer Chandra Herbert, Rental Housing Task Force chair and Premier’s Advisor on Residential Tenancy. “Taken together, these changes will make rent more affordable for British Columbians, while also helping ensure needed repairs are completed to maintain and improve rental housing.”
The Rental Housing Task Force is made up of
* Spencer Chandra Herbert, MLA for Vancouver-West End;
* Adam Olsen, MLA for Saanich North and the Islands; and
* Ronna-Rae Leonard, MLA for Courtney-Comox.
The Liberals, however, say government should focus on increasing the supply of housing.
“What you have here is yet another NDP policy failure straight out of the gate,” said Liberal MLA Todd Stone. “John Horgan broke his promise to provide a $400 renter’s rebate, and instead of taking action on this rent increase policy weeks ago, putting undue stress on renters and landlords alike, he waited until today.”
In contrast to the 4.5 per cent allowable increase announced earlier this month, the policy will now only allow landlords to increase rent by inflation.
“Landlords are now being told that when they need to do maintenance and renovations they will have to apply to the government to be able to afford it,” added Stone. “The arduous bureaucratic process to approve them will result in landlords having little incentive to renovate ageing housing stock in cities like Vancouver and Victoria.”