Metro explores the latest trends emerging on the West Coast of Canada.
Cafe Politics: More stringent rent control needed for Vancouver's hot housing market, advocates say
As housing prices spiral upward, rents are going up, pushing low-income and working people out of the city to find more affordable rents.
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Vancouver's hot housing market is putting the squeeze on a largest segment of the housing market – the 51 per cent of the city's population who rent.
As housing prices spiral upward and apartment properties get flipped, rents are going up, pushing low-income and working people out of the city to find more affordable rents.
DJ Larkin, a lawyer and housing campaigner with Pivot Legal Society, says the provincial government needs to improve existing rent controls to better protect tenants.
She said the current rent control – landlords are allowed to raise a tenant's rent by 2.9 percent a year (two percent plus inflation) – should be tied to the unit rather than the tenant, which is how Montreal uses rent control to keep rents down, Larkin said.
As it stands now, when a tenant moves out, the landlord can jack up the rent to whatever the market will bear, she said.
The most recent report by Canada Mortgage and Housing Corp. says the average monthly rent in Vancouver for a two-bedroom apartment was $1,368 last year, up an estimated 3.9 percent from 2014, with the highest rents near the downtown core.
Larkin says the city's rising rents, low vacancy rate of 0.6 percent and limited social housing stock are making it more difficult for people trying to subsist on fixed incomes such as welfare and disability benefits, she said.
“Fixed income people are being squeezed out,” Larkin said. “Rent rates go up year after year but welfare rates are not going up at all.”
A single person on welfare gets $610 a month (the rate hasn't increased since 2007), with the limit on rent set at $375 a month. A person with a disability gets $906 a month.
Larkin said some single-room-occupancy hotels in Vancouver's Downtown Eastside are offering cash incentives for tenants to move out, then re-branding the hotel as student housing and raising the rent to $500 a month or more.
Jean Swanson of the Carnegie Community Action Project, said some SRO hotels recently sold to new owners are offering tenants up to $2,500 to move out.
“That's a lot of money to a person on welfare,” she said. “They get rid of you by buying people off.”
After low-income tenants voluntarily leave, the building owner does modest renovations such as new laminate flooring, then raises rents to $900 a month or more, Swanson said.
But once the low-income person moves out, they have difficulty finding another decent $375-a-month room in Vancouver, she added.
“It's really hard to get a place,” Swanson said. “We need rent controls based on the unit, not the tenant.”
Mukhtar Latif, Vancouver's chief housing officer, said the city has already taken measures to protect tenants and the existing stock of rental housing.
Last December, he noted, the city brought in a new bylaw to protect tenants being evicted for renovations or redevelopment of an apartment block.
Under the new rules, landlords have to pay six months of compensation to a tenants being displaced, tenants also get help trying to find another place with similar rent in the same neighbourhood and the tenants have the option of moving back into the new/refurbished building at a 20 per cent discount off market rent, Latif said.
The city also has signed agreements to encourage building new rental units – the agreements are for 60 years or the life of the building, he added.
“We have initiated a new supply of rental housing – 12,000 units in the last five years,” Latif said. “Council's target is 1,000 units a year of social housing and market housing.”
Latif added: “What we looking to do is provide a range of [rental] housing. At the moment, we've not got enough supply.”
Between 2005 and 2011, only about five percent of new units were rentals, but city initiates have now raised that to 20 per cent, he said.
Latif said the city is in discussions with both the federal government, which is interested in building more affordable housing.
The provincial government, he added, has issued a call for expressions of interest to build new affordable housing projects or the repair/renovation of existing projects, using the funds from selling off many of the older social housing buildings to the non-profits that will continue to run them.
The government is looking to spend $50 million this year and $355 million over five years across B.C.
“Everyone has to come together to get [new affordable housing] projects off the ground,” Latif said.
B.C.'s housing ministry said the current rent control formula is two percent a year plus inflation.
“Limits on rent increases balance landlords’ need for a fair investment return with the need to keep rental housing affordable,” the ministry said in a statement. “We are not currently contemplating any change to this formula.”