A new tenancy act passed in the legislature this month – extending a residential rent freeze until 2022 and increasing protections against “renovictions” – earned pushback and support, respectively, from several Northern landlords.
Under the new legislation, the rent freeze begun in March 2020 will extend until the end of 2021, with increases capped at the rate of inflation from Jan. 1, 2022 on.
“Ensuring people have safe, secure and affordable housing is especially important during these unprecedented times,” Attorney General and Housing Minister David Eby told the legislature during a reading of the new law in early March. The goal is to minimize the pandemic’s impact, especially on lower-wage workers, many of whom are renters, he said.
Many landlords may also be suffering because of the pandemic, said Jen Applebaum, a licensed property manager and brokerage owner of Rustic Luxury Home Services, which manages about 100 rentals in the Robson Valley. “That's the other side of it, you can't just keep providing benefits to one side of the equation and have the other side handle those costs.”
Between insurance, utilities and property taxes, rental housing expenses increased by more than 10 per cent in 2020 for Wendy Dyson, who, until recently, co-owned three rental homes with long-term tenants in Valemount. “By limiting the rent increases, landlords such as myself can't recoup what we've lost,” said Dyson.
Last month, Dyson and her husband, both self-employed, sold one of the houses they’d bought to provide income in their retirement. “We were in a negative cash flow position for that rental property, so it wasn't worth keeping. That's one rental unit off the market,” she said.
“As a renter myself, I know how rent freezes can help renters,” said Korie Marshall, of Valemount Affordable Rentals Society in an emailed response. “But as the treasurer of a non-profit board… our costs are not frozen - insurance, taxes, utilities, building costs, maintenance and replacement costs. All of those are increasing each year.”
According to a recent study by Insights West, about 40 per cent of renters in B.C. said they’ve had a hard time paying rent during the pandemic. About 77 per cent of those surveyed agreed an extension of the rent freeze is needed to help renters who have been hit hard by the pandemic, while 66 per cent said landlords shouldn’t have to bear all the cost and that renters should pay too.
Of the landlords surveyed, 47 per cent were supportive of a rent freeze, and an equal percentage were opposed.
McBride resident Linda Fry, who co-owns a rented townhouse in the Okanagan, has absorbed insurance rate and strata fee hikes totalling $500 to $1000 annually over the past couple years.
“In essence, what we've done is a rent decrease,” said Fry, who, prior to the pandemic, had intended raising her tenant’s rent for 2021.
Is it fair to ask rental housing owners to subsidize their tenants, BC Liberal housing critic and MLA for Kelowna West, Ben Stewart, asked Eby during the committee stage of the bill’s passage.
“This is absolutely a statement of government policy and a priority, but it takes place in a context, which is that everybody is feeling the impacts of this pandemic in some way,” Eby said.
Landlords who have invested heavily in their buildings will be able to apply to recoup some costs via a new application process in place later this year, Eby said. “What we’re trying to do is strike a balance.”
Outside of the rent increases, the rest of the changes in the Tenancy Statutes Amendment Act are based on 23 recommendations by the 2018 Rental Housing Task Force following hundreds of written submissions and presentations from British Columbians concerned about residential tenancy laws, policies and services.
The number one recommendation of the task force was to reduce “renovictions,” a process by which landlords evict tenants under the guise of renovating a rental unit, only to re-rent the unit to new tenants at a much higher rent, thereby avoiding rent control measures.
Under the new legislation, landlords will have to apply to the Residential Tenancy Branch (RTB) proving a renovation and vacancy are necessary, as well as show all approvals and permits in place prior to serving an eviction notice. These and other changes will take effect July 1, 2021.
“The goal here is to prevent cosmetic renovations from leading to people’s permanent loss of their homes,” Eby said. “We only want tenants to be facing eviction if there’s no other way to achieve the renovation. It’s really as simple as that.”
About 350 tenants a year dispute an eviction for renovation, but the true number of renovictions is unknown, Eby said.
The desire to end renovictions is understandable, said Stewart, who asked Eby if the new requirements were achievable for landlords.
The conditions a landlord needs to meet to justify an eviction are the same. What changed is the shift in responsibility from the tenants having to convince the RBT of an unlawful eviction, to the landlord having to prove its legitimacy up front, by application, Eby said
The rent freeze is not a surprise, and the application process for landlords will ensure renovations and evictions are done in good faith, mitigating a sometimes confrontational process, said David Hutniak, chief executive officer of Landlord BC, in a press release. However, a “robust” process would be needed involving arbitrators with the specialized technical knowledge to assess renovations, he said.
“If someone is going to end a tenancy for renovations, they should have all their ducks in a row before they do it,” said Applebaum. “I don’t see that as detrimental to anyone. If an owner is legitimately needing to do work on a property, they legitimately need to get things in order to prepare for it.”