In the midst of one of the worst housing affordability and supply conditions BC has ever experienced, the provincial government has decided to hike the allowable maximum rent increase in 2019.
The maximum allowable rent increase next year will be 4.5%, which marks the largest increase in rent since 2004 when there was a ceiling of 4.6%. This is the sixth consecutive year the maximum rate has increased.
The new 4.5% maximum rate is based on the percentage increase allowed each from inflation (2%) and the inflation rate (2.5%), which is determined by calculating the 12-month average percentage change in the Consumer Price Index for British Columbia ending in July.
The rate of maximum change is the same for manufactured home park tenancies, with the addition of a proportional amount for increases in local government charges and utility fees.
Landlords who are hiking their rates are required to provide tenants with three full months notice using the proper notification forms.
According to the latest rental market report by Canada Mortgage and Housing Corporation (CMHC), the vacancy rate within Metro Vancouver is just 0.7% – the lowest of any major metropolitan region in Canada.
Some groups have previously called for a rent freeze, but LandlordBC – a group that represents landlord in the province – says “a rent freeze is not a solution.”
“The notion that freezing rents will address current rental housing challenges completely ignores the fact that the net result will instead mean less rental supply as secondary market landlords, in particular, get out of the business or leap to home sharing platforms like AirBnB.
“Owners of existing purpose-built rental buildings will freeze all investment for the maintenance and enhancement of their buildings and, new construction will stop dead; not only because the business case is gone for the developer but, because the banks, pensions funds and CMHC will all say we are not lending you any money to build rentals in this environment. This is the harsh reality and those who are advocating for a rent freeze need to consider the unintended consequences.”
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