BC rejects request for vacancy control in Victoria, group says rent increase is stopgap

BC rejects request for vacancy control in Victoria, group says rent increase is stopgap
BC rejects request for vacancy control in Victoria, group says rent increase is stopgap

Anti-poverty group questions government claim that rent increase caps would discourage new construction

A renter in Greater Victoria looking for a new place to live last year would pay an average of 41 percent more than those who did not have to leave their home.

According to the Canadian Mortgage and Housing Corporation (CMHC), this figure is an indication of the gap in affordability between homes in the Capital region that were vacant in 2023 and those that were still occupied.

It also shows how the market could become even more expensive for renters who are forced to move. The CHMC reported that in 2022, a vacant two-bedroom apartment in Greater Victoria rented for 33 percent more than an occupied unit in the same building.

Despite declining affordability, the province has again blocked a call from Victoria to impose a cap on how much rents can increase between leases.

In response to questions from Black Press Media, the British Columbia Ministry of Housing said it has no plans to implement vacancy controls.

It is the third time in as many years that the province has rejected Victoria City Council’s request for such a policy. Most recently, the capital voted to support a resolution from the Union of BC Municipalities calling on the province to impose vacancy controls on “financial landlords,” such as real estate investment trusts and other corporate actors.

“The government has considered limiting vacancies and has concluded that this would have the unintended consequence of reducing the affordable rental housing stock, as it would discourage new developments,” a ministry spokesperson said.

The ministry initially said it was following the 2018 recommendation of the housing task force not to conduct inspections. It also said it supports tenants by, for example, limiting the annual allowable rent increase to an amount lower than inflation and cracking down on illegal renovations.

Asked whether the province has looked at vacancy audits since 2018, the ministry said it is continually assessing opportunities to provide more housing and affordability to the rental market. It added that the government is committed to striking a balance that ensures tenants have stable housing and landlords can rent out their units with confidence.

“Our approach is aimed at making the rental system work better for everyone involved. Landlords own their property and have the right to rent units at selected rates,” the ministry spokesperson said.

A Victorian anti-poverty agency says that, contrary to the province’s claims, a lack of vacancy controls is to blame for the poor availability of affordable housing.

“By having such strict rent control during lease terms, but no rent control at all between lease terms, we’ve essentially created an environment where we incentivize landlords to target their most stable, long-term tenants, and often that turns out to be seniors who can’t afford a change in their rent,” said Douglas King, executive director of Together Against Poverty Society (TAPS).

That has created a situation where the supply of subsidized housing can’t keep up with the number of low-income people being pushed into an overpriced market, he said. TAPS this month helped a low-income client who was evicted from her Esquimalt apartment, just days before new provincial rules limiting no-fault evictions went into effect.

After the building was purchased by an owner who decided to move into her apartment, King said the single mother had to sleep on the couch for more than two months to avoid homelessness, which would have resulted in the abduction of her child, while she waited for subsidized housing. The case shows how those forced out of their cheaper apartments can’t afford market rents but also aren’t captured by public housing the way they were a few years ago, King said.

“We just see that the system is no longer working the way it used to,” he said.

TAPS sees vacancy audits as a stopgap measure to prevent “catastrophic” rent increases, such as costs going up 20 per cent in a year. King said it’s frustrating that the province hasn’t even considered the regulation as an interim tool while B.C.’s many housing supply-boosting policies take effect in the coming years.

“Vacancy control would be the cornerstone that would really be the most effective way to keep rents at the same level and prevent them from going up,” he said.

Some housing advocates, the BC Green Party and groups such as the BC General Employers Union have called for allowing rent increases to be tied to the units rather than to the tenants. This was a move the BC NDP made in the 1970s, when inflation was high and vacancy rates were low.

The Greater Victoria-based advocacy group Homes for Living is not in favor of vacancy control. It says the policy is only a temporary solution for a few people at the expense of everyone else, including future tenants.

“It doesn’t address the root of the problem, which is that housing is incredibly scarce,” said the group’s Jack Sandor. “It would make the problem worse in the long run and would only help a small number of people in the short run.”

The bigger problem lies in the extremely limited supply in the market, Sandor said, adding that per capita housing construction is far behind what it was decades ago, when there were plenty of homes and therefore affordable. While he says the solution is to vastly increase supply across the housing spectrum, he acknowledges that current shortages provide a financial incentive to raise rents as high as the market can bear.

“When we talk about, ‘Why can landlords kick people out and raise rent,’ well, they wouldn’t be able to do that if there was a whole lot more housing,” Sandor said. “The only viable way to stop them from doing that is to give people plenty of other options that (landlords) can’t do.”

Asked about the impact of vacancy controls, LandlordBC said such regulations would “sound the death knell” for purpose-built rental housing in Victoria. The policy would “put existing rental housing providers in the untenable economic position of being unable to do more than basic maintenance on what is already very old rental stock,” the group’s CEO David Hutniak said in a statement, adding that the ability to deliver seismic and energy efficiency upgrades would also be compromised.

Hutniak said landlords need certainty from the government to continue offering and building rental homes after the sector faced sharp increases in operating costs, eviction moratoriums and rent freezes in recent years.

Black Press Media asked LandlordBC if it would support a limit on rent increases between leases if no upgrades or renovations are made to the unit in question. Hutniak said they would not support such a proposal. The Department of Housing ignored multiple questions about how it would handle large rent increases between leases if little or no upgrades are made to the unit.

King, of TAPS, said his group has seen landlords rake in record profits because they continue to argue that vacancy controls would lead to unworkable drops in revenue. The problem is made possible by the province’s lack of oversight of homeowners’ profits, he said, contrasting that with how poor and low-income people must disclose every detail of their income to receive government assistance.

“What we are telling the government is that vacancy control is a necessary step to change the power balance in the landlord-tenant relationship,” King said.

It also raises fundamental questions about the fees charged to tenants, he added.

“If the purpose of rent is not to actually cover operating costs and also make a profit … then this whole system doesn’t seem to make sense. What we hear from landlords is they want their rent, but then they want additional measures on top of the rent to cover their operating costs, as if that wasn’t what rent was intended for in the first place,” King said.

With the election approaching, King said it will be interesting to see the province take a strong stance on vacancy controls, as TAPS continues to hear that this is a significant issue for 18- to 30-year-olds.

“They have been asking for vacancy control over and over again and I don’t think the government is listening to them.”