BRITISH COLUMBIA (NEWS 1130) – Days after Premier John Horgan suggested next year’s 4.5 per cent rent hike may not go ahead, the head of a group representing property owners and managers is warning against the move.
LandlordBC CEO David Hutniak admitted he’s worried after hearing Premier John Horgan suggest the calculation formula in place since 2004 will likely change.
“The allowable maximum is critical going forward if we’re going to have a viable rental housing industry,” Hutniak said.
When asked how they responded to renters who say they can’t afford such a hike, he said they were “extremely sensitive to that.”
He said backtracking the increase would drive away developers while driving up short-term rentals.
“There’s still opportunity for people to do it, but if you start looking around a broader province, Airbnb is an attractive option for a lot of landlords. It’s something that we’re really concerned about,” he said.
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Hutniak said cutting the rate to two per cent, similar to what Ontario had, would actually hurt tenants.
“They subsequently had to backtrack on that and offered all sorts of financial incentives to encourage landlords to invest in their buildings,” he added. “The last thing we need to do is basically have legislation that would have developers of purpose-built rental go elsewhere.”
He said it’s important to think of the “unintended” consequences.
The Rental Housing Task Force created to gather feedback across B.C. is set to release its recommendations later this week.
The 4.5 per cent increase is the largest increase since 2004. The number was based on the B.C. Consumer Price Index and formula for rent increases. It’s calculated as the inflation rate plus two per cent. In 2017, the maximum allowable rent increase was 3.7 per cent.
-With files from Hana Mae Nassar