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Rent increase cap might create more problems for renters and landlords: Affleck

Last Updated Sep 26, 2018 at 12:40 pm PDT

FILE: Condos and apartment buildings are seen in downtown Vancouver, B.C., on Thursday February 2, 2017. THE CANADIAN PRESS/Darryl Dyck
Summary

Capping rental increase could discourage developers from building rental housing

Outgoing NPA Coun. George Affleck says the cap could lead to more renovictions

VANCOUVER (NEWS 1130) – The province is expected to cap future allowable rental increases to inflation later today, but there could be unintended consequences.

That’s according to outgoing NPA Vancouver Coun. George Affleck.

B.C.’s Rental Housing Task Force is recommending that the amount rent only be allowed to increase with inflation, but if disallowing further increases reduce profit margins or make certain properties lose money, even temporarily, it could mean developers will build less rental properties.

“We want to encourage companies to build rental housing, whether it be market or social. This rent control discourages the same people from building rental housing, and will probably drive, certainly developers, back to the strata development,” he says.

RELATED: Horgan expected to limit maximum allowable rent hikes to rate of inflation

Increasing costs could also mean more renovictions as landlords move out their tenants in hopes of attracting renters who can pay more.

“Costs are going up and not being able to manage that cost will either lead to disrepair, or will lead them renovicting current tenants to move in people that can afford higher rents, and that’s not a good thing,” he says.

RELATED: Lower Mainland developer axes plans for rental units, cites proposed rent hike rate change

Meanwhile, the BCGEU, one of the province’s largest unions, applauded the recommendation from the rental housing task force, but asked the government to go even further in renter protections. They say allowing landlords to apply for increases beyond inflation for maintenance and upgrades could lead to rent increases even higher than 4.5 per cent, the amount calculated by the old formula.