VANCOUVER (NEWS 1130) – A Vancouver city councillor is calling for rents to be tied to units, not tenants, as the latest forecast from the national housing agency indicates local rents will continue to rising faster than inflation.
The latest report from Canada Mortgage and Housing Corporation shows Vancouver’s housing market is expected to remain tight, with an increase in new, more expensive rental units, and low vacancy rates. Rents jumping to current market levels as long-term tenants leave will also contribute to skyrocketing rents.
Now Coun. Jean Swanson says rent needs to be tied to each housing unit, not the person who lives there, to keep rents from climbing.
“The problem is that, whenever anyone leaves a rental unit, the landlords can raise the rent to as high as the market will bear. If somebody leaves, especially if it is a long-term tenant, rents are usually jacked up hundreds of dollars a month, and that’s why they’re rising faster than inflation,” she says.
This is called vacancy control, which restricts landlords to rent increases set by the province, even when new tenants move in.
“The big overarching solution would be for the province to bring in vacancy control, and I hope this report is a signal to them that they need to do that,” Swanson says.
Sydney Ball with the Vancouver Tenants Union agrees.
She says the expected rent increase isn’t surprising, pointing out the Rental Housing Task Force ignored the group’s recommendations on protecting tenants.
She says vacancy control could prevent evictions with profit as the motive.
“Without vacancy control, which would allow there to be a cap on the amount that landlords would be able to charge rent in between new tenants, we’re always going to see rent increase beyond the amounts of inflation,” she says.
“If I move out of my apartment, the next person renting it, the landlord can up the rent by however much they want, whatever the market will bear,” she says. “It doesn’t take very long to be in a space in Vancouver for it to be hundreds and hundreds of dollars.”
She says without more public housing, along with vacancy rates, the issue won’t be resolved.
Vacancy control could scare off investment
UBC housing economist Tom Davidoff says fast-climbing rents are a sign of population and income growth in this market.
“The good news is they do show vacancy ticking up at a very slow rate,” he says. “When you have population and income growth, and very low vacancy, you certainly expect to see rents rise.”
He says a boost in housing supply has been slowly opening up vacancy rates, noting that the federal government is lending money to help build purpose-built rental properties.
But one risk of adding vacancy controls, he says, is it can reduce new supply if prospective landlords feel their profits will be minimal.
“There’s some argument that people who own real estate, if the growth in rents is so low, the incentive to maintain an older property is diminished as people might start thinking about tearing down and building condos,” he says.
“The economics are clear: the less benefit you get from being a landlord, the more inclined you are to sell units to owner-occupiers.”