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Housing Crisis: Time for RENT FREEZE to Help the Forgotten ….Tenants

February 14th, 2018 · 32 Comments

You can hardly pick up a newspaper, listen to a radio talk show or watch a television newscast without some mention of BC’s “housing crisis”.

However, the segment of our population that has been hurting most for the longest period has been almost ignored: RENTERS!

All the talk/coverage is usually about the high price of buying; the homeless and/or the lack of social housing.

Why?

Because they are EASY to cover: reams of monthly real estate statistics handed out; loads of realtors yearning to be interviewed for publicity; social and poverty activists dishing out news releases,  giving tours of substandard SROs or holding protests; politicians of all political stripes wringing their hands and issuing pious demands for solutions to the high cost of buying…  while offering none.

It’s all  news dished out on a platter … and gobbled up greedily by news editors and reporters.

Just last week,  Finance Minister Carole James sang the praises of a new Airbnb  11% TAX that will provide additional funding for social housing and tourism initiatives.

But once more, the on-going long-term plight of working, unsubsidized renters .. you know, those who actually go to work each day to earn wages to support themselves … and often live paycheck to paycheck …  has been all but ignored.

They’re too busy working to organize, issue reports and press release and protest.

So they’ve largely been ignored by news organizations and ignored by government … despite their being squeezed more and more with often-unjustifiable rent increases for years now by over-reaching landlords … and a system that actually encourages the rich to get richer by exploiting those who cannot afford to buy.

The numbers tell the story best:

In 2017, the maximum allowable rent increase in BC …without having to justify any of it … was  3.7%;  but the national annual inflation rate was 1.87% …. 2% in BC.

Get the point?

In 2016, Canada’s annual inflation rate was 1.5% … BC’s allowable rent increase 2.9%;  in 2015, the national inflation rate was 1.6% …. BC’s was 1.9%  while an automatic rent increase of 2.5% was permitted; in 2014, inflation in Canada was 1.47% …but  only 0.9% in BC, yet landlords were allowed to boost rents 2.2%; and, in 2013, with a national inflation rate of only 1.24%  BC’s landlords were gifted an allowable 3.8% automatic boost.

And I’d bet MOST landlords imposed those automatic allowable increases on their tenants …year after year.

That’s HUGE bucks!

Especially when you consider that, in the Lower Mainland alone, there are 349,000 RENTERS … and according to the last census, 43% of them spend 30% OR MORE of their wages on just RENT…with nothing to show for it as return on investment , even after decades. And in many cases, Hydro, cable etc. are extra.

And making it all WORSE … as if those gaps aren’t bad enough … landlords could impose even larger increases ON TOP of the automatic allowances if they could show they carried out justifiable repairs, renovations etc … adding even more to the burden of their tenants.

Yet, I don’t know a single working renter (other than those few in government or well-unionized jobs) who has received WAGE INCREASES EVERY YEAR better than or even equal to inflation. Some people work two years or more without an increase … in the real world out of sight and sound of our politicians … and our media.

This is exactly how and why the rich HAVE BEEN getting richer and the workers in our society HAVE BEEN getting poorer!

And growing numbers of renters are being forced into smaller and smaller suites, illegal living spaces … or even having to advertise/share with strangers.

Time for the NDP government to stop the rip-off of renters by so many landlords allowed the Liberals for so long.

BC should introduce and implement a TWO-YEAR freeze on automatic rent increases!

Give renters a chance to catch up; give tenants some breathing room from living paycheque to paycheque; and, slowdown landlords’ cashing in to the max on their captive customers …allowing ONLY increases they can prove to the Residential Tenancy Branch are essential for necessary repairs.

It’s about time …and fairness.

Harv Oberfeld

(Want more? You can follow me on Twitter @harveyoberfeld )

 

Tags: British Columbia · Media

32 responses so far ↓

  • 1 Temm // Feb 14, 2018 at 9:20 am

    Once again, seniors go unmentioned.

    Greater Victoria has an extremely low rental stock. Over the past 3 years; 2017 in particular, rental increases on vacated suites have been 40 to 60 percent.

    A large percentage of Victoria renters are seniors. Many, like my mother-in-law, are widowed with no private or union pensions. They exist on CPP, OAS and GIS which amounts to something like $1700 a month and increased about $32 in 3 years.

    The building MIL lives in has 40 suites, almost entirely occupied by seniors who, over time, move to “homes” or die off. Those vacancies have allowed previously stable rents to now increase dramatically. The $850 rent for a 1 bedroom in 2015 is now $1225.

    Victoria homes with suites are being snapped up by investors. Tenants are given notice to move out, under the guise of “intended family use” only to be re-let with a jacked up rent, or turned into an Airbnb, with zero enforcement or consequences.

    (Response: Renters are of EVERY age, every faith, every race, every political stripe, every educational level …. so the words RENTERS or TENANTS should suffice to include everyone in the category. What’s more important than picking over terminology should be the problem faced by almost all RENTERS. Period. h.o)_

  • 2 JOhn // Feb 14, 2018 at 10:25 am

    Since when did governments ever do anything right? common sense goes out the window when you are elected.

    (Response: I can understand WHY the Liberals did nothing for tenants …even though stats must have shown them over and over again that rent increases were exceeding inflation over and over every year. But the NDP now knows (they read this blog) and if they do nothing now, they will be complicit in the ripoff of renters. h.o.)

  • 3 Oldislander // Feb 14, 2018 at 10:29 am

    The problem with government regulation of rental units and prices, is that it makes the business undesireable to investors. So they don’t invest in new rental complexes, and the supply of rental units decreases. Like the price of real estate, rental rates are set by supply and demand — the fewer units available, the more the rents increase. One might argue that if there was less regulation, investors would build more of them, supply would increase, and the monthly rents would decrease.

    I can recall when there was a glut of rental units in Victoria; landlords were lowering prices across the board, and offering many attractive incentives, to attract new renters. Supply and demand…!

    (Response: Well landlords have had their way in BC..esp Vancouver…for more than a decade…and despite generous rent increases allowances supply and demand has not worked. There’s much more easy fast HUGE profit in just building and selling off at inflated prices to unsophisticated buyers overseas. That has left renters living in older buildings, exploited to the max by landlords because the vacancy rate is so low. Time to give renters a break with a two year freeze ….so they can at least partially catch up to real inflation. h.o)

  • 4 Tom LeSergent // Feb 14, 2018 at 10:47 am

    I second your motion Harvey, but it needs to be at least a 3 year freeze and needs to go hand in hand with a similar moratorium on foreign buyers.

    (Response: Two years would be a start … and I would also suggest the government establish/allow tax incentives/writeoffs for developers who build NEW rental housing. h.o)

  • 5 Gene the Bean // Feb 14, 2018 at 12:21 pm

    Harvey, your response to #2 “I can understand WHY the Liberals did nothing for tenants…..”

    Can you elaborate so a few here can here it from someone else than me …. you know … just to change it up a bit …

    (Response: Look at who donated to them….esp in terms of realtors, real estate developers, wealthy landowners, investors. h.o)

  • 6 Temm // Feb 14, 2018 at 1:14 pm

    It all goes back to this.
    http://www.macleans.ca/economy/realestateeconomy/andy-yan-the-analyst-who-exposed-vancouvers-real-estate-disaster/

  • 7 Keith // Feb 14, 2018 at 2:00 pm

    Probably can’t solve all the issues with unaffordable housing in a short time.

    One issue that should get a bit of scrutiny are the “renovictions” that happen from time to time.

    Can’t blame a landlord for making improvements but a bit more thought should go into what happens to the folks caught up with nowhere to go at a reasonable rent, or having to pay the massive increase.

    (Response: Agree! Phony renovictions or phony relatives coming to live with us deserves scrutiny: but I have no problem with a landlord who faces huge repair costs (water pipes, elevators )being allowed to increase rents to cover. However those who have just raised the rents to the max each year …well above their actual costs ..should be given a two-year time out in the penalty box. h.o.)

  • 8 r // Feb 14, 2018 at 3:59 pm

    Also possibly non immigrant property purchase freeze?

  • 9 Art Smith // Feb 14, 2018 at 5:15 pm

    Harvey, it is quite easy to have sympathy for tenants in a tough market, but let’s face it a lot of the rentals are from homeowners as mortgage helpers and small investors who have managed to buy a rental property such as a duplex or one with a basement suite. I guarantee most of those people would be more than happy to have stable renters and not gouge them on the rent. But problems happen, and when they do, all the power reverts to the tenant as the Landlord and Tenant Board almost always sides with the tenant by making it almost impossible to get them out quickly. Trying to get rid of a bad tenant can be a long and costly affair and who picks up the cost of that (hint, it isn’t the tenant). So the next tenant gets to rent at a higher rate to try and make up some the shortfall, even though they weren’t responsible.
    Also another point to consider is, the more rules, conditions and laws the government brings in to try and control rents the more onerous it becomes to be a landlord. When there is a shortage of rental stock, why make it even more unattractive to rent out your property. Maybe the large rental companies don’t mind but I bet even they think why not just turn the suites into condos.
    Having been on both sides of this, I can tell you a goodly number of tenants bring a lot of their problems on themselves, not all of them of course as I know there are bad landlords too but as stated above, I think most would treat good tenants fairly because it is costly to have turnover.

    (Response: I agree about difficulties landlords can face with the RTB which seems to me to favour tenants and makes it very difficult and costly to get rid of lousy renters in a timely manner. BUT that’s no reason landlords who have full buildings and none or very few problems should have raised rents to the MAX every year well beyond inflation and a fair profit. Time to make them give back a bit …or at least not allow them to ake so much more every year ..without justifying imposing MAXIMUM allowable rent increases. ho.)

  • 10 BMCQ // Feb 14, 2018 at 5:27 pm

    Harvey

    You bring up some good points and most including me would agree with many of your points.

    But we also must consider other facts that go into this whole affordable Real Estate conundrum.

    There are HUGE Costs for Landlords as well!

    Unfortunately In my humble opinion “The Horse is already out of the Barn and the Barn Door has been slammed shut behind him”!!

    This WAS and IS a Federal Problem and it has been ignored for over 20 years by both Liberal and Conservative Federal Governments.

    Most to blame here is the Federal Canada Revenue Agency who have in fact Criminally ignored the Chinese and other Foreign Property Flippers who have been a big part of this problem with their manipulation and flipping of Local Commercial and Residential Real Estate.

    Because those Property Investors have been allowed to avoid Legal Capital Gains Tax they have done Great Harm to Canadians from all Income Levels.
    I will not go into more of that here but I will add this direct comment to your charge that Rents should be Frozen.

    I should first state that I am a Landlord and I am and have been a Real Estate Investor who has always paid his fair share and lawful amount of Tax which ever Tax that is applicable.

    I would ask you to take a walk along Denman from DAVID and then up Robson to Burrard Streets.

    There are over to Empty Store Fronts right now, and each and every one of those Landlords is still responsible for those Property Taxes To the City of Vancouver Propereven if they are not receiving Rents on their Empty Store, sometimes amounting $150,000.00 or more each month. How would YOU like that?

    Very close minds of mine owned and ran the Dover Arms On Denman, up until April 30/18 they paid $ 35,000.oo each month Triple Net, May 1 that Triple Net went up to $39000. Triple Net each month ALL due to an increase in Property Taxes from the City of Vancouver.

    They were forced to close down, they did not close down because they were making too much money!

    The same goes for Residential Landlords, they are facing Huge increases in Property Tax for their Rental Units, they must find a way to pay that Tax.

    Those Landlords including MUST in most cases increase their Rents.

    Even in a good year they are forced to increase Rents to average down to cover for other higher years.

    It is not always a “Greedy Landlord” like Bean and others here might think.

    Why would we not question the actions and motives of City Mayors like Mayor Gregor and the Provincial Government that show no interest in controlling the Cost and Growth of Government Which contributes more than anything to the increase of Property Tax and Residential and Commercial/Industrial Property Tax and Rents?

    I have Residential and CommercialIndustrial Real Estate and like everyone else I have faced ridiculous increases that are not warranted.

    Fewer Services, higher Taxes, and they must be passed on to Renters, where is Media on this?

    I understand what you are attempting to say on this subject but you ARE NOT looking at this realistically and responsibly, the Landlord IS NOT always at fault.

    Instinkt is 2% in /Van Proper, Property Tax is up almost 5%. Really?

    Think also of the fact that because of MORE Residences and Commercial Developed in YVR over the past 25 years there are literally $ hundreds of Millions of Dollars more going into Government Accounts and the “Great Unwashed” receive fewer services, where does that excess Money go?

    Well how about this for a start, when Mayor Mumbles became Mayor of Vancouver 8 years ago there was ONE Person in Communications at Van City Hall, now there is 28 of them, ALL Highly Paid, Benefitted, Pensioned, and the rest, believe me that adds up.

    We need to “Light A Fire” under the Ass of the B.C. Auditor General and she needs to perform a Serious Audit of Major B.C. Cities and we need to Hold Mayors and Councils Accountable and we NEED to reduce Property Taxes, stop providing Welfare and Housing for Drug Addled Young Men with Criminal Records From Other Provinces the Rents will look after themselves.

    I should quit here, I am in transit.

    Hope this flows. Sorry Harvey but you are wrong on this one.

    I wonder if any one else will agree with me?

    (Response: You are confusing commercial real estate with residential tenants. I’m referring SOLELY to residential … who have far fewer vacancies and much less bargaining power than commercial or retail renters. Free enterprise should govern business …but just having a roof over your head should never be regarded solely as a commercial venture. And I believe it’s ironic that politicians and social activists seem to care more about providing decent housing for those who are NOT working than those who are. h.o.)

  • 11 Rocker Rich // Feb 14, 2018 at 6:47 pm

    Where’s a global pandemic or similar population cull when you need one? Just kidding…although even such catastrophe would still likely see Greater Vancouver remain a go-to destination, keeping rents pretty darn high.

    At least one of your commenters rightly critiqued the Canada Revenue Agency for its limp wristed approach to primarily Asian system gamers.

    Historically, however, the feds used targeted tax programs to incentivize construction of rental properties. Maybe it’s time for Trudeau the Younger to emulate his pops and tweak the system to encourage more apartments and fewer condos.

    Canadians have also always been less willing than Americans to uproot and seek opportunities elsewhere. I’m not talking about necessarily pulling up stakes to settle in Spuzzum or Cache Creek. But Prairie cities offer urban amenities with vastly more affordable housing

  • 12 Barry // Feb 14, 2018 at 6:56 pm

    As one who suffered though a bad landlord and multiple attempts at “renovictions” there are several changes I’d like to see:

    1) When a tenant moves out, the landlord can increase the rent to what ever they feel like. I once saw an apartment go from around $600 to over $1000 after a tenant moved out. Freeze these rents as well.

    2) Give the tenancy branch the right to refuse to accept eviction notices from serial rennovictors. In my case, after I won my case, about a month later there was a new notice with just some of the details changed. I won, but had to go through the process all over again.

    3) If a landlord tears down a building and rebuilds, give the old tenant the right of first return at the old rent. This would prevent the stealth upscaling of neighbourhoods.

    4) Give the tenancy branch real power of enforcement. At the place I moved out of, the landlord wouldn’t refund my damage deposit. I got an order to get it back, but the branch has no enforcement powers. Give them the ability to go after landlords. They have the time, I don’t.

    5) We need more residential tenancy branch offices. I lived in Richmond, but I had to go near Metrotown to deal with my landlord. I think we need a branch in each major municipality.

    An unbridled free market approach to housing is not working. Time to impose some rules. Before landlords start whining, I would people follow most rules, but they exist to go after the bad apples.

    (Response: Doubt the government would go as far as you would like …but they should/could at least DO SOMETHING to address the forgotten victims of our housing crisis: RENTERS. h.o)

  • 13 Rocker Rich // Feb 14, 2018 at 7:03 pm

    P.S. Not having lived on the Lower Mainland since 1990, my memory of area businesses is understandably dim.

    But my antennae twitched when spotting the Dover Arms reference by BMCQ. Wasn’t that run by Bill Konyk (aka Hunky Bill) whose legendary perogies also whetted appetites at the PNE?

    It would be interesting to know if and when Mr. K threw in the towel for retailing out of the West End. I checked the web site…and he appears to be supplying products to other retailers these days.

  • 14 13 // Feb 14, 2018 at 8:31 pm

    Harvey , I (and everyone else) have been a renter. The changes from those days to todays renters make comparison almost impossible. The one thing that hasnt changed is as Art Smith pointed out the dynamic changes when a landlord has had a few bad tenants. When I rented a home 30 years ago my landlord was so happy to get his rent on time that he never even breathed the word increase. Today one of my kids is renting and typically he rents a condo in a strata from the owners. When they get their rent paid on time and realize that hes not trashing the apartment he seems to never get a rent increase.

    But if I can focus on Burnaby . Burnaby WAS the center of rental affordability. Block after block of three story apartment blocks. One two and even the rare as a dodo bird 3 bedrooms that were attainable for a working couple with kids. These were the folks that were not BCGEU members . These were the folks that might if they were lucky be able to scrape up a down payment and buy a home in Surrey or Maple Ridge. Then came three rental killers one of which could have should have been able to stop the insanity.
    Metrotown, Skytrain and the renoviction king Corrigan. This POS mayor has allowed thousands of renters to be evicted in the name of densification and progress. His glib answer to where the hell should these renters go is they can move back in to the new buildings. Yeah sure Mr Mayor. The one bedroom that rented on the third floor over looking the lane might have been $500 per month in an older building. The old couple than managed to even have a car and some sort of life probably could not afford the damage deposit let alone the $1800 per moth rent in Corrigans new development.
    Best case scenario, Corrigan keeps his promise to lay down in front of the Kinder Morgan bulldozer and it runs him over.

  • 15 BMCQ // Feb 14, 2018 at 8:49 pm

    I actually made reference to Trsifential, Commercial, and Industrial.

    If a City has problems with over Taxation of Property to one there are problems with all.

    Obviously I will not go into it here but I have like manymost others that own Real Estate experienced ridiculous unfair increasesin PT for ALL!

    I am never confused, they are ALL just as important to running a successful Municipality and if a Civic Government causes enough concern for Real Estate Owners and Landlords those Investors will look for other Investments.

    As I stated earlier Civic Politicians and Provincial Governments need to do more for Pensioners, Single Moms attempting to escape Bad Marriages and the ?Working Poor than they do for Drug Addled Criminal Felons that are in B.C. On Non Returnable Warrants From Other Provinces.

    Provinces and Municipalities need to Control and Shrink Size the Bureaucracy and they need to control and in fact bring down Property Tax.

    Again, take a walk along Denman, up Robson, witness the over 60 Empty Store Fronts and then tell me that it is only Residential Tennants that need sssistance.

    This is simple and Media need to start Agitating and Demand Answers.

    If a City is managed properly and WASTE is kept to a minimum it is much easier to Assist those in need of assistance.

    I have been doing this a long time as have many of my friends, there is a chance to fix and improve this but we need to bring this out in Public and there needs to be accountability and changes by Municipal and Civic Politicians.

    Freezing Rents is “Pie in the Sky” and to me it is no more than the “Hollow Promises” made by the Campaigning Horgan NDP which are ALL already Almost Forgotten.

    OK then how about Municipalities Freezing Property Taxes for TWO Years while we try your plan?

    What do you think Mayor Mumbles will say about that?

    Hell Harvey, Mumbles can’t even hold PT to the same Level as Inflation!

    Oh and BTW, keep in mind that almost 5% increase in PT each year adds up to a lot on Property that increases several $ Hundred K each year!

    Don’t you think a Landlord might need a Rent Increase whether it be Residential or Commercial/Industrial?

    A Heslthy Vibrant Economyin the Business Sector is GOOD for everyone and it creates Employment and Pays Mortgages and Rents.

    Once you have that you need Governments that are responsible and Government that controls costs.

    It is far TOO easy to Freeze Rents and it is not Fair.

    What about Efficiences in Government, Cut Backs, a 2% savings in ALL Departments?

    Again, GET Rid of those Criminals from Other Provinces for a Start, shrink Provincial and Civic Spending and then let’s see where we are.

    I am quite confident there are others on this Blog that agree with my point of view on this, let’s see if they are willing to step up on this most controversial topic.

    Nice try Harvey but there are better ways to peel this Onion.

  • 16 G. Barry Stewart // Feb 14, 2018 at 9:41 pm

    Here’s an interesting piece from the Guardian, on how Canada is one of the world’s best places for secretly stashing your money — whether legally or illegally obtained.

    This must be part of the problem with residential landlords, as well as the real estate craziness in general.

    “Canada is one the world’s most opaque jurisdictions when it comes to identifying the owners of private companies and trusts, according to anti-corruption campaigners who say that more rigorous checks are required to obtain a library card than to set up a company in the country.”

    https://www.theguardian.com/world/2018/feb/14/canada-corruption-snow-washing-investigation-private-companies?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+USA+-+Collections+2017&utm_term=264034&subid=16187802&CMP=GT_US_collection

  • 17 jay // Feb 15, 2018 at 2:05 am

    Have to agree. As a renter my rent has increased by around 50% in the last 10 years. I can assure you that my wages have not kept pace. I am certainly not earning an extra $400 a month from 10 years ago.
    We have been looking at houses lately and even with a $50000 down payment most would eat up about 1/2 of my base pay (and for the record I have a government job but we are not getting regular wage increases because of that).
    So we are kinda damned if we do and damned if we don’t.

    (Response: I am sure you are NOT alone. Too many landlords have shown they cannot be trusted to just earn a fair return on investment: too many have exploited tenants beyond reason. Time for the NDP to do something about it …or risk being tarred as just another ;party that favours and caters to developers and rich property owners. h.o.)

  • 18 BMCQ // Feb 15, 2018 at 9:09 am

    I should have initially said I fully support the current Rent Stabilation Program we now use.

    There needs to be control of rent increases and yes we need to do more for done for Seniors, Single Parents mostly Moms with Children, those with Mental and Physical Challenges and other Special Cases.

    I strongly believe that the simple demand to attack the Landlord solves nothing, we need a goal change the way we handle Residential, Retail, Commercial/Industrial, Rentals and how we assign and calculate Property Tax in this Province.

    We then need to ensure that deserving people like the ones I mentioned benefit from overhauled regulations.

    Instead of putting people with Drug and Criminals into SRO we need to put Seniors and others into that Public Housing. The streets would be safer, deserving people would have shelter and the Drug Addicted Criminals would go home to Ontario, Jail, or Treatment in their Home Province, this is common sense.

    We then must take Funds from Foreign Buyers Tax, Property Purchase Tax, some other Government Funds From The Feds and we need to build more Public Subsidized Housing for those same people mentioned.

    We need to take back Civic Governments From Activist Mayors who cater to Drug Addicts and we need to look after the REAL Vulnerable People in our Society, those that deserve it.

    Freezing Rents sounds good but it does nothing to create more Rental Housing, it in facts discourages Investors. We need to create incentives such as Tax Credits to build and we need to offer Tax Incentives to Investors to encourage them to hold Rents when Rentals change hands. The Province needs to change that Legislation.

    Yes there are Greedy Unscrupulous Landlords and they should be dealt with harshly but there are plenty who are suffering and in threat of losing Property due to Unscrupulous Governments taking advantage of the increase of Property Taxes.

    We should actually have Public Hearings On this whole thing.

    Rocker – with Harvey’s permission

    Bill was partnered with my dear friend John Kerasiotis of OLYMPIA Pizza, Luv Affair, Caprice, Venue, Celebrities, and a few other ventures in the Dover. John bought Bill out about 15 years ago, he passed away about 10byears ago and like too many other businesses the Dover fell victim to ever increasing PTax. Only a few weeks ago the family closed the Caprice on Granville St.

    Businesses like Chspters, and so many others are closing up every week, employees are losing jobs and the Downtown is becoming a Ghetto of Homeless Drug Addicts doing their best to acquire Social Housing ahead of those that deserve it and Empty New Condo Towers used by Mainland Chinese to secure Cash earned in Asia.

    Ask CRA why they have never gone after those Chinese and other Real Estate Slippers.

    Heads should roll at CRA and with Senior Mandarins in Ottawa, they turned a Blind Eye to this.

    Just think of the Hundreds of Millions of Dollars in Cap Tax and others that could and should have been collected from those Flips and other Transactions and then used for Social and Affordable Housing!

    It disgusts me!

    Let us not be so quick to vilify and judge All Real Estate Landlords and Investors.

    Gene the Bean May be convinced ALL People like me are Greedy and Morally Bankrupt but I beg to differ, some of us are good caring people.

  • 19 Oldislander // Feb 15, 2018 at 1:26 pm

    Not to belabor my devil’s advocate stance on your post, companies owning rental buildings are not charitable organizations. Their role is the same as any other privately owned company — to maximize shareholder wealth.

    The crazy rising prices of real estate are now being felt by renters, as well as prospective property owners. Consider a small rental complex somewhere in Vancouver, that 10 years ago, was worth under $1M. Today that building might be worth $10M or even a lot more. That means that as the property value rises, the ROI on the property value falls. At some point, the owner will be further ahead to simply sell the property and invest in a medium risk portfolio, rather than suffering all the government red tape, regulations, frozen rents, bad renters, and the like.

    The only way that fresh private money can be tempted into rental investments, is if there will be a realistic rate of return on the property value. With a bunch more government regulations restricting the company’s ability to earn profits, that likely won’t be possible.

    Ergo, considerably fewer rental units, considerably more demand, and sky-rocketing rents for the unforeseeable future. Unless we want our provincial government to use our money to build and manage rental complexes — I sure don’t want that.

    I’d like to hear from some large-scale rental managers here — how do they feel about this?

  • 20 Island Lookout // Feb 15, 2018 at 3:46 pm

    TEMM #1 #6

    Good offerings and comments.

    BUT

    This residential rental conundrum has no solution other than to see built a lot more supply to meet ever-expanding demand.

    Just how much these new units would rent for is anybody’s guess. Mr. Market will figure that out. He always does. Cruelly so.

    Some units will be “public housing”.

    But most will be private sector accommodations because not even the most died-in-the-wool Socialist government can “solve” this problem.

    So, the short-term problems will get only a lot worse because they will and we all know it, while the long term solution lies entirely out of our control: tighter monetary policy (higher interest rates) from the Bank of Canada and the US Federal Reserve.

    A decade of near zero interest rates in the industrialized world, resulting from the 2008 financial debacle, has brought us THIS housing disaster that is killing the hopes and dreams of millions of us.

    Low interest rates pervert the value of absolutely everything, from real estate, to motor vehicles, food, schooling and health care, to name a few.

    The Horgan government is very small potatoes in this debate, believe it. So is the federal government.

    They don’t have the money.

    They can only raise taxes if voters let them.

    Back in BC, the government could also borrow money on the bond markets.

    But rates are already rising rapidly and the blow-back on the rest of us will be incalculable.

    Why?

    Because monthly interest charges owing would eventually see cuts to our social programs.

    My only advice is to go local and individual: spend as little as possible, pay down your debts in an organized and consistent way, and yell loudly if someone bangs on your door and utters the following:

    “Hi, I’m from the government and I’m here to help!”

  • 21 Diverdarren // Feb 15, 2018 at 8:22 pm

    Harvey, although I appreciate the points you’re making, there is a small issue with how you reached your conclusions.

    To get your inflation numbers it looks as though you are using Stats Canada CPI numbers to get annual inflation for the province.

    You then position the inflation rate next to the allowable rate of rental increase. You then conclude that since landlords can increase greater than inflation the landlords are taking in unfair profits.

    One problem.

    CPI does not include municipal property tax increases in their calculation of inflation. I’m sure you’d agree that landlords do have to shoulder the yearly added expense of property tax increases. In Vancouver for 2018 that increase is 4.25%

    The restriction on rental increases is rent control in action. The system to protect renters is in place and working.

    I’m not prepared to vilify landlords because the government has allowed the housing crisis to occur via allowing offshore speculation by allowing non residents to purchase property. Nor am I going to blame landlords for a failed federal government immigration scheme. Nor are landlords responsible for governments near complete withdraw of co-op property programs.

    If you want fairness, it’s not the landlord that should be punished simply because they expect to not have to swallow the costs of inflation and property tax increases. They are business not charities. If you create such a burdensome weight on landlords that their investment turns into losses they will sell rental to condo development.

    (Response: Actually, I did consider municipal taxes, but I don’t agree that because they go up any particular percentage, landlords should automatically be allowed to raise rents that amount …or better. Taxes are only one component of any landlord’s cost/income calculations … and even if they occasionally are above inflation, other landlords’ costs may come in well below. The REAL component …not to be forgotten … should also be renters’ incomes. I don’t know a single renter whose wages have gone up every year equal to let alone greater than inflation, yet they have been squeezed more and more …to the MAX … by landlords (in many cases large companies running/owning highrises). Time for the government to reel their excesses back. h.o.)

  • 22 BMCQ // Feb 16, 2018 at 7:32 am

    Diver – 21

    Happy to see you have resurfaced!

    As has been suggested Residential Property Owners that Rent Apartments are running a business and some of the larger ones actually answer to Shareholders and some of those Shareholders can be Unions and other large Business concerns. They are not charities.

    Yes I am very sympathetic to Renters that have not received an increase in Wages/Salaries that match or exceed the Rate of Inflation but Mayor Gregor and other Mayors do not care about the Rental Landlord and how his Finances are doing in any particular year.

    What would/did we in any Municipality do when
    Vacancies were Higher and Landlords were forced to reduce Rents because of competition created? Or does that not matter?

    Federal, Provincial, and Municipal Governments need to get creative, The B.C. Auditor General Assigned to keep an eye on Cities needs to get busy and file PUBLIC Reports on how Cities especially Vancouver are managed.

    How many more Employees in Vancouver now as opposed to previous years? Salaries/Wages? Pensions/Benefits?

    We must demand Full Public Disclosure.

    What about the Feds creating Tax Incentives for Developers to erect Rental Towers? Again, what about ORDERING CRA to track down Chinese and other Property Flippers and recover UNPAID Cap Gain Tax on highly profitable Flips? Where is Global, CBC, NW, and the rest on this?

    I have attached a couple of pieces some here may find of interest.

    No comment from me on these, simply food for thought.

    http://www.cbc.ca/news/canada/montreal/renters-montreal-tax-increase-1.4487168

    https://www.theglobeandmail.com/report-on-business/small-business/sb-money/rising-commercial-property-taxes-put-small-business-owners-in-a-bind/article35152561/

    This ever rising usurious Property Tax Epidemic is a Catastrophe for Residential Renters, Retail/Commercial/Industrial Renters, Landlords, Employees of the Business affected who almost all happen to be Residential Renters, and in fact this problem is threatening survival of Cities and Cultures.

    Runaway Property Taxes will change everything and it has been happening for the past 10 years at an alarming rate. Why?

    Keep in mind that many Property Owners are forced to sell to Developers because of High Property Taxes.

    Just before Xmas a friend of mine told me he was going to sell to a Developer because his ever increasing Property Taxes have finally caused him to be in a almost NO Profit situation on his small Residential Rental Building in South Granville Vancouver and in the next year or two he will be in deficit.

    He does not need or want the profit from the sale, h wants to be a Landlord.

    What do you think is taking place in Metrotown Burnaby?

    http://www.westerninvestor.com/news/british-columbia/develop-or-sell-landlords-face-tough-call-with-new-sky-high-property-taxes-1.8198807

    Yes, we need to find a way to support Residential Renters but the fix for this needs to be well thought out and we need full Transparency from the Auditor General, the Province, and the Mayors.

    We then need to demand that CRA recovers the Flip Profits I mentioned earlier and we need to direct those Funds back into Vancouver and Toronto for Affordable Subsidized Housing for THOSE that deserve it.

    I am well aware you do not want to hear about Business, Rent, and Property Tax within the Triple Net here Harvey but please keep in mind that those Business ALL Employee Workers and they are mostly Renters.

    The concern about Runaway Property Tax Increases for Business and Residential Renters affects EVERYONE.

    http://www.westerninvestor.com/news/opinion/are-vancouver-s-property-taxes-killing-independent-businesses-1.21122877

  • 23 13 // Feb 16, 2018 at 9:25 am

    Divers 7th paragraph nails it. The housing /rental dilemma is the fault of government inaction . Or failure to act. Even the cra is to blame as they haven’t gone after Chinese investors due to their fear of seeming racist.
    No the blame game places greedy land loads well behind three levels of lazy bloated over paid under worked politicians and public sector waste.

  • 24 e.a.f. // Feb 16, 2018 at 6:04 pm

    The average working full time person who rents their home are the forgotten in this whole thing. They are being ripped off and the previous government let it happen.

    Many corporate land lords just raise the rent the max. each year with out justification. Its not like many of them are maintain the buildings. Most are trying to ensure they are run down so they can demolish them and sell the and for condos. Then there are the corporations who know no matter how high the rent increases are they will just find new tenents, but what happens to those who have to move on because their salaries did not keep up with the rate of increases on their rent.

    People can’t afford to purchase their homes any more and more and more will have to rent. How do corporations and civic entities think they are going to find staff. You can pay a first responder, cop, teacher, nurse $70 to $90K a year but they will still have to rent a place to live and what is available isn’t great.

    In some countries the government has a large housing stock, here not so much. The housing the government does own is social housing. What we need is affordable housing for working people with families and those on their own.

    The building which is going on in Greater Vancouver is condos, condos, condos and they aren’t being built for you and me. They’re being built for foreign investors. Want to ensure rents remain reasonable, increase the stock and that means no foreign ownership.

    The City of Vancouver just approved a complex which will block views and house 12k people. They’re not going to house the people you discuss in this post. They’ll be for sale at prices most can’t afford. What the city of Vancouver ought to have done was said NO. You want to build, its rental and its affordable. there is money to be made there, its just corporations and individuals want to make buckets of money right now with no regard for the overall impact on society.

    As previous commenters have written, seniors are in a real bind. Their income doesn’t go up. Most have “flat” pensions, not indexed. All over Vancouver island you hear young people can’t find a place to live. They can find jobs, just no place to live. Like how did this happen? Well most of us know how it happened, but we let it happen. If we don’t do something what will happen is no one will be able to work in an average job in Greater Vancouver because they can’t afford to live there.

    We need to have a look at what NYC has done. Now a lot of it has become a bit of mess, but there are all sorts of different types of rental housing with rent controls and they have a way better system then we have.

    Some months ago an article caught my attention. A church and a housing society were suing because the owner of a building was selling. The building has provided affordable rental housing. The organization wanted it to remain as affordable housing for renters. The owner wanted to build expensive condos. Now for a church and housing society to get together to sue the corporations, means they thought they had a chance under the game rules of NYC. That would never happen here. Following housing in NYC, via Politico is interesting and demonstrates clearly there all sorts of alternatives we in B.C. have not looked at.

    if we want to continue to be a viable community with working people and their families we do need a freeze on rents, rent increases according to the increased cost of the building, more rental buildings and not condos for sale, and no foreign ownership. if we don’t do something we won’t be able to afford to live in our own communities.

  • 25 Jimbo // Feb 16, 2018 at 9:07 pm

    At the risk of being brief – is there is so much $$$$ in rental properties, why not spend some govt. infrastructure $$$ on it?

    (Response: Government is a notoriously inefficient, costly and overly bureaucratic way of doing almost anything! (Who else could lose MILLIONS developing waterfront housing along False Creek shores????) Better to have government establish incentives (tax writeoffs, allowances, credits) for private industry to do it. In the meantime, CURRENT renters deserve some relief: FREEZE rents for two years! h.o)

  • 26 Eldon // Feb 16, 2018 at 10:35 pm

    Point taken. I am one of the guilty that focuses on home prices (which are ridiculous!), but few speak for the renters. If you’re in real estate, you’ve made a killing over the last 5 years. Time to freeze the rents.

  • 27 13 // Feb 17, 2018 at 7:53 am

    Harvey in your response at post 3 you refer to unsophisticated overseas buyers. I wonder just how bumpkin like these buyers are. If they have bought and sold they have pocketed a lot of cash. If they have bought and held they stand to make a lot of cash. Thanks to our Federal immigration policies and the laughable “we dont want to look racist CRA). These rubes have found a way to get substantially higher return on their yuan.

    (Response; Not all have made fortunes: some realize eventually they were played and overpaid. But in the meantime, it has all made it more difficult for locals to buy condos/homes and made investing in long term rental projects even less attractive. h.o.)

  • 28 e.a.f. // Feb 17, 2018 at 11:32 am

    HARVEY, your response to #25, governments maybe inefficient when it comes to housing, but they don’t need to be. In other countries they work well. Have a look at the Netherlands and Norway.

    Loosing millions along False Creek, well that started with the Socreds when they sold the north shore to Li Ki Shing for what was it $50M. It cost the provincial government almost that to clean up the land. Then he sold the first piece of land for approx. $45M to a developer. Had the province held onto the land and developed it as decent family housing on half, who knows how it could have worked out. government entities here don’t look 50 to 100 years down the road making their decisions, its here and now and what their political supporters want. Of course the votes keep putting them into office, but again, we don’t think so long term either. If you have a look at some affordable housing in Europe, its amazing.

    The federal government at one time had a program for housing co operatives. it worked just fine and it had blended incomes. people paid anywhere from 25% to 30% of their gross income and ran the complex themselves. Perhaps its time for this to be looked at again.

    If we fail to house our own citizens we are going to have a problem in this country.

    Perhaps some of the large Canadian pension funds would like to put their money into affordable housing for Canadians.

    (Response: Left AND right … they all seem to be inefficient and wasteful …sometimes to the point of incompetency … when it comes to providing housing. We are not Norway: I just don’t have confidence our bureaucrats, politicians and even civic unions would build and run large rental housing projects well these days… and, because of activist pressures/ political agendas, lack the guts to turn away all kinds of unsuitable tenants, who over time would probably destroy the place. h.o.

  • 29 Hawgwash // Feb 17, 2018 at 11:54 am

    I vowed to not participate here but, having left Vancouver to get away from the zoo, it followed me and this topic hits near home. My apologies for length.

    A quote up above and I am not being critical of the poster:
    “Consider a small rental complex, somewhere in Vancouver, that 10 years ago, was worth under $1M. Today that building might be worth $10M or even a lot more. That means, as the property value rises, the ROI on the property value falls.”

    Return on investment, via rental income in BC, is a red herring.

    What is overlooked’ innocently or deliberately, in the above common scenario, is the real ROI is 9 million dollars over 10 years. Amortize it however you like, it is a pretty nice return.

    The Greater Victoria real estate market was fairly static for about 8, maybe even 10 years. In 2015, finding an affordable rental was not difficult and landlords were ok with getting $800 a month from a basement suite. A nice 2 bedroom apartment in a decent building, with an easy walk of amenities and transit, could go for up to $1000. A 1990 house, a 5 year old 2 bedroom condo or townhouse, with market value of $ 200,000, could fetch up to $1500.

    The rental ROI, year over year, on those units was probably triple bank interest and on par with a conservative investment portfolio. Covering the mortgage and taxes was a reasonable expectation.

    In late 2016, early 2017, speculator and developer money started flowing in from the mainland and offshore. Dozens of realtor organized “Happy Sun” tour buses paraded of the ferries.

    In 8 months those same condos and townhouses, mentioned above, went from 200k to 400k; the 1990 house from 200k to 800k.

    The cost of a hot water tank or bundle of asphalt shingles hasn’t tripled yet, all of a sudden, the landlord, who just won the equity lottery, expects the same % increase in rental ROI and is asking $2500 for that 2 bedroom condo. Forget the house or townhouse.

    New homes are sprouting like dandelions, including on rezoned ALR land. Most have “mortgage helpers” which are lost leaders because every other new house on the block has one as well. The expectation of a rental cash cow is unreasonable.

    Enter Airbnb where, 25% occupancy for 6 months and a near 100% during tourist season will bring in triple what an annual lease would.

    Speculators snapped up houses that have sat empty for months; either because the local renters can’t manage four grand a month, or because the house is secondary to parked money.

    The sad spin off from all this;

    The developers and politicians are redeveloping Sidney’s downtown, converting it from a tourist and resident friendly Steveston, to a replica Coal Harbour.

    Two new malls are being built on rejiggered ALR.

    First up, a big box store to kill the local Home Hardware; a mega grocery store to kill off a long standing, family owned food store and half a dozen new fast food outlets, in a town, with slightly more than half the population, of Squamish.

    In two years the developers will have moved on to pillage the next area; local, long time merchants will have left because they can no longer afford the exorbitant property taxes and rent increases.

    (Response: A very articulate argument and explanation …backed by figures … showing how many renters have been victimized beyond reasonable rent increases. Yet so much of the media focus and politicians’ attention has been directed at those who want to BUY a home. The NDP should have the backbone to do something for renters ..those who are feeling the pinch tremendously now .. and who are likely to be more appreciative and vote NDP next time than those buying million dollar homes and up. h.o.)

  • 30 13 // Feb 17, 2018 at 2:47 pm

    The NDP did put a $400.00 renters grant in the election platform. It would seem that they are not prepared to do that at this time , but we will find out in 3 days. Renters have been screwed without a doubt. Landlords that have used skyrocketing property values to jack up rents are scumbags. Landlords that create bidding wars on rental units are even bigger scumbags. BUT and STILL these landlords have been enabled by the 3 levels of government in this country that chose to grab taxes from sales gone wild to Chinese investors. The Feds could have stopped it with a moratorium on foreign ownership. The Feds could have greatly curtailed the tidal wave of buyers by making the CRA enforce laws that exist as we speak. The Provinces and municipalities could still fight back by adjusting property tax down in order to make the equity windfall meaningless until the property is sold .
    The renters predicament is due to greed at a government level. The landlords might bear some of the blame but they also bear much of the risk, especially greedy developer type landlords.
    Imagine the predicament of the landowners that have bought in the past 12 years if government regulations burst the bubble.

  • 31 R // Feb 17, 2018 at 3:15 pm

    http://www.macleans.ca/news/canada/the-battle-to-clean-up-b-c/

  • 32 BMCQ // Feb 17, 2018 at 4:56 pm

    Some excellent commentary on this topic.
    A great exchange of ideas!

    Keep in mind the very same thing has happened or is happening in many different Cities and Locals in Canada and the U.S.A.!

    Hawg – 29

    Very Impressive!

    I hope ALL Politicians at ALL Three Levels of Government read your Post.

    I also hope that Voters read your most important Post as well.

    I will be in Sidney in two weeks and visiting the Deep Cove Chalet, just about my favorite place anywhere, I hope what you describe currently taking place does not continue.

    It may be too late but the Feds need to control or immediately stop Foreign Purchase of our Country, Provinces, and Cities.

    I am sickened that Politicians are more concerned about being Re-Elected than they are concerned about serving and looking out for the People they pledged to protect.

    Time for Two Term Limits for all Elected Politicians.

    Politicians must be forced to Govern and if they know they will be in Office for a maximum of Eight Years they may do the right thing and Govern for the People.

    A Topic for another day.

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