A Vancouver businessman wants corporate landlords to bear a larger share of a pandemic-created economic crunch on tenants.
Brendan Ladner, the 40-year-old CEO of SMAK - Healthy Fast Food, predicted that without a creative solution to the rent crisis, there will be an "explosion of evictions" in the coming months.
"Nearly two-thirds of all renters are young adults," Ladner said. "Young adults are more likely to have got into renting over the last few years. As renters, young adults are very vulnerable here and they have a real possibility of taking on quite a lot of debt."
He and his 35-year-old wife, Amanda, are an example of that.
They're paying $4,400 per month for their three-bedroom apartment in the West End. It includes a home office and a room for their five-year-old and two-year-old sons, Gavin and Soren.
Because the couple had to shut down their three SMAK outlets in downtown Vancouver in March due to the pandemic, they're each receiving $2,000 per month from the Canadian Emergency Response Benefit.
"After we account for the income tax that will be taken from that, we have $3,400 for the month," Ladner said. "And so if you have rent at $4,400 and you have childcare—we have preschool and that's over $1,000 a month—you start to wonder what to do here."
He's advocating that tenants only be required to pay 30 percent of their incomes on rent, with landlords covering the shortfall.
Landlords who are in a marginal position would be supported by a Rent Relief Bank. It would be administered by the B.C. Ministry of Municipal Affairs and Housing or a landlord group, such as Landlord B.C.
According to Ladner's proposal, the B.C. government and the Canada Revenue Agency would verify tenants' incomes—landlords would not gain access to their finances.
Young adults suffer disproportionately
Ladner said that the current housing crisis is really an issue of intergenerational unfairness.
That's because he feels that older landlords are often less leveraged than younger landlords. Plus, older property owners have enjoyed sharp increases in land values in recent years.
And older tenants who've lived in their suites for longer periods are often paying less rent than young adults found their place in the last three of four years. That's because rent hikes are limited by provincial policy for occupied suites, whereas landlords can increase the rent much higher after someone moves out, meaning the next occupant gets dinged financially.
Ladner applauded the B.C. government for providing $300 to $500 per month in rent supplements for tenants who've lost income due to COVID-19. The province has also halted evictions for four months except under extreme consequences.
But Ladner's proposal points out that the rent supplements don't come close to addressing tenants' shortfalls when one-bedroom apartments are going for more than $2,000 per month in Vancouver and $1,600 per month in Metro Victoria.
In the meantime, the Canadian Emergency Response Benefit is often largely flowing into the pockets of landlords, some of whom have paid off their buildings. This leaves tenants with little for other living expenses, including food.
Ladner also said there are broader economic consequences when young adults pay a disproportionate price as a result of the lockdown.
According to him, entrepreneurs tend to be younger adults who launch small businesses. Innovation comes from the risks they take, he added, which really drives the economy.
"I hope that the policymakers really think about our youth and young adults, the future leaders of our society," Ladner said. "Give them a chance to succeed here instead of burying them in debt and obligations."