Paying $1,200 per month, Tamara Herman described her one-bedroom home just off Commercial Drive as a good deal. When she told her friends she was moving, several lined up to take the lease, Herman told the Straight.
Hoping to “keep it in the community”, she offered to help her landlord find new tenants, and she connected him with several friends who were interested.
Then the rent jumped to $1,600 a month. “We inadvertently facilitated a bidding war,” Herman complained. “They’ve flipped this house.”
For more than a year, debates around Vancouver’s housing crunch have focused on homes valued at more than $1 million, so-called foreign buyers, and real-estate agents “shadow flipping” properties for big profits. Herman asked why renters—who comprise more than half the city’s population—aren’t receiving the same attention.
“We absolutely have to look at rent control, but in the real sense of the word: rent control between tenancies,” Herman said.
According to the Canada Mortgage and Housing Corporation (CMHC), the average rent for a studio apartment in the City of Vancouver was $982 per month in October 2015, $1,175 for a one-bedroom, and $1,643 for a two-bedroom. Last year, the vacancy rate for the city’s private apartments was 0.6 percent.
In a telephone interview, D J Larkin, housing campaigner for Pivot Legal Society, suggested that Vancouver and B.C. politicians take a look at Montreal. She cautioned against transplanting polices from one jurisdiction to another without considerable study, but listed several specific policies that she argued are worthy of consideration.
For example, Larkin noted the Civil Code of Quebec states that a landlord must inform a prospective tenant of the lowest monthly rate paid for the unit during the previous 12 months.
There’s also a clause stating that if a new tenant’s rent is higher than that number, they can apply to the court to have the rent adjusted. A tenant can file that application— even after they have signed a lease stating a price they disagree with—within a period of 10 days.
“We do need to do something to control rent between tenancies and to consider tying rent to a unit rather than to a tenancy,” Larkin said.
In B.C., the government allows landlords to increase monthly rents on an annual basis at a rate of two percent above inflation. In 2016, landlords can hike rents by 2.9 percent, up from 2.5 percent the previous year and up from 2.2 percent in 2014. In Montreal, annual increases are not a given.
“Landlords can raise the rent, but if the tenant disagrees, it goes to what is called the Régie du Logement, which is their residential tenancy tribunal,” Larkin said. “A landlord has to, basically, justify why they should be allowed to raise the rent. It’s not an automatic rent increase that the landlord is assumed justified in getting, unlike in B.C.”
Contacted by the Straight, the Régie du Logement supplied a document titled “How to agree on the rent”. It includes a formula the provincial body suggests landlords and tenants use to form the basis of rent negotiations.
Far from relying solely on market values, the formula takes into account factors such as a landlord’s revenue, costs such as a building’s operating expenses and any major repairs performed on a unit, prices for electricity and gas, as well as municipal taxes.
The form by itself is nonbinding, but the Régie warns that if an agreement cannot be reached between a landlord and tenant, the dispute can be sent to arbitrators, and there the same formula may be used to arrive at a rate that can be imposed on both parties.
Larkin argued its these sorts of policies B.C. should be talking about today.
“That would really protects the people who have lived in Vancouver for a long time and who are really dedicated to this community," she said.
According to the CMHC’s latest report on Montreal, studio apartments located in the city’s “island zone” were renting for an average of $574 per month, one bedrooms cost $675, and two bedrooms were going for $775.
The B.C. Ministry Responsible for Housing declined to grant an interview. As the Straight went to press on January 9, B.C. Housing announced it had tasked the Conference Board of Canada to examine home prices in Vancouver with a focus on “land supply, municipal approval processes, the economy, interest rates and foreign ownership”.
Herman asked why, if the province is finally considering intervening in the housing market, it won't also put rent control on the table for Vancouver residents who aren't in the market for a $1-million house.
“Without rent control, everything, from low-income housing in the Downtown Eastside to rentals around UBC campus or in Point Grey, are going to escalate beyond what people can afford and it is going to literally become a crisis," she said.