With allowable rent increases tied to inflation, B.C. tenants fear big spike in 2023

Anxiety is rising among tenants about how high landlords in this province will be allowed to increase rents next year, given soaring inflation.

In B.C. the annual allowable rent increase is tied to the Consumer Price Index (CPI), a measure of inflation, and there are fears tenants could see their rents bump up significantly in 2023.

Mazdak Gharibnavaz with the Vancouver Tenants Union, an advocacy group for renters, says working people are already feeling the pain at the grocery store due to inflation, and they can’t handle their budgets taking a further hit.

“We’re still in the middle of a pandemic,” Gharibnavaz told CityNews. “Our organization has called for the rent freezes to continue, but the government in B.C. decided to lift those restrictions. We’re going to have a situation where many, many renters at the same time are going to be getting these notices of increase. That’s going to be having an effect on people’s affordability, and whether they’re going to be, in some cases, able to stay in those homes.”

Read more: Dramatic year-over-year increase to rent in Metro Vancouver

To put this in context, the average listing for a one-bedroom in Vancouver on Rentals.ca in June came in at $2,337. If the rent increase was pegged to April’s 12 month average percent change of 4 per cent, that would mark a monthly rent increase of $93.48 (Note: This is not exact, as the final calculation will be based on the CPI increase as of July).

For a renter with a legacy monthly rent of $1,450 for a one-bedroom, that could amount to a $58 increase.

But David Hutniak with Landlord BC is pushing back against the suggestion the province should adjust the allowable rent increase.

“In terms of the rental universe, we have different online rental portals producing monthly rents, and where they are at today in terms of market rents,” Hutniak told CityNews. “But the reality is the vast majority of renters in British Columbia, because of rent control, are living in units where their rents are significantly below market. If you’ve been living in a unit for more than a couple of years, your unit is significantly below where market rent would be.”

Hutniak argues landlords have already taken a hit in recent years, pointing to the rent freeze and eviction moratorium B.C. brought in during the early stages of the pandemic.

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He also notes there was a change to the rent increase formula in 2018, when landlords were told they could only raise rents by the CPI increase, instead of the previous formula of two per cent plus CPI.

“The allowable maximum increase under the Residential Tenancy Act has never actually provided the inflationary protection that our sector needs,” Hutniak said. “We monitor this, and on a consistent basis, the maximum allowable increase is always deficient in the context of what the actual cost inflation is for our sector. This is the harsh reality.”

Instead of altering the allowable annual rent increase formula, Hutniak would like to see the NDP government follow through on its unfulfilled $400 renter rebate promise.

CityNews has requested an interview with David Eby, the minister responsible for housing, to clarify whether the province is contemplating any adjustment to the annual allowable rent increase formula for 2023.

Editor’s note: A previous version of this article incorrectly calculated the allowable annual rental increase using the year-over-year CPI increase, when the province calculates the allowable increase using the 12 month average percent change of all items in the CPI.