B.C. sets maximum rent increase at 3.5% for 2024
Posted September 11, 2023 9:45 am.
Last Updated September 11, 2023 7:10 pm.
The B.C. government is capping maximum allowable rent increases at 3.5 per cent for 2024.
The province announced the cap Monday, saying this is the second consecutive year that rental increases are being set below the provincial inflation rate.
“Across the country, costs have been increasing — especially for housing — at a rate that’s unsustainable for many people,” said Ravi Kahlon, minister of housing. “We know that’s the case for both landlords and renters, and that’s why we’ve found a balance to protect renters while helping to keep rental units on the market.”
If landlords choose to increase rent, they must provide a full three months notice to tenants using the correct Notice of Rent Increase form. B.C. landlords can increase rent only once every 12 months.
Premier David Eby says this remains an incredibly challenging time for many renters across the province.
“People who are in rental housing are extremely reluctant to move because they’re in a unit where their rents are controlled by the province. People [who] are looking for a place are seeing records set in terms of the demand for rental housing, as well as the associated rents,” he said.
“A critical piece for us is that we’re balancing both the realities faced by renters — of increasing costs on many fronts — as well as the realities faced by landlords of many increasing costs, and their, perhaps, decision not to continue renting if they don’t see some recognition of the fact that they’re seeing increased costs as well.”
The province explains that prior to 2018, the annual allowable rent increase was based on the provincial inflation rate, plus two per cent. Following a recommendation by the Rental Housing Task Force, this extra two per cent was removed, with the cap now only calculated using the inflation rate.
“The 2024 maximum allowable rent increase is significantly less than what it would have been prior to changes made by the Province in 2018 that limited rent increases to inflation. As inflation returns to normal levels, the province intends to return to an annual rent increase that is tied to B.C.’s Consumer Price Index in future years,” the government said in a statement.
Landlord costs have been increasing exponentially: advocacy group
David Hutniak, the CEO of Landlord BC, says while the organization is happy to see that the province’s increase is larger than in previous years, he explains costs for landlords have been “increasing exponentially.”
“Insurance, taxes, utilities, etc etc.,” he said. “The formula in the Residential Tenancy Act is a CPI, or consumer price index, which for 2024 based on the calculation that’s in the RTA [is] nearly 5.6 per cent. Last year would have been 5.4 per cent. And so we had 2.2 per cent for 2023, and now 3.5 per cent for 2024.
“And, with all due respect to the minister, that’s just deficient.”
Hutniak explains that landlords can’t “continue to operate a business on negative cash flow, year after year.”
“That’s the reality for not just the small mom and pops, but, if you look at some of the larger players in the market as well, I think perhaps across their portfolios, they’re just managing to continue to make investments in existing buildings,” he explained.
Hutniak says the organization has talked to the province regarding the uncertainty that is created with maximum allowable rental increases.
“I respect that tenants are obviously very challenged, but … if I’m a pension fund or rental developer, I really struggle to justify building new rental in British Columbia and that’s an even greater concern with the supply crunch that we have,” he said.
He says while the province has done a lot of really positive things for renters, you “can’t try to help renters while harming landlords at the same time. That’s just not sustainable.”
“And that’s been going on for some time … Landlords are providing a critically important service, [and] there’s just a real lack of appreciation for what’s happening in that sector. In many cases, an unwillingness to even listen. So, I think that’s going to have longer-term consequences.”
Hutniak stresses that landlords have had a number of discussions — some ongoing — with both the premier and housing minister, and hopes those conversations will continue.
-With files from Martin MacMahon