Both tenants and landlords express dismay at rent increase rate for 2024

Landlords in British Columbia will be allowed to raise rents up to 3.5 per cent in 2024, the province announced Monday.

The increase is below the current rate of inflation, and it is also more than the allowable increase for 2023, which was two per cent. The province said the 12-month average inflation rate is 5.6 per cent currently.

B.C. PremierDavid Eby said Monday that the province is trying to weigh the challenges faced by both renters and landlords.

But in a market where rents continue to riseand many landlords rely onrental income to help cover mortgages, both owners and tenants have expressed dismay over the announcement.

WATCH| Vancouverites react to rent increase announcement:

Renters in Vancouver have mixed reactions to 3.5% allowable rent increase for 2024

12 months ago

Duration 0:41

Some renters in Vancouver say the city is already too expensive for them to face further increases in their rents, while others say the market should be allowed to dictate rental costs.

Vancouver landlord Sheryl Yager rents out two units in a detached home she bought in 2017. She says one is a furnished studio unit that sees a fair amount of turnover, allowing her to stay closer to what the market will bear. The other unit, she says,has had long-term tenantsandshe hasn'tincreased rent for her last three tenants.

"I just felt it was a fair rent," she explained.

She says she takes in around $4,200 a month between the two unitsbut has seen her costs balloon as rising interest rates affected her variable-rate mortgage.Taxes and insurance have also risen substantially, she says.

David Hutniakwith Landlord B.C., which represents thousands ofproperty owners or managers in the province,said Monday that years of either no allowable rent increases, or ones well below inflation,has harmed landlords both small and large.

"The issue is on a cumulative basis when we look at what it costs to operate rental housing," he said. "We're not immune to inflation, property taxes, utility costs, insurance costs, maintenance costseverything is going up."

Yager says a lack of support for landlordshas left space that could be rented sit empty.

A recent Vancouver Sun poll of homeowners found 20 per cent of respondents have space in their home but don't rent it out, with the prospect of problem tenants cited as a major concern.

The Early Edition12:24Renters and landlords react to increase in the allowable rent increase for 2024

Starting in January, landlords will be allowed to raise rents up to 3.5%. That's up from last year's cap of 2%. Vancouver landlord, Sheryl Jager, and Mariah Javadi of the Vancouver Tenants Union weigh in.

"People just are like, no, I'm not getting into that, and they don't rent out space in their home," she said. "Imagine how much that would add to the rental stock if people were incentivized to add units in their home into the rental market."

Tom Davidoff, an associate professor at UBC's Sauder School of Business,says rent increases like the one announced by the province may prove to be a disincentive.

"The idea that rents can maybe permanently grow, due to policy, at a rate less than inflation might scale off investment in rental housing, which we don't want," Davidoff said.

Tenants call for change

Mariah Javadi, a renter and a member of the Vancouver Tenants Union, says she was disappointed by the announced increase.

"Wages are not going up 3.5 per centfor everyone, right?And what happens to those people? Where do they go?" Javadi said.

The rent increasedisproportionately affectspeople on a fixed income, she adds.

"The reality is that this is going to be the most devastating for the most vulnerable people in our society."

Javadi says she's glad to hear of landlordsrenting below-market value but saidthe fact that many homeowners need to rent part of their homes to make ends meet is a sign of how broken the housing market is.

"Tenants in these situations are not just mortgage helpers We're also people, and we also want our own housing security," Javadisaid.

"I think landlords in that situation should maybe be considering that perhaps the system that put them in that place in the first place needs to be changed."

A new report from Rentals.caand real estate consulting and data firm Urbanation found that the average rent in B.C. came in at $2,675 during the month of August, up 10.8 per cent in the past year. Vancouver alone saw the average asking price for a rental apartment hit $3,316 a month an increaseof 7.3 per cent.

The rent increase can be effective on or after Jan. 1, 2024.

The government says landlords must provide three months' notice to tenants and they are only allowed to hike the rent once a year.