Task force recommends change to how rent hikes are calculated

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VANCOUVER (NEWS 1130) – B.C. should limit rent increases to inflation, according to a task force charged with examining the problem of housing affordability, as renters brace for potential record hikes to their leases.

The B.C. Rental Housing Task Force’s early recommendation says the rate hike formula of two per cent plus inflation is unworkable as the province attempts to curb rising housing costs.

The group, which began examining the issue in April, is also recommending allowing landlords to individually apply for additional increases if they can prove the cost of maintaining or renovating a building is above inflation.

“We believe this strikes the balance for the need for affordability for renters and the need to maintain properties,” said MLA Spencer Chandra Herbert, chair of the task force. “People were clear to us. They understand costs do go up, but they also need to be able to afford them.”

The task force is also recommending the Ministry of Municipal Affairs and Housing do more work with landlord and tenant groups to determine what will qualify for such additional increases and whether there will be a cap on the amount rent can ultimately be raised per year.

“What we’re recommending is that government work with landlords and tenants, look at the formula that they use in Ontario and Manitoba, and make a decision around should there be a cap, how much should the cap be (and) for how many years,” Chandra Herbert said.

The province only has six days to approve the recommendations before landlords can give three months notice of a 4.5 per cent rent increase for January. The government says a decision on these recommendations will be made by Oct 1.

David Hutniak, CEO of Landlord BC, says he is disappointed but not surprised by the task force’s steps to take another look at rental increases. He adds that costs for landlords increase more than the current allowable hike.

“We did a 10-year study and demonstrated pretty conclusively that our costs over that same period of time actually doubled versus what we’re allowed to pass on in terms of maximum rent increase,” he tells NEWS 1130. “That’s our only source of income.”

He is, however, encouraged by the possibility for landlords to apply for additional increases above suggested guidelines in order to finance some of the work older buildings need.

“They want us to continue to invest in our rental properties and the municipalities want us to do energy efficiency and retrofits,” Hutniak says. “Everybody cares about that old stock, as do we. To make all those continued improvements takes money.”

The BC Liberals have called for the removal of rent increase caps.

A full report by the provincial government, including more recommendations, is expected before the end of November.

with files from Simon Druker and Lasia Kretzel

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