The housing crisis is worsening in Canada. Mortgage rates are through the roof, rentals are expensive and impossible to find, and the population is growing.
The vacancy rate for purpose-built rentals in B.C. is less than one per cent, while the average rent for a two-bedroom apartment $2,000 a month for a purpose-built rental and $2,500 for all others, a January rental market report from the Canada Mortgage and Housing Corporation (CMHC) found.
But here’s the most alarming statistic, found in the same report: rents for vacant units are now, on average, 43 per cent higher than those paid for occupied units and new renters paid, on average, 24 per cent more than the previous tenant.
“This represents a strong disincentive to moving for existing tenants, resulting in lower turnover,” the report says.
No kidding. It also is a huge incentive for landlords to try to get existing tenants to move out, so they can increase the rent as much as the market will bear.
Under B.C. laws, the allowable rent increase for 2022 was 1.5 per cent. But, of course, you must continue living in the same place to benefit from that law.
No one should be increasing the rent charged on a home by 40 per cent, simply because a tenant moves out, which is what these shocking statistics imply. To prevent this, I firmly believe rents should be controlled by the unit, as well as by the tenant.
I get it that costs are increasing for landlords too. Inflation sucks. But seriously, a city cannot function if average wage earners cannot afford to live in it.
The allowable increases per unit should be fair, but firm. In a year with inflation running near seven per cent, a limit of two per cent is probably placing an unfair burden on landlords — it means they’re earning less than they were the year before, which isn’t fair if it continues in the long run. Perhaps when a tenant moves out, the rent increase for the new tenant could be capped at 10 per cent — it’s quite a large increase, but nowhere near the 43 perc ent difference that’s happening now.
Addressing the housing crisis is going to require a massive increase in housing supply, at all levels: government-funded, low-income housing, market rental (at affordable rates), upmarket rental, reasonable homes to purchase and luxury homes.
I’ve been living in Metro Vancouver all my life. Housing has always been expensive to buy here, but not out-of-this-world ridiculous like it is now. And the rental market has always been tough, but there was always somewhere a person could find to rent for a fairly reasonable rate. That’s all out the window now.
What’s particularly concerning to me is that this crisis has been predictable since the late 1980s. Why do we not have enough supply? Clearly, the free market is not going to address this problem — while we’ve tried relying on the free market over the past 30 years, the crisis has just escalated. I remember talking to folks in the 1990s who were waiting for the “crazy” prices to crash. They’re still waiting.
Why aren’t all levels of government all over this, building, building, building? Real estate is a good investment and governments could be earning money too, but in a way that protects voters, who all need somewhere to live.
If we want people at all income levels to live here — not only gazillionaires — something will need to be done. Young people need some options, for both renting and buying. People who’ve lived in rental homes being torn down for redevelopment need options for where to live. It’s not tenable to rent somewhere for 30 years at a reasonable rent that goes up slightly every year, and then suddenly learn your complex is being torn down and you need to find somewhere else. What happens then, as the CMHC report shows, is that your rent is going to go up by about 40 per cent. That’s not tenable. Options must exist, rentals must be plentiful and affordable, and people should be able to buy a home when they earn an average income.
There’s no time to waste.