The residential rent freeze the B.C. government imposed nearly 18 months ago, due to the COVID-19 pandemic, will be lifted come January 2022.
But residential landlords in B.C. will be restricted to a mere 1.5 per cent rent increase next year, down from an expected 2 per cent added to the inflation rate.
The lower rent increase threshold was announced by the province September 8.
Canada’s official inflation rate as of August 8, 2021, was 3.6 per cent, according to Statistics Canada. The forecast is for a 2.4 per cent inflation rate next year.
Rent increases can't take effect until January 1, and landlords must provide three full months' notice of any impending rent increase.
This will be the first increase landlords will be allowed to impose to tenants since the government imposed a rent freeze in May of 2020.
"The 2022 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," a government news release stated.
Prior to that change, maximum rent increases could include an additional 2 per cent on top of inflation."
The practice of "illegal renovictions" — evictions to complete renovations to a property — has also been banned.
Landlords are required to apply to the Residential Tenancy Branch for pre-approval before ending a tenancy.
Rents can only be increased once during a calendar year.
Mark Goodman, managing partner of Goodman Commercial Inc., which deals almost exclusively in Metro Vancouver multi-family buildings, provided an actual example of the expense increases paid by the owner of a 20-unit rental apartment building in Vancouver between 2019 and 2020.
• Property taxes: up 24 per cent;
• Insurance costs: up 36 per cent;
• Hydro costs (heat/electricity): up 16 per cent;
• Water and sewer costs: up 10 per cent; and
• Cleaning and sanitation: a 6 per cent increase.
The 1.5 per cent rental increase cap may be the last straw for some small landlords, Zac Killam, CEO of the Landlord Credit Bureau in Vancouver, has warned.
“All this will have the unintended consequences of reducing the amount of rental housing available,” Killam said this spring when B.C.’s rental renovations restrictions were announced. Killam said that many landlords offering the least expensive rentals – basement suites, for example – are bailing out of the rental business.
“The [government] has essentially taken the financial impact that tenants are facing and placed it on the back of small landlords,” Killam said.