A British Columbia court has ruled that recently enacted Vancouver bylaws prohibiting rent increases between residential tenancies, a measure referred to as vacancy control, fall outside what the city is entitled to do.
The Aug. 3 Supreme Court of British Columbia judgment in 0733603 B.C. Ltd v. City of Vancouver, 2022 BCSC 1302 involved a dispute between two owners of privately-owned Single Room Accommodation (SRA) residential buildings, many of which house low-income tenants, and the City of Vancouver over municipal rent control. The petitioners took the City to court in a bid to have the recently enacted bylaws quashed.
The City had argued it had the ability to enact the bylaws via the Vancouver Charter, which provides for “a broad power to regulate business.”
The petitioners maintained that the City was out of its jurisdiction in making the bylaws because jurisdiction for residential tenancies rest with the Province and are covered by the province’s Residential Tenancies Act (RTA).
In court, the two petitioners pointed to s. 272(1)(f) of the Vancouver Charter, arguing that the City’s legislative authority is limited to areas not already regulated by the province. The City, on the other hand, maintains it can regulate businesses in areas of overlapping jurisdiction — “if doing so does not lead to the impossibility of dual compliance.”
In December 2021, acting on recommendations from a city staff Vacancy Control Report, Vancouver implemented the disputed bylaws, which imposed vacancy control on privately-owned SRAs. In certain cases the bylaws forbade SRA operators from increasing rent during vacancies any more than the rate of inflation.
B.C. Supreme Court Justice Karen Douglas found the City’s enacting of the bylaws to be unreasonable, and thus invalid. Justice Douglas found the enactment of the bylaws to be in conflict with the province’s RTA.
“Rent control is regulated by the RTA,” she wrote. “I agree with the petitioners that the City is prohibited from legislating, by using its business licensing power, to regulate persons who are already subject to regulation by the Province, directed at the same dominant purpose, even if it is possible to comply with both legislative schemes.”
Justice Douglas also turned to legislative history.
“I accept that the legislative framework in the RTA is not exhaustive and contemplates other legislative and regulatory schemes which address residential tenancies and overlapping and complementary jurisdiction. … A review of the legislative history to the RTA is instructive. Municipalities originally had express authority to legislate certain aspects of residential tenancies, such as security deposits and rent control. This power was removed by enactment of the Landlord and Tenant Act, R.S.B.C. 1960, c. 207, an early form of the RTA.”
LandlordBC has long argued that vacancy control would sound the death-knell of the rental housing ecosystem stalling all health, safety and sustainability investment in the existing rental stock, and push pension funds and other lenders to seek purpose-built rental investment opportunities in jurisdictions where no such restriction exist. We are pleased to see that Justice Douglas communicated in her decision, in no uncertain terms, that the regulation of residential tenancies is the jurisdiction of the Province, and further pleased that the BC Government understands the serious negative consequences vacancy control would represent for renters and the economy.