You Must Say No To Vacancy Control – A Letter to Mayor & Council
The following is a letter written by LandlordBC CEO David Hutniak, and sent to City of Vancouver Mayor and Council on November 9, 2018.
Dear Mayor and Council,
LandlordBC is the province-wide voice of the rental housing industry in British Columbia, committed to the provision of safe and sustainable rental housing in communities throughout BC. We are recognized for developing and maintaining a proactive and positive collaborative relationship with City of Vancouver Civic Leaders, senior City staff, and key stakeholders in the community. In recent years we have work diligently with the City and a broad range of stakeholders to enhance existing rental stock and combat the persistent shortage of secure rental housing in Vancouver. We are writing you today in regard to November 13, 2018 Motion On Notice entitled Protecting Tenants from Renovictions and Aggressive Buy-Outs. We wish to express our strong opposition to the resolutions proposed in said Motion and request that the Motion be rejected outright, in its entirety.
In the Motion, it is proposed that the City apply its Tenant Relocation and Protection Policy to all forms of rental accommodation and, in that context, prohibit the ending of leases by landlords undertaking renovations that require vacant possession of the unit. Vacant possession is typically necessary due to the complexity of the renovation and due to health and safety concerns for the tenants. The Motion further proposes dictating that such landlord must offer first right of refusal for the impacted tenant(s) to return to the renovated unit at their pre-renovation rent.
LandlordBC is on record for supporting the City’s robust tenant relocation policy, and we have encouraged other municipalities to look to Vancouver’s policy as a benchmark. However, the notion that tenants should be allowed to return to a fully renovated unit at their pre-renovation rent, is completely unreasonable and unacceptable. Setting aside the reality that such policy would freeze anything beyond bare maintenance investment in our already very old rental housing stock, in our view such measures infringe on the property rights of a landlord to invest in their asset, increases the landlord’s liability as it pertains to tenant health and safety and, contravenes the landlord’s rights under the Residential Tenancy Act (RTA).
In regard to the RTA, as it pertains to this Motion, it should be noted that the Province, through Bill 12 passed in May, 2018, provided significant additional protections for renters under the RTA in regard to renovations including additional notice (4 months vs 2 months), and strict penalties (12 months rent payable to the tenant) for landlord misrepresentations and/or failure to undertake the renovations that were stipulated as necessary to justify vacant possession. These additional protections were developed in consultation with LandlordBC and supported by LandlordBC.
The Motion further proposes that the City call on the Province to implement vacancy control. With vacancy control BC’s already prohibitive rent control legislation would become even more prohibitive by tying rent control to the unit. What this means is that the landlord would unfairly lose the right upon tenant turnover to try to move rents to market in hopes of recovering over time a portion of the cost of improvements to their asset, to offset their steadily increasing operating costs and, perhaps most critically, try to recover some portion of the increased costs that are entirely outside their control.
Whereas deferring maintenance, postponing upgrades to rental units, keeping that old inefficient boiler until it stops working, and reducing staff are all costs that a landlord can control, a significant portion of a landlord’s costs are outside their control. We are of course referring to municipal and provincial taxes and fees like property taxes, payroll taxes, income tax rates, licensing fees, permit fees, inspection fees, etc, etc., all of which continue to increase substantially at the discretion of the municipality and province. Vacancy control would, for all intents and purposes, negate the financial viability of a landlord’s rental business in British Columbia. Furthermore, vacancy control would spell the end of new purpose-built rental construction in BC at a time when we are finally starting to see some new rental housing being built, and in Vancouver most notably. Suspension of new purpose-built rental housing construction would be devastating for our community and further exacerbate the current rental housing supply crunch. Vacancy control would be devastating to all landlords especially the many small landlords that disproportionately represent the rental housing industry in BC. Sadly, it is the steadily growing population of renters who would ultimately suffer the most if this were to happen.
In closing, I wish to reiterate that LandlordBC requests that the Motion On Notice entitled Protecting Tenants from Renovictions and Aggressive Buy-Outs be rejected outright, in its entirety. We welcome discussing this matter in greater detail and look forward to continuing to collaborate with you to improve the state of rental housing in the City of Vancouver.
Sincerely,
David Hutniak
Chief Executive Officer
LandlordBC