RTA Maximum Rent Increase Woefully Inadequate
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INTRODUCTION
The residential rental housing sector is on a negative financial trajectory. Some of the highest cost increases faced by our sector include property taxes, utilities, and insurance. LandlordBC has long expressed concern that operating expenses that are driven by local and provincial governments, and are thus out of our sector’s control, significantly impeding our ability to deliver affordable rental housing for British Columbians. While we are very sensitive to the challenges many renters are experiencing finding safe and affordable rental housing across BC, the ability for rental housing providers to better cover cost inflation is critical for the continued viability of the rental housing ecosystem.
The purpose of this analysis is to demonstrate how much higher the actual operating expense increases of a typical purpose-built rental apartment building in Metro Vancouver have been over the last five years compared to the maximum annual allowable increase under the Residential Tenancy Act (RTA) rent control formula that was 2% + CPI Inflation until 2018. In 2019, in response to a recommendation by the Rental Housing Task Force, the BC NDP government reduced the maximum annual allowable increase formula to cap at the Consumer Price Index for BC (CPI). Then, as part of its response to the COVID-19 pandemic, the government froze rent increases entirely from April 2020 through to the end of 2021.
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