Small Landlords Cannot Be Forgotten During This Crisis

The vast majority of rental housing providers in BC are small mom and pops.  These are real people providing critical housing and they are potentially facing huge financial consequences during this crisis.  The Government of British Columbia cannot simply ignore these folks.  Here’s one story.

Dear Premier, Ministers, and MLAs,

With increasing alarm this week, I am reading news reports implying that the BC government is considering ways to let tenants avoid paying their rent with virtually no recourse for landlords.

I am a homeowner with a rented secondary suite (coach house).  Having a secondary suite is the only way many of us in the Lower Mainland can afford a home and qualify for a mortgage.  I would face financial difficulties if the BC government decides to allow my tenant to choose if and when to pay their rent.

Please note the mortgage lending rules in these situations – to qualify, the bank required proof of my rental income amount and its stability.  The following documentation was required:

  • Residential tenancy agreement, with latest rent increase notice
  • Bank statement showing a history of continued monthly deposits matching the rental amount
  • Income tax return showing rental income & expenses

In these situations, the granting of mortgages takes into consideration standard provincial laws which allow landlords to replace tenants who do not pay their rent.  I have copied CMHC and the Office of the Superintendent of Financial Institutions to bring to their attention the alarming reports of pending moratoriums on eviction from private housing for non-payment of rent.

During this crisis, it is understandable for governments to place a moratorium on evictions from public housing, as the US has done. When housing is owned and operated by the State, the financial impact of unpaid rent is absorbed through subsidizing by the entire tax base.

This week Canada’s 6 largest banks did not announce that Canadian homeowners can stop making their mortgage payments until the COVID-19 crisis is over.  Nor did they promise that they will help every mortgage holder affected by COVID-19.  They didn’t commit to waiving or discounting interest owed on any missed payments.  The banks only said they would consider hardship situations on a case by case basis, and the reported criteria did not include employed homeowners whose tenant stops paying rent.

Not all renters have lost their jobs or had to close their businesses due to COVID-19. Many continue to fill important needs such as staffing food stores, produce shops, and pharmacies.  Others continue to be paid while teleworking or converting storefront to online sales.  Some employers are continuing to pay their employees who have been sent home because their workplace closed, even though their work cannot be done via teleworking.

If the BC government is considering some sort of financial assistance to renters, it should be for those whose livelihood has been suspended because of the public health measures taken by government to contain COVID-19.  Because these drastic measures were imposed by government, government needs to provide compensation to those whose income has been interrupted.  This is the most logical use of funds from the BC Speculation & Vacancy Tax, which was put in place to meet housing needs for British Columbians.  Renters whose income has been interrupted because of the COVID-19 containment measures should be allowed to access emergency provincial funds to supplement the new federal programs announced this week, so they can continue paying their rent during this crisis.

No one is advocating that Canadians should lose the roof over their head in the middle of the COVID-19 crisis.  What I am asking is that you:

  • Fully consider the unintended consequences of the ideas put forth in well-intentioned but narrowly-focused petitions that lack analysis of their impact on all affected parties; and
  • Take action to prevent all foreseeable unintended consequences when developing policies and programs which balance the needs of all affected BC residents.

Thank you,

Delta, BC