This emailed letter was forwarded to LandlordBC CEO David Hutniak September 23, 2018. It was written by a Delta, BC resident who requires a secondary suite so that they can afford to keep their home. Secondary suites are critical to the provision of long term rental housing in BC. This letter was sent to Housing Minister Selina Robinson and Delta Mayor Lois Jackson. The writer’s name has been withheld to protect their privacy.
Dear Minister and Dear Mayor,
The purpose of my email is to plead (1) for support from both your governments for homeowners who provide much-needed legal rental units in their principal residence, and (2) to leave the rent increase formula alone to prevent homeowner bankruptcy.
Unlike the protestors featured in recent news clips who have time during working hours to picket noisily, I am one of the silent majority of working-class tax-paying BC homeowners who are required to work all day every day to pay our mortgages – we do not have the luxury of parading in front of TV cameras to capture your attention.
Those protestors claim that wage increases aren’t in step with rent increases. News flash: Bank of Canada mortgage rate increases aren’t in step with my wage increase either. What is being done about that root cause? Who is holding the Bank of Canada accountable for the effect of interest rate increases on the cost of keeping a roof over one’s head in Vancouver (whether owner or renter, we’re all affected by their decisions to increase borrowing rates faster than the cost of living)?
I was a renter for 28 years before I could save up a down payment to get into the housing market in the Lower Mainland, and then only with a 40-year amortization on my mortgage and a rental suite to help carry the costs. During my 28 years as a renter, every year my rent increased by the formula set by the provincial government (usually at least 5%). Like every other human whether homeowner or renter, I had to make sacrifices to keep a roof over my head. It meant commuting long distances by inconvenient and ill-timed public transit, living in undesirable units in far-flung suburbs, working full-time plus extra jobs coupled with disciplined budgeting, until gradually over decades one manages to cobble together a down payment to get into the property market.
My mortgage is up for renewal in a few months. Since I bought my home 4 years ago, interest rates are already a full percentage point higher than my current mortgage. I will soon have to pay a whopping minimum 17% increase in my mortgage payments, and that is ONLY IF the Bank of Canada does not raise rates between now and when my mortgage term ends. My situation could easily be far worse at mortgage renewal – I may have to pay 25% higher payments.
I cannot fathom how anyone can do the math and come to the conclusion that a mere 4.5% increase in the rent paid by my tenant next year is out of touch with reality. Those who are out of touch with reality are those who do not bother to understand the costs of financing the roof over their heads.
I ask you to walk a mile in my shoes:
- Like every other working-class homeowner in the Lower Mainland, you borrow money from the bank to buy a place to live, which includes a rental unit because without it you cannot pay a mortgage in the Lower Mainland – you are dealing with yearly cost increases that have no link whatsoever to inflation rates (rising mortgage rates responding to global economic pressures, property tax increases to cover capital cost replacement of area infrastructure, property insurance that jumps higher with every disaster, plus repairs for everything in your tenant’s home and your own that wears out, while trying to set aside some allowance for lifecycle maintenance of all aspects of your property).
- To cope with all this stress without becoming insolvent, you make every conceivable sacrifice to ensure your housing costs are met before all expenditures including food, lest you lose your home to the bank.
- Now I ask you to impose on yourself the notion that your tenant should live in utopia with their annual rent increase limited by whatever the Canadian inflation rate is based on life in much cheaper cities.
- Tell me: How long it will take before you are bankrupted by this unsustainable and fiscally irresponsible notion of renters’ utopia?
- What is the provincial government doing to elicit action by the federal government to mitigate the trickle-down effect of rising Bank of Canada rates on mortgage rates flowing through to the cost of rental housing in the very markets where it is trying to cool home sales?
- What is your ministry doing to educate renters regarding the realities of what drives the cost of rents, so they can make realistic decisions about where they can expect to live?
- What adjustments is the government making to the homeowners’ grant to ensure it is equally proportionate to the cost of municipal taxes for every British Columbian?
- What is the City of Delta doing to cap the increase in property taxes and municipal utilities to the rate of inflation?
- What tax breaks is the City putting in place to help homeowners who provide rental accommodation on property that is their own principal residence?
Please remember: I did not cause the housing problem in Vancouver. I am part of the solution (providing desirable accommodation kept in a good state of repair with a stable happy tenant); I am not part of the problem, so don’t penalize me.
For every citizen who feels strongly about an issue and takes the time to articulate their concerns to authorities, there are hundreds more who hold the same view but have too many competing responsibilities to put their concerns in writing.
Note: The writer’s name has been withheld to protect their privacy.