New rent increase capped at 3.5 per cent, seemingly not welcomed by renters or landlords

A sign advertising a rental unit. (Shutterstock)

In an already tight, expensive rental market, landlords in B.C. will soon be able to increase their rent for existing tenants by three and a half per cent instead of the two per cent they're currently capped at.

The increase is still below inflation for the second straight year – which is a departure from when landlords were allowed to increase rent based on inflation -- or from prior to 2018, when they were allowed to increase rent by inflation plus two per cent.

“We know that renters are having a real tough time right now -- we also know that some landlords with the rising interest rates are having a real tough time,” said Housing Minister Ravi Kahlon, when announcing the new rental cap on Monday.

Landlords were hoping for a cap in the range of the 5.6 per cent calculated as average inflation for the year, and David Hutniak, the CEO of Landlord BC says mounting expenses could drive some landlords away from renting their places out.

“I would remind everyone that landlords are not immune the inflation and the effects of interest rates,” said Hutniak.

He says another concern is that with allowable rent increases changing so often, developers may be reluctant to build purpose-built rentals.

“They need certainty around annual rent increases,” said Hutniak.

On the flip side, with rents already at record highs, any allowable increase is tough for tenants, and this increase works out to several hundred dollars more a year for most tenants.

“It’s going to be an increase that’s going to hurt many tenants if they’re already stretched to the max,” said Douglas King, a housing advocate with Together Against Poverty in Victoria.

King says what’s most important, however, is a cap on how much landlords can jack up rent in between renters.

“We’re seeing more and more pressure on landlords to evict tenants to try and get the rent as high as possible,” said King.

Premier Eby today characterized setting rent caps as a tricky balance.

“The realities faced by renters of increasing costs on many fronts and the realities faced by landlords of many increasing costs -- and their decision perhaps not to continue renting,” said Eby at a press conference in Kamloops.

The new rent hikes can take affect as of this upcoming January -- as long as landlords give proper notice, three months in advance.