Vancouver Rental Market Discussion

[svlt]

Originally Posted by Metro-One

Wow... so the average rent for a two bedroom in Vancouver is 110% my current monthly salary...

Luckily where I currently live my two bedroom apartment only costs 1/5 of my monthly salary.

Either everyone in Vancouver now makes around $15000 a month or something is really out of whack.

Every time I want to move back I read these stats and I feel I can stay at least a few more years in Asia...

You could do a $3200 rent on 8k of net monthly income (30% of gross, which should be around 10k or 120k combined salary), which isn't all that uncommon for dual income earners. Where it gets tricky is when you need to pay for daycare or one of the spouses can no longer work those hours to take care of the kids.

[SpongeG]

old article but a good read

COQUITLAM MAYOR RICHARD STEWART ON WHY WE NEED NEW HOUSING – NOW

AUGUST 24, 2017

Richard Stewart is the Mayor of Coquitlam, and authored this editorial. Learn more about Mayor Stewart here.

“Why are you letting the owner of that building demolish perfectly good housing?”
It’s a question we hear all the time. In Letters to the Editor, in emails, at Public Hearings. It’s a question with two distinct parts – “letting the owner demolish”, and “perfectly good housing”.

First off, Local Government can’t prevent the owners of a building from demolishing it. We can regulate how demolition takes place, we can require they take out a permit, we can set conditions, but if the owner wants or needs to demolish the building, the building will be demolished.

And the second part, “perfectly good housing”, I addressed in Part 1 of this discussion. I have never seen the demolition of a unit of “perfectly good housing”. Unfortunately, too much of the housing we call “perfectly good” is very far from today’s safety and livability standards. That is, none of it is perfect, and some of it isn’t even good.

But in any case, the challenge before us is much more complex than that. It’s a challenge that was both predictable and predicted — 35 years ago — but it’s a reality that society avoided.

“You can avoid reality, but you cannot avoid the consequences of avoiding reality.” — Ayn Rand

How did we get here?
We built almost no rental housing for 40 years, that’s how we got here.

Here in Metro Vancouver, almost all of our rental housing was built in the three decades from the 50s through the 70s. And then, for a variety of reasons, this region stopped seeing the construction of market rental housing. Some of it was the increasing cost of land in Metro Vancouver, and some was the ending of federal rental housing tax credit programs like MURB.

For that matter, some argue that excessive enthusiasm for programs like MURB contributed to today’s problem, by creating an oversupply in the 70s and 80s, which artificially lowered rents, thus making the development of market rental housing unviable for three decades.

The same held true in Coquitlam. In fact, with the exception of a project in the 80s where Cressey rebuilt a rental building that had been damaged in a fire (at Schoolhouse and Brunette), Coquitlam saw virtually nobody stepping up to build market rental housing from about 1980 through 2015. As a result, all our purpose-built market rental housing stock is 40 to 60 years old.

Like most products with a “used” market (for example, used cars), the price of rental housing drops as it ages, as it becomes less attractive to consumers, and more costly to repair/maintain. Of course, market price always relates to demand, and if you go into the typical 40-year-old market rental building, you’ll see why rents are lower, why fewer people want to live in some of our oldest rental housing.

...

https://urbanyvr.com/coquitlam-affordable-housing-mayor

[Klazu]

I hope everyone is getting raises this year to compensate for this...

"Residential tenancy rent increases that take effect in 2019 are allowed to a maximum of 4.5%."

https://www2.gov.bc.ca/gov/content/housi...enancies/during-a-tenancy/rent-increases

[SpongeG]

it's only .5% and it only matters if your landlord raises the rent, many don't. My old landlord never raised it for 8 years, but the last 4 years I lived there he did and could only do so 4%. We have rent control in BC. Unlike Alberta that can raise it whatever they want or the market demands.

People on facebook are idiots who have no clue how this works and are freaking out over nothing. One woman said stop building rental apartments then. Like omg. or people saying BC is too expensive this is going to cause an exodus. They have no idea how this works or that they have been living with 4% all these years?

Anyway Alberta has no rent control and back when Calgary was booming and the rental demand was higher I remember reading about a guy who made decent money but was living in his car because his basement suite went from $800 to $1200 as they can raise rent whatever there. If it was BC they could have only raised it $32 which isn't the end of the world.

[misher]

Originally Posted by SpongeG

it's only .5% and it only matters if your landlord raises the rent, many don't. My old landlord never raised it for 8 years, but the last 4 years I lived there he did and could only do so 4%. We have rent control in BC. Unlike Alberta that can raise it whatever they want or the market demands.

People on facebook are idiots who have no clue how this works and are freaking out over nothing. One woman said stop building rental apartments then. Like omg. or people saying BC is too expensive this is going to cause an exodus. They have no idea how this works or that they have been living with 4% all these years?

Anyway Alberta has no rent control and back when Calgary was booming and the rental demand was higher I remember reading about a guy who made decent money but was living in his car because his basement suite went from $800 to $1200 as they can raise rent whatever there. If it was BC they could have only raised it $32 which isn't the end of the world.

You can’t put in too many rules to defend renters or people will stop renting. Our supply is already very low, you don’t want to dissuade rental owners further. Instead of putting in new protection laws the government needs to give perks to promote rental housing. Or offer programs like rental income tax rebates in return for below market rents.

Also many of the old rental buildings are extremely scary. They are made of wood and have a ton of hidden issues hidden in the walls. I was shocked when I found out that some don’t have in unit sprinkler systems and many are 4+ stories woodframe buildings lacking many modern safeties such as adequate fire breaks or detection systems. Demolishing these death traps should be a priority even if it’s politically incorrect. The strong real estate market was actually great safety wise as it demolished many of the buildings that were built to oldschool fire codes and put up buildings with modern safety systems in their place. These old buildings burn down like matches which you almost never see on new ones.

[Klazu]

Originally Posted by SpongeG

It's only .5% and it only matters if your landlord raises the rent, many don't. My old landlord never raised it for 8 years, but the last 4 years I lived there he did and could only do so 4%.

Count yourself lucky, as I would say it being exceptional that a landlord does not raise the rent annually by the maximum amount. Every unit we have lived in, the price has gone up by the maximum amount every single year. And at the level the rents are at today, that 4.5 is easily $100-200 more per month. It adds up very quickly, making things even more unaffordable.

[retro_orange]

Originally Posted by SpongeG

it's only .5% and it only matters if your landlord raises the rent, many don't. My old landlord never raised it for 8 years, but the last 4 years I lived there he did and could only do so 4%. We have rent control in BC. Unlike Alberta that can raise it whatever they want or the market demands.

People on facebook are idiots who have no clue how this works and are freaking out over nothing. One woman said stop building rental apartments then. Like omg. or people saying BC is too expensive this is going to cause an exodus. They have no idea how this works or that they have been living with 4% all these years?

Anyway Alberta has no rent control and back when Calgary was booming and the rental demand was higher I remember reading about a guy who made decent money but was living in his car because his basement suite went from $800 to $1200 as they can raise rent whatever there. If it was BC they could have only raised it $32 which isn't the end of the world.

The rate cap changes by year. If he charged you %4 each year for the past 4 years he was taking too much for 4 of the 4 years and was likely trying to make up for the years he did not raise the rent, which is illegal.

From the BC housing and tenancy website:

Previous Maximum Rent Increases

The following table outlines the maximum allowable rent increases for the past few years:
Year / Maximum Allowable Rent Increase
2018 4.0%
2017 3.7%
2016 2.9%
2015 2.5%

2014 2.2%

2013 3.8%
2012 4.3%
2011 2.3%
2010 3.2%

Landlords may not retroactively apply a rent increase. If a landlord did not issue a rent increase in the previous year, or issued a rent increase that was less than the amount allowed by law, they cannot later apply a rent increase to catch up.

https://www2.gov.bc.ca/gov/content/housi...enancies/during-a-tenancy/rent-increases

In other words, by law you can now take your landlord to court for the amount you overpaid each month for the past 4 years and as long as the total amount surpasses the $100 fee for submitting a claim to the tenancy branch (and the few hours required to follow through) I suggest you either confront him regarding the amount he overcharged you or file a claim sooner than later.

[SpongeG]

yea but you rent swanky expensive places, you can still rent much cheaper places.

[SpongeG]

Originally Posted by retro_orange

My Dear

The rate cap changes by year. If he charged you %4 each year for the past 4 years he was taking too much for 4 of the 4 years and was likely trying to make up for the years he did not raise the rent, which is illegal.

From the BC housing and tenancy website:


https://www2.gov.bc.ca/gov/content/housi...enancies/during-a-tenancy/rent-increases

In other words, by law you can now take your landlord to court for the amount you overpaid each month for the past 4 years and as long as the total amount surpasses the $100 fee for submitting a claim to the tenancy branch (and the few hours required to follow through) I suggest you either confront him regarding the amount he overcharged you or file a claim sooner than later.

no he only charged me whatever rate it was at that time, The article I read says the cap has been 4% since 2004 so perhaps the article has it wrong?

The amount it went up was so minimal, the place was a bargain. Since moving out in 2012 its doubled to what I got it for in 2000.

[retro_orange]

Originally Posted by SpongeG

no he only charged me whatever rate it was at that time, The article I read says the cap has been 4% since 2004 so perhaps the article has it wrong?

The amount it went up was so minimal, the place was a bargain. Since moving out in 2012 its doubled to what I got it for in 2000.

Yeah the amount overcharged would have been much less almost 10 years ago when rental rates were reasonable.

I am mentioning it because this rate cap system and the way it is implemented is often entirely unknown or misunderstood by many and many have been taken advantage of because of this.

[misher]

Originally Posted by SpongeG

yea but you rent swanky expensive places, you can still rent much cheaper places.

In 2016 for the low rise wood buildings in marpole units were renting for 800-1000 for studios, 850-1400 one bedrooms, and 1000-1600 two bedrooms. There not new though and have little in the way of renovations.

In Vancouver if you look around you can still rent places for under 1000. In 2017 I was going to move into a 1100/month+$50 for parking downtown 5th floor 530sqft studio by burrard and Robson in an older concrete high rise but my situation changed.

When people talk about $2000/month one bedrooms I think that must be yaletown or new buildings? I’ve never experienced that and think people are crazy to pay a lot more for new. Or I guess there referrals aren’t good enough to get into the “good deal” places?

[SpongeG]

Yes I understand that, but renter beware. I've heard people say they paid first and last months rent and in BC you don't do that, you only pay a security deposit which you get back when you move out, so upon moving in you only have to pay first months. Perhaps people from Ontario where that is the norm just didn't educate themselves on rental rules in BC. And when renting a unit from an owner you are more likely to run into those issues but again its your responsibility to know your rights.

Reading on facebook though people are freaking out that everyones rent is going up 4.5% which is possible but it has been going up 4% for a few years anyway which most people don't seem to be aware of or have just not been paying attention to. It's just weird that people don't know or understand how it works. Like saying stop building rental buildings, that will only make the rental options fewer and increase the prices, whereas we need more rentals to keep prices down.

Luckily in Coquitlam unlike Burnaby most of the new developments are having to include rental units. Such as the one-two tower development being built down the street from me. They are replacing two rental buildings that I think had maybe 80 units in the two of them with a rental tower of 200 units. That will affect the area's rates but they are at least adding more units than they are taking away. Another proposal will be removing 200 rental units but replacing them with 1000 rental units up in Burquitlam. Another development is entirely new and will be adding 100+ units that never existed in the area. Etc.

The building i live in is all 2 bedrooms and the current rate is $1300. Back in 1996 it was $650 for the same unit. The landlord only started to put up the rates when skytrain opened about a 5 minute walk away and had to start doing repairs etc as the building is getting older but that area rentals are still affordable I think for greater vancouver. Rents in the surrounding buildings are all in the same price range.

[WarrenC12]

Originally Posted by Klazu

Count yourself lucky, as I would say it being exceptional that a landlord does not raise the rent annually by the maximum amount. Every unit we have lived in, the price has gone up by the maximum amount every single year. And at the level the rents are at today, that 4.5 is easily $100-200 more per month. It adds up very quickly, making things even more unaffordable.

Really? I've never done that or had it done to me. The last place I rented 2010-2016 the rent was never increased. I just increased it the 2nd time on my tenant of 5 years.

[WarrenC12]

Originally Posted by retro_orange

The rate cap changes by year. If he charged you %4 each year for the past 4 years he was taking too much for 4 of the 4 years and was likely trying to make up for the years he did not raise the rent, which is illegal.

From the BC housing and tenancy website:

https://www2.gov.bc.ca/gov/content/housi...enancies/during-a-tenancy/rent-increases

In other words, by law you can now take your landlord to court for the amount you overpaid each month for the past 4 years and as long as the total amount surpasses the $100 fee for submitting a claim to the tenancy branch (and the few hours required to follow through) I suggest you either confront him regarding the amount he overcharged you or file a claim sooner than later.

Ya I had to do that to an old landlord way back in the day. They will give you 100% of the increase, even if you've paid it. And don't sweat the fees, they will have to pay you back for those too. It's a total slam dunk.

There is only one form that will allow a rent increase beyond the posted rate, and that must be signed by both parties and indicate the reason.

[WarrenC12]

Originally Posted by SpongeG

no he only charged me whatever rate it was at that time, The article I read says the cap has been 4% since 2004 so perhaps the article has it wrong?

The amount it went up was so minimal, the place was a bargain. Since moving out in 2012 its doubled to what I got it for in 2000.

A simple google search shows the historical rates:

https://www2.gov.bc.ca/gov/content/housi...enancies/during-a-tenancy/rent-increases

It's always inflation (CPI I guess) plus 2%.

[WarrenC12]

Originally Posted by SpongeG

Reading on facebook though people are freaking out that everyones rent is going up 4.5% which is possible but it has been going up 4% for a few years anyway which most people don't seem to be aware of or have just not been paying attention to. It's just weird that people don't know or understand how it works. Like saying stop building rental buildings, that will only make the rental options fewer and increase the prices, whereas we need more rentals to keep prices down.

Rent controls protect existing renters at the expense of people looking to rent, and landlords.

[misher]

This letter from the Urban Development Institute to the City's Rental Task Force provides quite a bit of insight. I do like the point they make about the recent tax and regulatory framework causing uncertainty which may scare away rental developers.

http://udi.bc.ca/wp-content/uploads/2018/07/UDI-Ltr-July-6-2018-Rental-Housing-Task-Force.pdf

The quote below is interesting:

While the Government is introducing programs to further incent rental housing,
Budget 2018 includes several added costs for new rental projects. Currently, the
Speculation, School and Luxury Property Transfer Taxes apply to the development
lands of residential projects – including rental ones. Based on a recent analysis by 2
one of our members, added up, these taxes could add over $850 per year to a
tenant’s rent in a new project.

UDI is deeply concerned that further regulatory changes could add more
disincentives to building rental housing. The RTA as it is currently enacted, strikes an
effective and fair balance between protecting tenants and allowing landlords to
recover expenses, and in ideal circumstances generate a modest return on
investment. A key concern UDI has with potentially more changes to the RTA, is the
continued uncertainty it would bring. The Government has already made several
changes to the Act, including improving tenant rights during
renovations/redevelopment, putting limits on fixed-term leases and eliminating
geographic rent increases. In addition, the Government is increasing resources for
the RTB and enforcement of the RTA, which UDI strongly supports.
Further changes to the Act could undermine private sector investment in new rental
housing. The developers of these projects are impacted by risk far more and longer
than strata developers. Strata projects are risky, but only for a few years. Once the
developer closes on the sale of the units in a building, they receive their revenues, so
there is little to no further risk for them. A rental developer has to wait decades to
earn the revenues to pay back their land, construction, soft and financing costs. They
have to trust that over that time, the regulatory and tax framework will not radically
change; otherwise, they may choose to build other types of product, or worse, invest
outside of British Columbia.

As such, UDI strongly recommends against any further material changes to the RTA,
and specifically, UDI recommends protecting the 2%+CPI annual increase formula,
and the ability to adjust rates to market when a tenant concludes tenancy. Certainly,
if the Government considers more tinkering, or whole sale changes to the RTA that
impact these two policies, the shift away from rental will be immediate, and likely
result in thousands of rental units currently in the development pipeline to be forced
to switch over to strata condo development, as we have seen recently in Toronto.

[whatnext]

Originally Posted by misher

You can’t put in too many rules to defend renters or people will stop renting. Our supply is already very low, you don’t want to dissuade rental owners further. Instead of putting in new protection laws the government needs to give perks to promote rental housing. Or offer programs like rental income tax rebates in return for below market rents.

Also many of the old rental buildings are extremely scary. They are made of wood and have a ton of hidden issues hidden in the walls. I was shocked when I found out that some don’t have in unit sprinkler systems and many are 4+ stories woodframe buildings lacking many modern safeties such as adequate fire breaks or detection systems. Demolishing these death traps should be a priority even if it’s politically incorrect. The strong real estate market was actually great safety wise as it demolished many of the buildings that were built to oldschool fire codes and put up buildings with modern safety systems in their place. These old buildings burn down like matches which you almost never see on new ones.

Professional rental companies will always keep renting if there is demand. It's the amatuer property barons renting out one or two crappy condos that are the problem. As this study showed, many are too dumb to realize they're losing money and would have been better off investing it. They think they'll recoup their losses when they sell 'cuz property always goes up (until it doesn't).

PS the UDI is nothing but a shill for the developers and the real estate industry. Their credibility is zilch.

[misher]

Originally Posted by whatnext

Professional rental companies will always keep renting if there is demand. It's the amatuer property barons renting out one or two crappy condos that are the problem. As this study showed, many are too dumb to realize they're losing money and would have been better off investing it. They think they'll recoup their losses when they sell 'cuz property always goes up (until it doesn't).

PS the UDI is nothing but a shill for the developers and the real estate industry. Their credibility is zilch.

You are right that professional rental companies will keep renting. But this is separate from rental developers/owners may decide to stop building towers or invest less in the industry if its unstable or the pendulum swings too far and Owners lose all power. Our rental vacancy rate is close to 0 so cheaper rent isn't the problem right now, its supply. The government isn't going to pay for these rental towers so we need developers to be incentivised to build them.

As for the UDI, I would say they are a very important part of the process as they provide an entity that the city can consult in its development. Who better to consult with in development plans than developers and the real estate industry. If developers say you can't do this because no one will develop with those restrictions, its an important consideration.

An example is they wrote a nice letter to the Province regarding property transfer taxes here. http://udi.bc.ca/wp-content/uploads/2018/02/UDI-Ltr-Jan-29-2018-Minister-James-PTT-Bare-Trusts.pdf in it they pointed out that certain day-to-day business transactions would be harmed if the transfer tax applied to all transactions. One good point they made is how developers usually hold property with a company but transfer it to another company when developing which shouldn't require a transfer tax as its a normal industry process.

Who do you consult regarding real estate, business, development, etc? The UDI appears to offer a great perspective. You need to work with people when doing these things not see them as evil entities. Of course everyone is out to make a profit, but there's no reason you can't work together to reach a settlement. The more profit that can be made, the more housing we will have built. And we badly need more housing.

Also the less the government consults with industries before applying policies to those industries, the more chance there will be mistakes/backlash. Also the uncertainty/unreliability of the government will scare people away from doing business here.

[Changing City]

Originally Posted by misher

This letter from the Urban Development Institute to the City's Rental Task Force provides quite a bit of insight. I do like the point they make about the recent tax and regulatory framework causing uncertainty which may scare away rental developers.

You seem to be struggling once again in understanding different levels of government. The UDI letter was to The Provincial Government, not the City of Vancouver. They're referring to rental development across the whole of BC.