Q:How will landlords make money?
A: Real Rent Control is not going to put a single landlord out of business.
Given current rental rates across BC, landlords both large and small will continue to do brisk business under a system of Real Rent Control. Landlords in B.C. are already permitted to increase rent with inflation each year [2.5% for 2019] - a raise that is higher than most workers' wage increases. Plus, the Residential Tenancy Regulation protects landlords from operating at a deficit, and can be granted additional rent increases when their balance sheet falls into the red (RTR Section 23.1).
Q: Won’t landlords then just let their properties fall into disrepair?
A: Research suggests that rent control measures can even lead to increased building maintenance
Current laws allow Landlords to apply for additional rent increases in circumstances where landlords need to make expensive repairs to keep their property safe. But vacancy control will ensure that these repairs are truly necessary and not just fake or cosmetic improvements used as an excuse to renovict tenants. Research suggests that rent control measures can even lead to increased building maintenance because landlords under rent controlled tenancies appreciate the stability of their tenant base and develop more positive relationships to their tenants. The province of B.C had Vacancy Control (what we are calling for) from 1973-1984, and it did not negatively affect building maintenance.
Won’t it stop new construction of new rental units?
A1: History tells us that rent control has little effect on private rental housing construction
Landlords and developers are often quick to cite the economic principle of supply and demand in discussions about rent control, saying that limiting rent increases will discourage the market from investing in more rental housing. The problem with this theory, is that history has consistently proved it to be false. British Columbia had vacancy control from 1974-1983, and after it was abolished, the market failed to respond. An in-depth study of BC's rent control laws found that there was no significant correlation between rent control policies and private investments in rental housing.
A2: Vacancy control does not apply to new construction.
It places no cap on new rental housing, so additional market housing can still be rented out at whatever the market will bare. Developers will still have that incentive to build new units. Like any other business, landlords need to account for standard expenses and maintenance. Instead of claiming that they need to evict tenants in order to meet their expenses, Real Rent Control will promote more responsible business planning and building purchasing for landlords.
Why not simply subsidize renters who need it?
A: Without real rent control, the range of people who would rely on these subsidies would only continue to expand indefinitely.
Without Real Rent Control, subsidies like BC's proposed renters' rebate would be taken out of the pockets of those who need it and simply go into the pockets of people who already own property (Landlords). Instead, real rent control costs nothing to implement and maintain, and will naturally improve affordability over time, gradually reducing the necessity for such subsidies.
This seems like a radical step, aren’t there other solutions?
A: Real Rent Control is not a radical step. A system of vacancy control was used in BC in past decades, and still exists today in Quebec, Manitoba, and PEI.
Comparatively, other global cities facing housing crises have taken much more aggressive measures. For example, Berlin, Germany implemented a law to slow localized rent increases by establishing that rents cannot be raised more than 10% above the average for the area. Meanwhile, New York City had a rent freeze for two years, and continues to maintain an eligibility-based rent-freeze program
Currently, 1 in 5 BC renters spend more than half their income on rent. A crisis like this requires bold solutions!