Written for Daily Hive Urbanized by Beau Jarvis, President of Wesgroup Properties.
We face serious challenges in the Lower Mainland rental market. There are not enough rental units and many buildings are so old they can barely stand.
Most rental housing in British Columbia is between fifty and seventy years old, as rental homes essentially ceased to be built in the 1980s. Between the 1950s and 1980s, the federal government granted tax credits for builders, thus contributing to the viability of new rental constructions. When that stopped, much of the development of new rental homes came to a halt. Developers began to focus on building condos, which were less risky and more profitable. Now, much of our province’s rental stock is nearing the end of its useful life.
Some have a low opinion of developers and landlords and while there are unethical groups in every industry, the fact is that a majority of developers and building operators are fair and ethical businesses who are passionate about rental housing.
I want to reinvest in our older rental stock, make it sustainable, while helping buildings last longer as healthy homes for tenants. To do this, we must advance a fair policy regarding older housing; however, we face serious obstacles.
Developers and building owners are facing unprecedented and ongoing cost increases in almost every area. Looking at the operating costs of older rental properties in our portfolio over the past two years, we see common examples such as insurance increases of over 100%, increases in water and utility costs. sewer by 85% and property taxes increasing by 10% to 70%. . The authorized rent increases during this same period were 0% and 1.5% respectively. One thing is consistent in business; operating expenses greatly exceeding overall revenue do not work. It’s not a sustainable business model, whether you’re making shoes, cars, or building houses.
Because buildings are getting so old, there are also increasing expenses such as replacing the roof, boiler and heating system. With all of this, I have yet to see a meaningful and balanced policy or regulation implemented by any level of government that incentivizes or supports a landlord to reinvest in older buildings.
I recognize that tenants also face serious challenges as we recover from the pandemic. Some have had to change careers completely, grocery and gas prices have gone up, and with the lack of rental housing, costs are high and the ability to find a decent home is extremely difficult.
Landlords have also suffered the effects of the pandemic for a long period without any authorized rent increases, as required by the government, while costs have gone unchecked. Ironically, one of the biggest cost increases has been property taxes.
We need a balanced approach that considers both landlord and tenant needs. We need to work together as soon as possible. It is vital that we stop creating policy silos that are reactionary in nature. If BC building owners are trying to preserve and maintain older, more affordable housing, we need to stop creating a political environment in which it is nearly impossible to operate. We need the government’s continued support and involvement to ensure a safe and strong supply of older rental housing.
We need to bring everyone together to educate each other about our needs and challenges. The government must also advance policy focused specifically on our province’s aging rental stock and support the private rental sector by providing a sustainable model for reinvestment.
I propose a task force made up of tenants, tenant advocacy groups, landlords, apartment building advocacy groups, politicians, policy makers, and residents of all ages and backgrounds. Let’s connect at various times, in person and on digital platforms, to ensure a more diverse group can participate. There should be a series of teaching and learning opportunities, where all perspectives are shared.
We must work to create a strong and fair policy for tenants and landlords. Remember that both parties have a symbiotic relationship; One cannot exist without the other. Canada relies heavily on the private sector to provide housing. Even if we wanted to change that, it would take decades and unfathomable amounts of public funding to do so. I propose to work together to create a sustainable operating environment for all.
I am passionate about finding common ground and understanding what everyone is going through versus a one-sided approach where we hear very little about the realities the industry faces and how much most of ‘between us are passionate about fairness, transparency and productivity. dialogue.
Almost everyone agrees that we need more rental housing, but in the meantime it is essential that we invest in the large number of older homes that make up the majority of our market, while respecting the needs of the tenant and the realities of the owner.