BC Supreme Court strikes down Vancouver regulations limiting rent increases between single-occupancy rentals

A B.C. Supreme Court ruling overturned regulations put in place by the City of Vancouver in December to limit the amount landlords could raise single room rents (SRAs) between rentals.

A ruling this week by Judge Karen F. Douglas found that the city, under its Vancouver charter, does not have the authority to determine how a landlord changes rent for what is also known as ORS. – single occupancy units – where a tenant moves out due to conflicts with provincial residential tenancies law.

Vancouver’s new rent rules were enacted late last year and aimed to keep rents low for units designed to provide affordable housing for people with very low incomes and facing significant barriers. In 2019, there were approximately 6,680 SRA rooms open in 157 SRA buildings downtown.

In January, two landowners independently filed lawsuits against the city, arguing that the city had reached its authority. The two motions were heard together in April.

“I agree with the petitioners that the City is prohibited from legislating, using its business licensing power, to regulate persons who are already regulated by the Province, for the same overriding purpose. , even though it is possible to comply with both statutory regimes,” Douglas wrote.

Councilor Jean Swanson presented the original motion to council and said the measures are intended to prevent landlords from doubling or even tripling the prices of what are mostly three by three meter rooms with no kitchens or bathrooms. common bath.

Vancouver City Councilor Jean Swanson is pictured outside her home in Burnaby, British Columbia, Monday, Dec. 30, 2019. (Ben Nelms/CBC)

For rooms rented at $500 or more per month, the rent could only be increased at the rate of tenant turnover by the current rate of inflation in Vancouver, while for rooms rented above $375 and less of $500 per month, the rent could only be increased at the rate of tenant turnover by the current rate of inflation. inflation rate plus 5 percent.

On Friday, Swanson said she was disappointed and surprised that the court found the new regulations illegal.

“I think it’s devastating and I think homelessness is going to increase,” she said.

In a statement, the city said it was “disappointed with this decision” and plans to appeal.

Both petitioners declined to comment on the decision.

Rent increases are not keeping up with rising costs

One of the landowners who filed the lawsuit against the city, Pender Lodge Holdings Ltd, owns an SRO building in East Vancouver. It has 30 units, which are rented at an average rate of $563 per month.

Pender Lodge told the court it hadn’t raised rents for any tenants since 2017, but had increased rent between tenancies.

The cumulative average of these rent increases is about 2.5% per year, but these increases have not covered the building’s fixed costs, which the suit claims have increased by almost 35% over the of the past five years.

Maintenance and upgrades

A numbered company called 0733603 BC Ltd. presented the other petition. He owns an SRA building in Gastown, which has 60 micro-suites.

These are small, upscale self-contained living spaces, each with a separate bathroom, shower, and kitchen, and rent between $800 and $1,200 per month.

The company said in court that rentals are usually relatively short, and tenants are often students, young professionals and temporary workers.

He also said the property is nearly 60 years old and in need of significant maintenance and upgrading.

ultra vires

The crux of their legal arguments about the rent increase regulations was that the city had failed to reasonably interpret its legislative authority in areas already regulated by the province.

The provincial Residential Tenancies Act (RTA) regulates rent increases during tenancies, but “is silent on rent increases between tenancies,” according to the ruling.

In 2018, a rental housing task force determined that unit-linked rent control would have the unintended consequence of reducing the affordable rental stock or reducing investment in needed repairs.

Ultimately, Douglas ruled that Vancouver’s rent control bylaws were ultra vires – or beyond the power of – the city, and ordered their cancellation.

It also ordered the city to destroy any information and documentation it gathered in relation to the bylaws and awarded costs to both petitioners.

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