The rent control powers in BC last week announced the allowable rental increase for the 2011 rental year:
Allowable Rent Increases for 2011
August 30, 2010
Conventional Residential Tenancies:
- For a conventional residential tenancy rent increase that takes effect in 2011, the allowable increase is 2.3 per cent.
- The annual allowable rent increase for conventional residential tenancies is determined by the formula in the Residential Tenancy Regulation.
This is down from last years 3.2% allowable increase.
Some of points to consider:
1. There has been no dedicated multi-family rental stock built in our market, and in fact most of the province, for over 30 years, primarily due to tax and rent control policies.
2. Much of the existing rental stock is made up of the small investor class who have 1 or 2 or 3 units in the market and rent them for cashflow.
3. Property taxes went up 4.31% for 2010.
4. The formula for rental increase in BC is inflation +2%
I think if you look at this you'll understand why there is no desire to build rental properties, and why there is less of an appetite for investor owned properties in our market than there has been in the past. Apparantly the inflation rate in 2009 was .3%, yet property taxes are up 4.3%. I know that hydro rates are up, cable rates are up and it costs more to maintain a property.
I don't think we should be like other jurisdictions where rents are raised by how ever much the market will bear at that point causing distress amongst tenants. But couldn't we find a happy medium where there is at least something it it for the homeowner? Then maybe we'd see affordable rental housing.
2.3%!
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