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BC Supreme Court Overturns Vancouver Bylaw Limiting Rent Increases Between Single-Owner Rentals

Written by Javed Iqbal

A decision by the Supreme Court of BC has invalidated bylaws introduced by the City of Vancouver in December to limit how much property owners could increase the rent of single-room accommodation (SRA) between tenancies.

A warrant issued this week by Judge Karen F. Douglas found that the city, under its Vancouver charter, does not have the authority to determine how a property owner changes rents for what are also known as SROs — single-occupancy units — when a tenant moves out. , due to conflicts with the province’s residential tenancy law.

The new Vancouver rent rules were passed late last year and were intended to keep rents low for housing designed to provide affordable housing for people who have very low incomes and face significant barriers. From 2019, there was approximately 6,680 open SRA rooms across 157 downtown SRA buildings.

In January, two property owners independently filed lawsuits against the city, claiming the city overreached its authority. The two petitions were dealt with jointly in April.

“I agree with the petitioners that the City is prohibited from legislating, using its business licensing power, to regulate persons already subject to provincial regulation directed toward the same dominant purpose, even though it is possible to comply both legislative schemes,” Douglas wrote.

Councilor Jean Swanson brought the original proposal to the council and said the measures was intended to prevent landlords from doubling or even tripling prices for what are mostly three-by-three-meter rooms without kitchens and shared bathrooms.

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

For rooms rented at or above $500 per month, the rent could only be increased by the rental turnover at the current rate of inflation for Vancouver, while for rooms renting above $375 and less than $500 per month month, the rent could only be increased by rental turnover with the current inflation plus 5 per cent.

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

“I think it’s devastating and I think homelessness will increase,” she said.

In a statement, the city said it is “disappointed by this decision” and is considering an appeal.

Both petitioners declined to comment on the ruling.

Rent increases do not keep pace with rising costs

One of the property owners who filed the case against the city, Pender Lodge Holdings Ltd, owns an SRO building in East Vancouver. It has 30 units that rent at an average price of $563 per month. month.

Pender Lodge told the court it had not raised the rent for any tenant since 2017, but has increased the rent between tenancies.

The cumulative average of those rent increases is about 2.5 percent a year, but those increases have not covered the building’s fixed costs, which have risen nearly 35 percent over the past five years, according to the lawsuit.

Maintenance and upgrades

A numbered company called 0733603 BC Ltd. filed the second petition. It owns an SRA building in Gastown that has 60 micro-suites.

They are small, high-end, self-contained living spaces, each with a separate toilet, shower and kitchen, and rent for between $800 and $1,200 a month.

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

It also said the property is close to 60 years old and requires significant maintenance and upgrading.

Ultra vires

At the heart of their legal arguments about the rent enhancement statutes was that the city did not reasonably construe its legislative authority to areas already regulated by the province.

The Provincial Residential Tenancy 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 rent controls attached to the unit would have the unintended consequence of reducing affordable rental inventory 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 them voided.

She also ordered the city to destroy any information and documentation it has collected in relation to the bylaws and awarded costs to the two petitioners.

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Javed Iqbal

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