A month into the COVID-19 crisis, and renters’ advocates and landlords say it feels a bit like the calm before the storm.
Most residents of Vancouver were able to pay their rent or mortgage payments for April. But for many, May 1st will be the test as to how hard the coronavirus pandemic is hitting people financially, and in turn, how it will ultimately impact every aspect of the housing system, including property taxes.
LandlordBC conducted a survey of 476 landlords. Three-quarters of the landlords surveyed owned or managed less than 10 units. Of those respondents, 64 per cent said that they’d collected 100 per cent of April rent; about one-quarter collected half or more of April rent; and 10 per cent collected no rent for April.
One-quarter of the landlords surveyed had entered into a rent-deferral agreement with their tenants.
“While this is hardly a positive outcome, it is slightly better than what we were anticipating,” said David Hutniak, chief executive officer of LandlordBC. “We are very concerned that the trend will worsen in May, June and beyond, with no backstop from either the provincial or federal government for our sector, or for renters, other than the renter grant from B.C., which is a very positive step but deficient in terms of actual monthly rents.”
Mr. Hutniak says that it will be difficult for landlords to recoup any lost rent. He’s calling on government to introduce a tax rebate program to mitigate some of that rent deficit. As well, he’s asking for “more generous grants for renters.”
The provincial rent supplement is up to $300 per household, and up to $500 per household for those with dependents, paid to the landlord. With average rent for a one-bedroom in Vancouver at $2,006 (according to the National Rent Rankings report), it’s small relief.
The federal government announced last week an emergency commercial rent relief fund for small businesses, and Mr. Hutniak would like to see a similar federal rent fund for residential renters.
Many small landlords have mortgages, and mortgage deferrals are generally not ideal, he said, because they incur fees and compounded interest charges. As well, a landlord who’s renting a basement suite in their home may have secured the mortgage because of that additional revenue stream. If that landlord loses their job, as well as that revenue stream, they could be in a tough spot with the bank.
“No bank is going to consider a mortgage deferral under those circumstances, and many of these folks are at risk of losing their home, especially if this situation persists for multiple months.
“The harsh reality is that the entire rental housing ecosystem and really the entire housing system is at serious risk right now. That’s why we need all levels of government to work with both landlords and renters to find solutions.”
Because of the pandemic, there is a temporary ban on evicting a person who can’t cover their rent. However, once the state of emergency is over, the tenant who has not paid rent could face eviction.
David Hendry, a physiotherapist and steering committee member for the Vancouver Tenants Union (VTU), said that threat of future eviction, post-lockdown, is his group’s No. 1 concern right now. The other concern is that tenants will go further into debt if landlords only agree to defer their rent payments instead of allowing rent abatement.
He said the VTU is advising tenants to lobby for political change, and to negotiate with landlords for reduced rents. They’d also like to see the smaller landlords support them.
“We’ve been asking people to punch up, and not punch down, and to lobby their MPs.”
If negotiations go nowhere, they will consider a rent strike. Tenants’ rights groups in Toronto, New York and Seattle have been advocating for citywide strikes against payment of rent, Mr. Hendry said.
He said that so far, corporate-owned buildings in particular are not willing to negotiate with tenants who request reduced rent. He would like to see government put pressure on banks to cancel mortgage payments during the crisis, to help the independent landlords.
“In the middle of the world crisis, landlords and the banks are expecting business as usual. They are expecting full payment. And we don’t think that people who are the bottom should be paying for the profits of the banks and the landlords, especially the corporate landlords.
“If we look at it in terms of what tools do renters have, I see it as very similar to a strike for workers withdrawing their labour.”
But Mr. Hendry said to win a rent strike would take support and organization.
“We have 50 people that have contacted us who want to organize in their buildings, and that represents about 1,000 units so far in Vancouver. And we are trying to train people online to learn how to organize their buildings.”
Mr. Hendry says that many people won’t be initially agreeable, but that could change as the months go by.
“They may come to the realization that bolder actions are needed. For us, we are not taking [rent strike] off the table. But also everybody needs to know what the legal implication is – which is the possibility of being evicted. We are trying to organize so that tenants have more power.”
If they just get to the point of negotiating a fair deal with their landlords, that’s also good, he added.
Donald Mackenzie, president of Bodewell property management, oversees rental properties throughout the Lower Mainland. All his tenants made April rent, and he says only 15 per cent have indicated that May rent may be a problem.
Mr. Mackenzie has been taking a pro-active approach since the crisis started. He’s sent out e-mails to his tenants outlining all government relief options available to them. People are confused by the details of the programs, he said.
“If they can, they’re paying their rent, and if they need help, they are telling us,” Mr. Mackenzie said.
But he expects that the situation will change as it affects people in various job sectors.
“The first people to feel the pain are the front-line servers and that kind of industry. The pain further down the supply chain is going to come later, the longer this goes on. It’s a good plan to be pro-active and help tenants who may need help.”
Andrew Lynch is an 81-year-old former chemist who worked at an environmental research lab at the University of British Columbia. He purchased two big houses near Cambie Street many years ago, as part of his retirement plan. He has 12 rental units, and he rents below market rate to attract good, long-term tenants, which has worked well for him. However, he already had one vacant unit when the lockdown started, and another unit is coming vacant. He’s not sure how to show a unit safely amid the pandemic.
His tenants all paid their rent for April, but one tenant has asked to defer rent for May.
Mr. Lynch was already stressed because of the 80-per-cent increase in insurance premiums on his house at 2632 Alberta St. And now, with two suites empty, Mr. Lynch said he’s not sure he can make his tax payment in July.
“We have excellent tenants. They are good people. But I am concerned about May and June. I don’t understand why all levels of government don’t work together with the industry, to provide relief to residents suffering from the implications of COVID-19.”
Mayor Kennedy Stewart told a news conference last week that the homeowners who don’t think they’ll pay their July property tax bill are keeping him up at night. He said he worries that there will be a massive shortfall, and he’s calling for provincial and federal help.
A random survey of 278 homeowners said that 65 per cent planned to pay their July entire property tax bill, while 30 per cent said they’d pay most of it.
Mario Canseco of Research Co. was hired by the mayor’s office to turn the poll around over the Easter weekend, using e-mail for the survey questions. The results are based on the 278 homeowners, as well as 301 renters and 421 employed residents.
Just over half of homeowners said they expect to pay their May mortgage payment. Three in five renters expect to pay their rent.
“It was essentially an exercise to check the situation,” Mr. Canseco said.
The low numbers shocked everyone, he says.
“The announcements had been made on all the ways in which people were going to be helped [with funding] – and we still found people who said, ‘I’m not going to make it.’
“I think that was a major red flag for the city.”
Mr. Canseco said he’d asked the same questions during the financial meltdown of 2008, and respondents weren’t nearly as concerned as they are this time around.
“I think it shows you the extent of the situation,” he says. “It makes sense. People are worried. You don’t know if your job is going to come back, or what type of job you’re going to come back to.”
The situation, he added is fluid. It could go either way a month or two from now.
“But there is a definitely a fear.”
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