Roxanne lives on the east side of Vancouver in an older three-storey walk up, and for the last several weeks she has used her oven to keep her apartment warm.
The Globe and Mail agreed not to use Roxanne’s last name because she fears retribution from her landlord, who purchased the building in recent years. She has been in the building for 16 years and her grandfathered rent is about half of what the newer tenants are paying. Each year the landlord raises the rent according to the maximum allowed.
She does her best not to attract the landlord’s attention for fear that they will renovate her unit and jack up her rent. She says she was without heat in October for three days and in early December for five days. Now, she has some heat in her bedroom, but not in the rest of her apartment.
“I’m 66 and shouldn’t have to tolerate all this nonsense,” she says.
Jim Dunn, the Senator William McMaster Chair in Urban Health Equity, believes that Canadian landlords need more regulation in order to shine a light on the true nature of rental housing. Prof. Dunn is the director of the Canadian Housing Evidence Collaborative (CHEC), which receives federal funding as part of a network of housing researchers, policy makers and other experts who are studying secure, affordable housing across Canada.
He says that we regulate daycares run out of people’s homes, and we regulate the restaurant industry. It follows that we should also regulate landlords, particularly since Canadians are overwhelmingly reliant on the private sector for rental housing. The general estimate is that only 6 per cent of Canadian households rely on non-market housing, while the remainder rely on the private market.
A slowly emerging idea is to require landlords to be licensed, or at least registered on a publicly accessible registry. In Ontario, London introduced rental licensing to enforce property standards, and Hamilton has a pilot program under way that looks at property standards and safety, Prof. Dunn says.
As well as ensuring safety standards for tenants, licensing of landlords would collect valuable data on a sector that is largely operating in the dark.
“Many municipalities across the country have batted around the idea of a rental licence, where basically if you are a landlord with over a certain number of units … you’d have to register the property and probably pay a small licensing fee. Most places have thought about this as a way to better enforce property standards.
“The thing I have been quite interested in is, if municipalities want to do rental licensing, I’m really interested in the data on what are characteristics of the unit, what is the rent charged, and utilities that are included and other amenities. Because we don’t know. We are in an unaffordability crisis, and we are flying blind.”
The millennial and Gen Z dream of home ownership is being exploited in ways that just make houses more expensive
The hard limits to ‘affordable’ rentals
Prof. Dunn suggests that the Canada Revenue Agency could collect additional data on rental units, since they’re already collecting rental income and expenses, he says. That would shine a light on whether the unit is in fact a rental unit, or should be flagged.
“We get some insight on where rental housing is being used for money laundering and financial crimes, which is an important issue generally in housing. We hear a lot about financial crimes in housing, but we don’t see a lot of action on it, other than talk about empty homes taxes. This isn’t that burdensome, and secondly, it would shine a very bright light on housing affordability across the country really fast, where there is currently darkness.”
Renters who live in a hot property market, with rising house prices, are particularly vulnerable. Metro Vancouver is the eviction capital of Canada, as shown in a University of British Columbia study released earlier this year. The region saw a rate of 10.5 per cent of renter households who’d experienced an eviction as the reason for their last move. (Toronto is at 5.8 per cent). Provincewide, British Columbia has a rate of 10.6 per cent.
Even the Halifax housing market, which has historically been seen as affordable, is seeing rents rise, along with landlord-tenant disputes. Mark Culligan, community legal worker for the Dalhousie Legal Aid Service, says calls concerning residential tenancy issues have nearly tripled in the past eight years. He’s seeing many tenants who live in substandard conditions.
Halifax has one of the lowest vacancy rates in the country. The city is proposing a landlord registry for more transparency, but Mr. Culligan is more in favour of licensing that would involve proactive inspections. But he says such regulation should only be in tandem with permanent rent controls that would protect tenants from shouldering the cost of necessary updates. He says landlords will argue that regulation adds to cost and will stifle new rental development, and cause landlords to sell, which he calls a “capital strike.”
“In some ways, that’s one of the answers to the landlord’s position that any kind of regulation will lead to a capital strike. The ultimate answer to that is that there needs to be public investment in affordable housing,” Mr. Culligan said. “The longer we allow the private sector to completely dominate investment and management of housing, the more we entrench the idea that new housing is being built for profit rather than for need.”
Scotland has just taken the drastic step of proposing a host of regulations over landlords that would make it a leader in rental regulation.
The country already had some rental regulation, but recently lawmakers proposed a sweeping new set of rules to ensure real estate speculation doesn’t encroach on citizens’ housing rights.
Ken Gibb, the director and principal investigator of the UK Collaborative Centre for Housing Evidence, says the program has been through three years of consultation. He is professor of housing economics in urban studies at the University of Glasgow, and his research focuses on the economics of affordable housing.
“This is a huge program, very ambitious and centred on some quite radical policy vision statements,” he said in an e-mail interview.
Those ambitious goals include affordable housing supply programs, elevating living standards, retrofitting housing units to net zero by 2045, wiping out homelessness and speculation, and stabilizing house prices.
Unlike Canada, Scotland has a strong history of subsidized housing. About 15 per cent of Scotland’s population relies on privately owned rental units, a number that has tripled since 1999.
Reregulation of privately owned rentals, Prof. Gibb says, was part of a “slowly articulated desire to rebalance the power relations between landlords and tenant.”
David Hutniak, chief executive officer for LandlordBC, opposes the idea of rental licensing because the sector is already stringently regulated at several levels, he says.
A key aspect of B.C.’s rental market is that the vast majority of supply is from secondary sources (condos, basement suites), as opposed to purpose-built apartment buildings. About 70 per cent of rental units are from the secondary market. Mr. Hutniak’s organization offers a free online landlord education program that saw 3,100 enrolled by the end of December, but he’d like to see greater uptake.
“The engagement of these landlords is a key part of our mandate, but engagement has been and continues to be a struggle,” Mr. Hutniak says.
Part of the problem is the price of housing, which is pushing homeowners into the landlord business.
“The secondary market will disproportionately continue to provide the majority of rental for decades to come because more and more people will need their basement suite to secure their own housing.”
As well, policy makers have not created an environment that is conducive to building more purpose-built rental, he says.
Zack Ross is president of family-run development and property management company Cape Group, which his grandfather started more than 60 years ago. The company owns a handful of rental apartment buildings and has two new rental buildings under way, just east of Main Street in Vancouver. Mr. Ross says they try to be the type of landlord that treats tenants more like family than consumers.
He said that, when he hears stories about a woman using her oven to heat her apartment, it makes him feel sick.
“We are dealing with buildings built in the seventies and if you don’t maintain them, it will cost you more anyway. Some people might say, ‘That’s stupid, rents are going up, you want turnover.’ We don’t need to do that. We are happy with our long-term tenants.”
As a large landlord, he’s already dealing with more regulation than a mom and pop landlord. But he’s not opposed to the idea of something such as a landlord register, as long as it doesn’t turn into an administrative hassle.
“For us, we wouldn’t mind doing it, and I think it would protect the renters a little bit more, or help them know who they are getting into business with. When you go to a restaurant, you can look up Google reviews and see if it’s good. Why not do that with your landlord?”
Your house is your most valuable asset. We have a weekly Real Estate newsletter to help you stay on top of news on the housing market, mortgages, the latest closings and more. Sign up today.