I don’t think anyone is at this point, but just in case you’re wondering ‘Why?’ Well there is this teeny weeny (but also gigantic) problem of housing supply in BC. This problem extends all the way through the country on a national level not just for rentals, but in order to combat this in BC, the above approach has been taken to add to the supply that is lacking.
It’s important to note this is ALL buildings in BC, so this will help renters only and not resale (buyers purchasing property). As it’s province wide, it’s not like owners can sell in order to move themselves into buildings that do not allow rentals.
The decision to ban th rentals and not allow age restrictions is kind of being hit from two fronts:
- We desperately need the supply
- Is the government mandating, or strong-arming, the situation the answer?
Regarding point number 1, yes great, jump for joy. It adds to supply and we need it. On that, 99% seem to agree. It’s the ‘How’ also known as point 2 that is up for debate. The debate has certainly been amplified by Canada’s recent “government overstep'' situations - Freedom Convoy, Vaccine mandates, Lockdowns and so on. Regardless of what side you are on, it’s part of the culture narrative right now, so it draws attention.
These changes won’t actually affect the masses in the way people are saying it will. The majority of buildings allow rentals of some kind already, whether that's 6 month contacts or more, a certain % allowed to be rented, or No AirBnB/VRBO etc. As for the Air BnB model, Strata can still have these banned and not allow them. So if affected, most buildings will just now have more rentals allowed in a building, with minimum contracts being 30 days or more. Importantly too, it does not mean every unit that could not rent will now be rented. That statement is a dual one, it’s part of the answer, as well as the problem. A lot of people purchase in non rent buildings because they don’t have any desire to rent.It’s not like everyone is lining up at the ‘want to rent door’ and can finally get through. On the other hand, because they will all not be rented now, it won’t increase supply to a higher degree.
It will however hopefully free up some of the estimated 3,000 empty homes in the city for rental. If the home sits empty, but your building does not allow rentals, or previously reached its maximum allocation, you would be entitled to a waiver of the empty homes tax.
The buildings that will be hit most by this are the smaller buildings, under 50 units. There are around 22,000 of them across the province. Here in Vancouver you would have seen a lot of them in Mount Pleasant, Kitsilano etc. Naturally the Stratas of these buildings will have to take on more if the building does not allow rentals currently. Strata is NEVER happy to take on more work. Yet, bylaws in buildings change all the time and allocations of time are changed regularly, so I believe this will be a sour note for a short period of time, then they will move on.
One point that I think is blown way out of proportion is the targeting of Short Term Rentals instead. A further pushback on these rental changes are why short term rentals have not been targeted more to free up supply. Well one, the government believes these rental changes will add 300,000 to the rental supply. Two, there are currently 50,000 AirBnB’s (legally) in the province. Clearly a lot more supply is available through the rental measures. That’s before you even consider those AirBnB users who would not even rent out their space should the rules change.
For me, the key difference here is what the government is doing. Are they taking away or are they adding? Whether this is rental restrictions, short term rentals, lockdowns etc it’s the same thought process, at least for me. If you attack short term rentals, you are taking away someone's right to earn money via smart investing. This has repercussions to those who own property already too. By restricting rentals, you’re not taking anything away from people. Even if you’re unhappy about the changes, your use of your own home does not change. You can still come and go, live as you please and so on. Life goes on with really, very little, if at all, change to your day to day. When I say ‘taking away’, I also mean that as a dollar value. These additional changes do not cost you more dollars. In fact it will probably have the opposite effect.
Further to my point above, I do believe with all of these lockdowns, emergency acts, mandates etc. The line government ‘cannot cross’ per se, has been pushed way further out. Not something I agree with at all, quite the opposite. This blog is purely focusing on the rental restrictions though.
As for homeowners in these buildings. I can certainly see the value of your property going up. Rental restrictions are a very common item on the criteria list of buyers, and age restricted buildings could not even be looked at, so allowing for this flexibility will definitely see more appeal for a building. Usually people will outright not look at buildings which don’t allow, or have minimal allowances towards rentals/age restrictions. They are not a ‘maybe’ situation. It’s typically either a yes or no.
Finally, we’ll wrap up here with the Strata Insurance question. Will Strata Insurance go up? Well, have rental restrictions STOPPED Strata insurances going up in the past? No. Renters are also human beings here too. They don’t enjoy flooding (the main issue with increased premiums/deductibles) any more than the average homeowner. So renters try to avoid this just as much as regular homeowners do.
Have any thoughts on the changes to rentals and age restrictions? Let us know in the comments! As always, thank you so much for being here and taking the time to read along, we appreciate it!