NDP seeks assurance HST won’t trigger rent increases

Housing Minister defends tax, says there is no loophole landlords could exploit

Justine Hunter -Victoria — From Tuesday’s Globe and Mail Published on Monday, Apr. 19, 2010 3:12PM EDT

Protesters demonstrate against the HST on the Victoria legislature’s front lawn last august, before the Throne Speech announcing the harmonized tax.

The B.C. government needs to follow Ontario’s lead and offer explicit protection so B.C. home renters won’t face higher rates once the harmonized sales tax comes into play this summer, New Democratic Party finance critic Bruce Ralston says.

But the province’s Housing Minister insisted there is no need to make any changes. Rich Coleman said Monday the regulations that would allow a landlord to exceed the current cap on rent increases cannot be exploited due to increased taxes.

“I would say under our present rules they would be unsuccessful, quite frankly it’s not an extraordinary expense,” Mr. Coleman said in an interview.

“There is no loophole to close in B.C.”

Last week, Ontario Premier Dalton McGuinty announced his government will close a loophole in rent regulations that would have allowed landlords to apply for rent increases above existing guidelines.

In B.C., landlords are allowed to increase rents each year by the rate of inflation plus two per cent. But under the Residential Tenancy Act, landlords can apply to go above the cap if they claim “an extraordinary increase in the operating expenses of the residential property.”

Finance Minister Colin Hansen said the increased costs to landlords ought to be accommodated within the current cap.

“The very slight increases that landlords will face because of HST can be easily accommodated within the framework that is there today,” he said.

But Mr. Ralston said he expects many of the half-million households that are rentals in B.C. could be subjected to higher rates after July 1.

Rents are not subject to the HST, but landlords are likely to seek ways to pass on costs of increased maintenance, garbage collection, security and other services, he said.

“Unless landlords are specifically prohibited from applying to pass on those costs, there will be an impact on renters,” Mr. Ralston said.

On Monday, Mr. Hansen defended plans for a government mail-out to all B.C. households promoting the HST, saying he needs to counter the misinformation being spread by critics about the tax.

“We will make sure that accurate information gets out around British Columbia to actually counter a lot of the blatant misinformation that is being spread by the New Democratic Party and their members,” he said.

Organizers of the petition to repeal the HST vowed Monday to take any government campaign to the police with a complaint under the law governing the initiative process.

“It is clear from the statements by the Minister of Finance that the intention of the government’s planned mail out is to counter statements and information by the anti-HST Initiative proponent,” campaign organizer Chris Delaney said in a letter Monday to Elections BC.

In the letter, he puts the government and Elections BC on notice that he intends to file an official complaint with the RCMP, whenever the government pamphlet lands on doorsteps.

Because the B.C. government has argued the HST deal it inked last summer with Ottawa is binding, the only purpose of a taxpayer-funded ad campaign now would be to attempt to harm the petition drive, he said.

Mr. Hansen told reporters Monday the household mailer will be similar to those delivered after budgets in the past. However, although it has been seven weeks since he tabled his last B.C. budget, he said it is still not ready to be sent out.

It is not clear that the government would be violating the law by advertising on the HST right now, but any kind of campaign will be scrutinized by Elections BC.

Because no organization has registered as an opponent of the petition, any group or individual wishing to oppose the petition “directly or indirectly” will be limited to spending $5,000 in advertising.

Nola Western of Elections BC noted that not all advertising that promotes the HST is deemed to be related to the petition. Government advertising promoting the budget, including the HST impacts on that budget, would likely avoid the restrictions.

Under the initiative process, canvassers have until July 5 to sign up 10 per cent of registered voters in each of the province’s 85 ridings on a petition calling for the tax to be repealed.

Mr. Delaney said the campaign is already nearing its target in 12 ridings just two weeks into the three-month petition drive. Those numbers have not been verified by Elections BC.

TRAC- The Danger of Raising Allowable Rent Increases

FOR IMMEDIATE RELEASE

April 14, 2010-  The Danger of raising allowable rent increases

Vancouver— TRAC Tenant Resource & Advisory Centre is warning tenants throughout BC about the dangers of the apartment owners’ campaign to raise the allowable rate of rent increases.

First, the cumulative impact on tenants will add to the serious situation of BC having the most unaffordable rental housing in the country.

Secondly, the landlords do not need to have the Residential Tenancy Regulation changed because they already have an avenue to ask for above-guideline increases.

Thirdly, there is no indication that landlords are currently suffering financial losses or facing bankruptcy because of the existing Regulation.
Since 2004, the Regulation has allowed landlords to increase rents once a year at a rate of Cost of Living (i.e. Inflation) plus 2%. The average weekly wage in BC increased 16.6% between 2004 and 2009, and this was outpaced by the allowable rental rate increase which was 21.8%. If landlords could have increased rates by Cost of Living plus 3.5%, rents for sitting tenants would have increased almost 31%.

Since 2004, the Regulation has allowed landlords to increase rents once a year at a rate of Cost of Living (i.e. Inflation) plus 2%. The average weekly wage in BC increased 16.6% between 2004 and 2009, and this was outpaced by the allowable rental rate increase which was 21.8%. If landlords could have increased rates by Cost of Living plus 3.5%, rents for sitting tenants would have increased almost 31%.

Also, landlords can charge whatever the market will bear when they get a new tenant.

Landlords can already apply under section 23 of the Regulation to increase rents at a higher rate if they can prove financial loss due to increased operating costs, unforeseen repairs or other reasons. We searched the government website for decisions and found only two decisions in 2009-10. One landlord succeeded partially and the other lost because the Dispute Resolution Officer found that the repairs were not unforeseen.
We urge renters throughout BC to tell their MLAs that they must not support the landlords’ campaign.

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Earnings and Employment Trends: Provincial Comparison – Average Weekly Wage Rate. <http://www.bcstats.gov.bc.ca/pubs/eet/eetdata.pdf&gt;

Gordon Nelson Investments Drop Appeal Of Seafield Supreme Court decision overturning RTO’s 38% rent increases

FOR IMMEDIATE RELEASE

Gordon Nelson Abandon Appeal of Decision Denying them a 38% Rent Increase

Residents of the Seafield Apartments learned yesterday that landlords Gordon Nelson Investments dropped their appeal of Madam Justice Loo’s Supreme Court decision denying them a 38% rent increase.

This is a big win for all renters in Vancouver and BC at large as the decision, which now goes unchallenged, helps to clarify the law around geographic area rent increases.

The decision shows that landlords aren’t entitled to an additional rent increase simply because a couple of tenants pay higher rents in a similar unit; Dispute Resolution Officers must look at all the evidence about the whole market for similar units in the same area, not just the evidence dealing with a few higher rents.

Justice Loo also expressed doubt that the rent increase legislation is meant to let a landlord use the higher rents it is getting for newly rented units to bootstrap up the rent in other units in the same building.

While this is a major win for Seafield tenants too, the case is still supposed to be reheard at the Residential Tenancy Office (RTO), which adjudicates disputes between landlords and tenants under the Province’s Residential Tenancy Act. Residents have not been informed of any hearing date.

Background

Jason Gordon and Chris Nelson of Gordon Nelson Investments filed an application for a rent increase at the Seafield of up to 73% in January 2009.

The pair made their application under the additional rent increase section of the residential tenancy act.  This section allows landlords to receive a higher than normal annual rent increase if they can show that residents in their building pay significantly lower rents than those in similar buildings in the same geographical area. (The normal increase for 2009 was 3.7%.)

Despite the breadth and quality of the tenants’ evidence, Dispute Resolution Officer K. Miller of the RTO did not consider the tenants evidence and granted Gordon Nelson Investments a 38% rent increase in April 2009.

Seafield residents applied for a Judicial Review of the 38% rent increase in August 2009, and the Supreme Court of British Columbia set aside the RTO’s decision because it was found to be “patently unreasonable” in January 2010.

Residents at the 14-unit apartment building in Vancouver’s West End have been pressured by Gordon Nelson Investments since the former Bodog executives purchased the building in the summer of 2008.

All original tenants in the building are still living in their apartments, despite more than a year and a half of threats to their ongoing tenancies.