Government regulation, interference harms housing supply
Subject: Rental housing crisis
We are in a rental housing crisis. Government manipulation and continued interference in the industry have had adverse effects. British Columbia had fair and balanced legislation and was one of Canada’s leaders in rental legislation. This is no longer the case. Owners no longer control their property, the government does.
Speculation tax and vacancy tax, “No one wants to see multi-generational family cottages subject to the tax”, a quote in a recent report. It’s wishful thinking because that’s exactly what it does. This tax forces the owners of a chalet or a second property to pay higher and higher taxes unless they can prove that they are renting it out. They are forced to sell or become owners. If short-term rentals and foreign ownership are an issue, deal with them another way.
“Regulating rent increases between tenancies,” another recent headline. Although sounding good, this proposal would be another nail in the coffin of the private rental market. If you want to maintain your property, you must ask the government for an arbitration hearing to justify any increase in the cost of providing the rental. Tenant turnover is when you can make much-needed repairs and upgrades to get a lasting product and a return on your investment.
The NDP’s regulatory changes to tenancy law were well-intentioned and designed to help and protect the tenant. Unfortunately, these changes have the opposite effect by interfering with a free market and decreasing supply. Property taxes, insurance, financing and repair costs have skyrocketed. Rent increases are regulated below actual cost increases. The old housing stock needs investment to remain viable. If the only profit is in the sale, then that is what will happen. Owners who can sell. The economy is a matter of supply and demand. Housing is experiencing unprecedented demand. The government is hurting the supply. Government regulatory manipulation is not the solution, a favorable investment environment is.