The BC Government today released Dan Perrin’s Real Estate Regulatory Structure Review, which was commissioned in April of this year to:

The BC Government today announced that it was accepting the recommendations of the BC Rental Housing Task Force.

Below is the media release my colleague Adam Olsen and I issued in response to the government’s announcement.

Media Release

Weaver welcomes rental formula change
For immediate release
September 26, 2018

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, and Adam Olsen, Rental Housing Task Force (RHTF) member, welcomed the government’s announcement that it has accepted the RHTF’s recommendation to change the allowable rental increase formula from the inflation plus a guaranteed 2% to inflation only (2.5% for 2019). The RHTF made the recommendation on Monday, and Weaver urged government to accept their recommendation.

“I am delighted that B.C. renters will have some relief in 2019,” said Weaver.

“When we work together to advance evidence-based solutions there is much we can accomplish. This is a sensible change that will make life more affordable without putting a dent in the provincial budget. We were also pleased to support increased funding in the budget for targeted programs like SAFER and RAP and to build affordable housing, as well as changes to the Residential Tenancy Act. We are in continuous, active discussions with government to explore further policies that we both agree will increase affordability.”

Olsen also welcomed the government’s announcement.

“It is truly rewarding to see the efforts of our collaboration become government policy,” said Olsen.

“The lack of affordable rentals has wide-ranging impact in every corner of society, from seniors on fixed income, to young people and students, to small businesses struggling to find employees. I believe this policy strikes the right balance of encouraging affordable rents while giving landlords the ability to apply for justified higher increases. I look forward to releasing the rest of our recommendations soon so that we can continue to deliver on our shared promise to address the affordability crisis.”

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Today the BC Rental Housing Task Force released an interim recommendation concerning the formula used to calculate maximum allowable rent increases in BC. In particular, the task force recommended:

• changing the maximum rent increase formula, from the current formula of inflation plus 2%, to inflation only (2.5% for 2019), which would remove the automatic 2% yearly increase.
• giving landlords the ability to apply for an additional increase if they can show the formula would not cover maintenance and other costs incurred.

As I noted earlier, BC was to allow a maximum rent increase starting January 1, 2019 of 4.5%. This would have been the largest allowable increase since 2004 and follows on the heels of a 4% increase in 2018. In fact, during the four years under the BC Liberals, the compounded maximum allowable rental increase was 11.8%. In just two years, the BC NDP would have allowed an 8.7% compounded increase.

As pointed out by my colleague Adam Olsen:

“Providing relief for British Columbians struggling amidst the affordability crisis is a key shared commitment between our two caucuses. This task force exemplifies how minority governments lead to sensible policies that will make a real difference in peoples’ lives“

Below I reproduce the statement my office released in support of the task force recommendation. We look forward to government adopting this recommendation and to the task force releasing their full report later this fall.

Media Release

Weaver responds to Rental Task Force Recommendation
For immediate release
September 24, 2018

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green party, responded to the Rental Housing Task Force recommendation that the provincial government amend the annual allowable rent increase formula, to restrict increases to the rate of inflation:

“I want to commend the Task Force for their work on an issue of critical importance to British Columbians, and I urge the provincial government to adopt the recommendation. Today’s announcement is a strong step in addressing both current and ongoing rental affordability.

“The rental task force represents the best of minority government. We have two different parties that have come together on an issue of shared interest and have developed solutions for government to consider. This is exactly the type of collaboration that we need more of in our political system.

“I look forward to reviewing the other recommendations this committee brings forward and working with the government to ensure good policy is implemented that will improve fairness for both landlords and renters in our province.”

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Many constituents and other residents of British Columbia have contacted me about the September 7 announcement that this year, BC would allow a maximum rent increase starting January 1, 2019 of 4.5%. This is the largest allowable increase since 2004 and follows on the heels of a 4% increase in 2018. In fact, during the four years under the BC Liberals, the compounded maximum allowable rental increase was 11.8%. In just two years, the BC NDP have allowed an 8.7% compounded increase.

As renters struggle amidst the affordability crisis, this has raised renewed calls regarding why our caucus does not support giving all renters, regardless of their income, a $400 annual rebate. In this piece I provide more insight.

1. Where we are today

British Columbia already has two very successful rental subsidy programs targeting low-income residents:

1. Shelter aid for elderly renters (SAFER) which “helps make rents affordable for BC seniors with low to moderate incomes. “
2. Rental assistance program which “provides eligible low-income, working families with cash assistance to help with their monthly rent payments.”

The BC Greens argued that these critical programs needed to be better funded and were pleased that we were listened to when Budget 2018 was announced and increased funding was delivered. Nevertheless, these programs still require additional support.

The NDP’s campaign promise of a $400 renter’s rebate would cost $200 million and would flow through renters into the pockets of landlords. It is our position that there are cheaper, more effective ways to support renters while also enabling government to put that $200 million into other affordable housing initiatives that won’t simply be absorbed by the market.

Affordability was the number one issue we heard from voters and alleviating some of the pressure British Columbians are feeling is a key shared commitment of our Confidence and Supply Agreement with the BC NDP. We have already implemented a number of policies that we both agree on, and in this case we simply have a disagreement about the effectiveness of giving a blanket rebate to all renters. Our Caucuses continue to work closely every day to develop policies to address the affordability crisis that we can both support.

In our view, the most obvious is the formula that is used to calculate the maximum allowable rental increase: 2% plus the rate of inflation.

So while BC will allow a 4.5% rent increase in 2019, Ontario (which has faced its own housing crisis in Toronto) has only allowed 1.8%. This is the same as what is allowed in Quebéc for 2019. Manitoba permitted a 1.3% increase in 2018, compared to BC’s 4.0% (the 2019 rate for Manitoba was not available at the time of writing, but based on the way it is calculated, it’s pretty obvious it will be well below BC’s).

My colleague Adam Olsen is working hard on the Rental Housing Task Force with NDP MLAs Spencer Chandra-Herbert and Ronna-Rae Leonard. They have completed their province-wide consultations and are preparing their recommendations. Their report will include a review of the allowable rental increase. I have expressed to government that the report should be released as soon as possible so we can implement a comprehensive suite of measures to support renters, ideally before the 90 days’ notice required for a January 1 rent increase kicks in.

This Task Force is an example of the unique benefits of a minority government: MLAs from different parties and perspectives are listening to British Columbians and bring forth collaborative, evidence-based recommendations. I believe this will lead to better policies that get the most out of our provincial budget and I am looking very forward to their report.

2. Delving into the numbers

Let me give a specific example as to why we have been pushing government to take a good hard look at this formula.

Let’s suppose that in December 2017 you were paying 1,500$ a month rent and that you had been given notice that your rent was going up the maximum allowable amount in January 2018. The same thing happens in December 2018.

Well we know that the maximum allowable amount is 2% plus the rate of inflation: in 2018 that was 4% and in 2019 it is (as of today) 4.5%.

So in 2018 your rent would be $1,560 per month. In 2019 your rent would be $1,630 per month.

In 2018 you would pay in total $720 more than you did in 2017. In 2019 you would pay in total $840 more than you did 2018. In just two years, you are now paying $1,560 more a year for rent.

Let’s be quite clear: 100% of the rent increase goes to the landlord (a portion of which flows through to their increasing expenses).

Let’s suppose the government gave every renter $400 a year whether they need it or not. In the example above, you would now only be paying $320 more in 2018 than you did in 2017 and $440 more in 2019 than in 2018. Your net increase would only be $760 over two years. Obviously at first glance, this might look good.

The BC NDP promise to give renters $400 a year would cost the taxpayer $200 million per year and that money would essentially flow through renters to landlords. In essence, it is a landlord subsidy.

What the BC Greens have been pushing for is taking a hard look at the allowable rental increase formula. What if, for example, rate increases were only allowed to be 2% in each year (still above the Ontario, Quebec and Manitoba rates).

We can redo everything above.

Your rent would be $1,530 a month in 2018 and $1,561 a month in 2019. You would pay $360 more a year in 2018 compared to 2017 and $372 more in 2019 compared to 2018. That makes a $732 increase over the two years (compared to $760 under the NDP handout plan).

What’s more, this change costs the taxpayer nothing.

3. The way forward

The example above shows that compounding interest adds up quickly and that a renter is better off when government address annual allowable rent increases instead of handing out $400 cheques to every renter.

What’s more, $200 million has been saved. And that money could, and should, go into building affordable housing.

Finally, as I outlined above, there are other tools available to government. One I believe we need to give serious attention to is the fact that in BC, stratas are allowed to prohibit all or some fraction of their units from being rented out. This is not the case in Ontario, for example. There would certainly be substantive downward pressure on rental markets (and increased value in some cases for strata units) were this restriction to be lifted. But in doing so, one would have to be careful to ensure that Strata is given a copy of the lease and granted the power of eviction, that short term (vacation rental) restrictions would still be allowed,  and the unit owner retained liability for the tenant. Adam tells me there are additional measures that the task force is working on, and I am looking forward to seeing those recommendations. I’d be interested in reading any feedback readers wish to provide me on this topic.

Over the last week, I have been following the news that Ontario has decided to cancel its basic income pilot, only one year into what was supposed to be a 3-year project.

I am saddened by the decision made by the government of Ontario, for a number of reasons.

I was, of course, looking forward to learning from Ontario’s pilot project, which would have provided a wealth of evidence about the effects of basic income. Ontario was leading the country in assessing the impacts of this policy, and their project was being watched around the world. They were tracking changes in employment, health, education, food security and housing, as well as community-level effects in Lindsay, with independent assessment by university researchers.

Before Ontario, the last pilot in Canada took place in Dauphin, Manitoba, over 40 years ago. This pilot illustrated some very promising results: in just 3 years, hospital visits were reduced by 8.5%.
Researchers attributed this marked decrease to lower levels of stress in low income families, which resulted in lower rates of alcohol and drug use, lower levels of domestic abuse, fewer car accidents, and lower levels of hospitalization for mental health issues.

In deciding to cancel the pilot, Ontario, and our whole country, has lost a significant opportunity to learn about the effects of basic income and to be on the leading edge of exploring this policy.

But what has struck me the most in the last week since the news of cancellation are the individual stories coming out of Ontario, from those enrolled in the pilot, whose lives are deeply affected by this decision.

So many stories have highlighted how people’s lives changed once they began receiving basic income. These stories have highlighted, too, the substantial human cost to cancelling this pilot part way through, when thousands of people had made plans and decisions on what they thought was stable ground.

Some participants in the pilot decided to attend college for the first time, or returned to school, to pick up the skills needed for meaningful employment or to start a new career. Others began living independently, or found secure accommodation for the first time. For some, it was the newfound ability to afford healthy food and other small things to improve the quality of their lives, and the lives of their children. Others used the income to pay down long-standing debts.

Many spoke about the reduced stress they felt, the ability to plan into the future instead of worrying only about the day-to-day, and a feeling of greater independence and dignity.

Many participants in the program were working, but still couldn’t afford the necessities of life and make ends meet.

One individual who was part of the pilot wrote to me highlighting the impact that basic income had on him and his family. Despite both working, he and his wife had amassed a significant amount of debt, which they struggled to pay off as they tried to provide for their children. The program, he said, was allowing them to pay down their debt and do more with their children. Most importantly, he said, he could finally see the light at the end of the tunnel to better days, for him and his children.

In his words, “this program … gave people that really needed hope a lot of hope for a brighter future.”

These individual stories speak to the promise I believe basic income holds – as a better way to support people as they navigate the economic challenges of the 21st century. Recent years have seen disproportionate increases in part-time and contract work. Wages have stagnated while the cost of living in our cities has spiralled out of control. Meanwhile, studies estimate that half of Canadian jobs could be impacted by automation in the next decade alone. We proposed exploring basic income in B.C. because we believe that government needs to have a plan for the changes on the horizon.

The experiences of people in Ontario has made me see even more strongly the need to do serious work exploring this policy. I have previously written a four part series (Part I, Part II, Part III, and Part IV) outlining why I think basic income is an idea that we need to explore in BC. Establishing a pilot project formed a key aspect of the Income Security component of our BC Green 2017 election platform.

We’re forging ahead in BC with our expert committee, an expert panel comprising three distinguished researcher that launched last month and is studying how basic income could work in BC. This committee is the first step towards fulfilling a government commitment under CASA to pilot basic income in BC.  I am hopeful that the committee’s work will provide the evidence that governments need to decide how to proceed – not only here in BC, but across Canada.

In this time of change, as we grapple with the challenges we face today and on the horizon, policymakers have a responsibility to plan for the future, and to make decisions that will give their citizens the best possible chance to pursue their dreams and to achieve success. In a country as wealthy and as compassionate as ours, that’s the goal our leaders should be working towards.