Housing affordability is high on the lists of priority items for all the federal political parties, this election. The solutions are all over the place.

From some sort of tax credits for renters. To an idea that renters can rent-to-purchase—hard to see how that would work if the landlord did not want to sell. A ban on foreign ownership of housing, or just a really high tax on those non-Canadians who do own residences. Even a surtax on owners who do not live in the residence, whether they are citizens or not. And whether or not the owner is actually doing the right thing and leasing to a tenant.

All of these so-called solutions would need a lot of new laws behind. And you know how long it can sometimes take to make legislative changes. And how often are they not effective, anyway?

So, why not just review the history of the housing crisis. Prior to the implementation of the Residential Tenancy Act in BC, there was no talk of ‘housing crisis’. Land owners could—and did—develop high density zoned land for residential rental units.

I am sure there were nightmare landlords, who terminated leases on a whim. As there were scary renters, who damaged the properties. But, in general, it all worked.

Landlords want their units to be rented. Renters generally want to stay in their premises provided their family does not outgrow the space, they have to move away for work, or they decide to purchase a home. And if the lessee has been a good tenant, and suggests the name of a friend to take up the lease, most landlords would be happy to oblige. Full rental units translates into profit for the lessors. And housing for all.

The Residential Tenancy Act changed the natural marketplace for housing. It arbitrarily limited rent increases without reference to the landlords’ increased costs. I.e. property taxes could increase by any per centage, mortgage interest rates could keep climbing, and still, rental rates were limited.
So, companies quit constructing apartment buildings. If you had the land, you might as well build condos. Same price to build, and the fee simple sale of the units generates income faster than the old monthly rental income. Of course, cities could zone property for rental units only, but, why do that? More tax revenue is derived from condominium units, than from an apartment building.

And a lot of owners of second properties stopped renting. At some point, keeping the property vacant seemed better than undergoing the hassle of dealing with a recalcitrant, and perhaps, vindictive renter. Arguing with a renter before the Residential Tenancy Board is not a popular pastime.
Always the landlord is the low-hanging fruit, the one who gets picked on. The Covid-19 crisis is a good example. Rent increases in BC are still banned, due to the Covid-19 situation. But costs have not stopped increasing. Even worse, a good number of tenants determined that they did not have to pay any rent at all, because landlords were forbidden to evict during the past eighteen months. Although those renters were, for the most part, having their incomes augmented by the CERB payments and other benefits, they did not opt to pass on some of that largesse to their home-owners, i.e. landlords.

Yes, the cost of home realty has escalated violently? But what is a government going to do? Imposing a capital gains tax on an old couple selling their home, prior to moving into retirement facilities, is not a viable option. Many elderly people have invested in their home for decades, knowing that it would eventually mean a comfortable old age. Certainly, CPP and Old Age Pension do not guarantee that. And anyway, how would such a tax help with the housing crisis?

The only rental properties being built are funded by service clubs, charitable societies, and some government agencies.

No entrepreneur is building apartments. Because there is no profit in it. Put back a fair profit, by assisting—not picking on—landlords.

by Jessica Murphy