Unpopular opinion: annual maximum rent increase
Firstly, I completely commiserate with folks facing potential rental rate hikes of up to 4.5%. That's no small sum of cash, and unless you're in the CEO income bracket (which is almost none of you), you're going to feel this one.
So in light of this approved maximum rate hike, I've learned that the Residential Tenancy Branch made this approval based on a set of provincially established criteria.
Rental advocates are demanding that the NDP government act immediately to either suspend the increase or lower the increase. This is problematic because advocates here are demanding that there be political interference in an otherwise independent government agency.
I'm sure it could be done, but it runs opposite to those angry at the previous government for political interference with ICBC where insurance rate increases were held artificially low because elections. The result of that interference is the dumpster fire that the NDP is now charged with cleaning up. One of the ways out of that disaster was a 30% increase in insurance rates. The government opted for significant reforms (that were advised to the previous BC Liberal government, but ignored).
What happens when a rent freeze thaws out?
There are some schools of thought on the economics of a rent freeze, or severe rent controls. But lets also give some context to the present situation. Rent and affordability in BC's largest cities has thousands of people on the financial cusp, but it hasn't always been this way. Political decisions made by powerful people have a profound impact here; this current rental rate debacle isn't the only factor here.
For 16 years, we had a government that hated working people.
They started off with a training minimum wage, $2 less than the legal minimum, for folks new to the workforce (less than 500 total hours worked). Trouble there is that some young people were 'let go' from their part time jobs as 500 hours approached. This in fact happened in my family. Other employers felt that every time they hired a new person, it entitled them to 500 hours to pay $2 less per hour.
Then they moved on to unions. The government tore up freely negotiated collective agreements under a pretence of 'sweetheart deals'; an allegation that the prior NDP government made sweet deals with its public sector unions. The trouble is that many of the provisions in dispute that needed a shredder (according to Gordon Campbell and Christy Clark) were in place in various forms since the days of WAC Bennett.
They gutted the apprenticeship and training program in BC. So much so that when critical infrastructure was to be built, contractors started relying on imported 'temporary foreign workers' instead of training here in BC.
They deregulated the real estate market; handed off its policing duties to the industry. The result of this is the runaway real estate prices in large cities in BC and natural infection of the rental market. That sort of big money industry proved to be to tempting of a target for organised crime as well; with their duffel bags of cash laundering money in BC casinos.
In an economy where the gap between 1% and everyone else isn't so disgustingly large, a 4.5% jump in annual rents may be manageable by working folks. But in BC, a former government beholden to big industry, big realty, and other corporate insiders, that jump in rates might be the bridge too far.
But lets not mistake the potential rate increases as the problem; the problem was created (and still exists) by having a government for almost 16 that hated the working people they governed.
I'm not convinced that a rent freeze is the answer; unforeseen consequences may await that policy, and what of the rates when the thaw sets in?
I think the answer lays in better supports for those in destitute poverty, better wages and salaries for those who work for a living; this means more education, apprenticeships and opportunities. All the things the BC Liberals refused to do.
My 2 bits
So in light of this approved maximum rate hike, I've learned that the Residential Tenancy Branch made this approval based on a set of provincially established criteria.
Rental advocates are demanding that the NDP government act immediately to either suspend the increase or lower the increase. This is problematic because advocates here are demanding that there be political interference in an otherwise independent government agency.
I'm sure it could be done, but it runs opposite to those angry at the previous government for political interference with ICBC where insurance rate increases were held artificially low because elections. The result of that interference is the dumpster fire that the NDP is now charged with cleaning up. One of the ways out of that disaster was a 30% increase in insurance rates. The government opted for significant reforms (that were advised to the previous BC Liberal government, but ignored).
What happens when a rent freeze thaws out?
There are some schools of thought on the economics of a rent freeze, or severe rent controls. But lets also give some context to the present situation. Rent and affordability in BC's largest cities has thousands of people on the financial cusp, but it hasn't always been this way. Political decisions made by powerful people have a profound impact here; this current rental rate debacle isn't the only factor here.
For 16 years, we had a government that hated working people.
They started off with a training minimum wage, $2 less than the legal minimum, for folks new to the workforce (less than 500 total hours worked). Trouble there is that some young people were 'let go' from their part time jobs as 500 hours approached. This in fact happened in my family. Other employers felt that every time they hired a new person, it entitled them to 500 hours to pay $2 less per hour.
Then they moved on to unions. The government tore up freely negotiated collective agreements under a pretence of 'sweetheart deals'; an allegation that the prior NDP government made sweet deals with its public sector unions. The trouble is that many of the provisions in dispute that needed a shredder (according to Gordon Campbell and Christy Clark) were in place in various forms since the days of WAC Bennett.
They gutted the apprenticeship and training program in BC. So much so that when critical infrastructure was to be built, contractors started relying on imported 'temporary foreign workers' instead of training here in BC.
They deregulated the real estate market; handed off its policing duties to the industry. The result of this is the runaway real estate prices in large cities in BC and natural infection of the rental market. That sort of big money industry proved to be to tempting of a target for organised crime as well; with their duffel bags of cash laundering money in BC casinos.
In an economy where the gap between 1% and everyone else isn't so disgustingly large, a 4.5% jump in annual rents may be manageable by working folks. But in BC, a former government beholden to big industry, big realty, and other corporate insiders, that jump in rates might be the bridge too far.
But lets not mistake the potential rate increases as the problem; the problem was created (and still exists) by having a government for almost 16 that hated the working people they governed.
I'm not convinced that a rent freeze is the answer; unforeseen consequences may await that policy, and what of the rates when the thaw sets in?
I think the answer lays in better supports for those in destitute poverty, better wages and salaries for those who work for a living; this means more education, apprenticeships and opportunities. All the things the BC Liberals refused to do.
My 2 bits
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