With a new rent levy on the horizon, it seems the city of Vancouver may have finally found its answer to the rent problem.
The city is poised to enact a rent collection law that will raise the maximum rent a landlord can charge a tenant in Vancouver by 50% or $150 a month from the current maximum of $800.
It also sets a limit on the number of times a landlord may charge a rent.
The new law also imposes a $50 charge for the first time in 2017.
Vancouver city council voted in favour of the rent collection bill in February, and now city staff have approved it for a second review.
The law, which was first introduced in Vancouver in 2004, has raised eyebrows from critics.
A 2015 study by the Urban Institute found that Vancouver’s rent collection system is among the worst in Canada, with nearly half of the city’s landlords illegally charging more than $300 a month.
Vancouver has an average of three rental agencies per rental unit, and it’s not uncommon for one of them to be more expensive than the other.
The rent collection ordinance is designed to curb such predatory practices, said Vancity-based rent collection lawyer Kevin Rehman.
The Vancouver City Council unanimously approved the rent levy bill last year, and Mayor Gregor Robertson said the law will help Vancouver become a city that “is welcoming to people of all income levels and abilities.”
“It will create a safer rental market for renters, create more opportunity for those in the middle, and for families,” he said.
Rehman said he believes the new law is “very progressive” and “will create a very stable rental market.”
In an email to VICE News, Rehmann said he expects the new bill to pass by council in a few weeks.
But, he warned that if it’s a “no vote” it could take years to implement the new rules.
“If the new ordinance becomes law without a vote, we will be facing a legal fight for years to come,” he wrote.
A tenant’s rights in Vancouver are not yet protected by the current rental laws, so the rent tax is only a temporary measure.
The city’s rent-collecting ordinance requires a tenant to be given notice of a proposed rent increase, but there are no penalties if a landlord doesn’t pay the increase within the allotted time.
But if the city passes a rent levy, ReHman said, the rent collectors could have a major impact.
“There will be a tremendous amount of pressure on landlords to raise rents,” he told VICE News.
“In many instances, landlords may not be able to meet their rent obligations if they don’t have enough money to meet that demand.”
Rent collection laws were introduced in cities across Canada as a way to discourage landlords from evading rent payments.
But critics say the new legislation will give landlords a financial incentive to abuse tenants and will lead to more expensive rents for renters.
In 2016, the Canadian Taxpayers Federation, a nonprofit tax-credit advocacy group, reported that nearly 40% of Vancouver’s property tax bill was owed to landlords, and the city was facing $15 million in unpaid rent.
“We believe this law is not the best use of scarce tax dollars,” said Rob Wilson, CEO of the CTF.
“It will be extremely costly to enforce and will create an unfair and discriminatory tax system that will benefit those who can afford it the most.”
The Vancouver rent collection act was proposed by Vancouver city council in 2015, and is one of the first major pieces of rental legislation in Canada.
The rent levy is set to be implemented on July 1.