1896 replies to this topic

[Mike K.]

I should perform a rappelling stunt from the top of Promontory.

[LeoVictoria]

But rent increases are regulated for continuing renters? The graph doesn't show the whole picture.

 

It's rents as surveyed by CMHC in rental units of 3 or greater.   That would be the combination of all rents including new and existing tenants, and as far as I'm aware shows the whole picture (not including private condo or suite rentals of course).

Edited by LeoVictoria, 05 February 2016 - 01:38 PM.

[lanforod]

My point is, you can't raise the rent those 5 or 6% points unless you have new tenants coming in because of the restrictions. So it isn't a free market. I suspect without the regulation, there would be more upward pressure.

[dasmo]

My point is, you can't raise the rent those 5 or 6% points unless you have new tenants coming in because of the restrictions. So it isn't a free market. I suspect without the regulation, there would be more upward pressure.

True.

[LeoVictoria]

My point is, you can't raise the rent those 5 or 6% points unless you have new tenants coming in because of the restrictions. So it isn't a free market. I suspect without the regulation, there would be more upward pressure.

 

Sort of.   We have rent controls here, and yet there are several instances of our apartment rents going up north of 5%/year.  So either the CMHC data is a bit noisy, or there was a lot of turnover those years where they could charge market rents.

Also there is a limit to how much rents can go up for existing tenants but research shows that those kind of regulations don't actually reduce rents in most markets, they just even out the increases.   

 

Say you have a $1000/month apartment and the vacancy rate is really tight for a couple years such that the free market would dictate 5%/year rent increases.   However due to regulations, rents can be only raised by 2.9% (the rate for 2016).   So after two years, the rent in this place should be $1102, but actually it is only $1058 due to the limits.   Well now the 1500 new rental units come online and vacancies go up.  The increases dictated by supply and demand fall to 1%/year.   But the landlord of the apartment is still behind in rent, so he will continue to charge the max increase until his units catch up to fair market rent (or close).   So 2 years later, that same place fair market would be $1124 while the rent controlled place going up at 2.9% is now $1120.

Edited by LeoVictoria, 06 February 2016 - 07:44 AM.

[lanforod]

In theory perhaps. The allowable increase also goes up and down though.

[Mike K.]

No landlord wants to price out a good tenant. The increases can be in response to growing costs but they may be levied every 2-3 years and not annually, but if a landlord wants to "motivate" a tenant to leave then they can use annual increases to do so.

Again, most renters in this region do not face the maximum allowable rent increase annually and many have no increases over several years.

[dasmo]

In theory perhaps. The allowable increase also goes up and down though.

Also true. It bounces around 4.5%-2.5%

[Mike K.]

Residents “renovicted” from Fairfield apartment block

http://victoria.citi...partment-block/

 

A multi-unit apartment building in Victoria's Fairfield neighbourhood has been confirmed as the year's first large-scale "renoviction" property.

 

Heywood House at 999 Southgate Street is a four-storey, 31-unit 1960's-era rental building planned to undergo interior and exterior restorative work this spring. In order to accommodate the upgrades, which have already begun in several areas of the building, residents have reportedly been served with eviction notices citing the end of April as the move-out deadline. [Full article]

[Redd42]

Residents “renovicted” from Fairfield apartment block

http://victoria.citi...partment-block/

 

A multi-unit apartment building in Victoria's Fairfield neighbourhood has been confirmed as the year's first large-scale "renoviction" property.

 

Heywood House at 999 Southgate Street is a four-storey, 31-unit 1960's-era rental building planned to undergo interior and exterior restorative work this spring. In order to accommodate the upgrades, which have already begun in several areas of the building, residents have reportedly been served with eviction notices citing the end of April as the move-out deadline. [Full article]

 

The condition of most of the rental stock in Victoria is why I live where I do. When I sold my condo and went back in to the rental market, it was incredibly depressing. i could not see myself living in any of those unrenovated buildings. Old apts that show the wear and tear of decades of tenants. I was looking at 2 bedrooms and the rents were $1000 - $1200.

 

But then I saw the ad for my apt - very large 1 bedroom in a heritage house that was only recently renovated. The rent is $1575. Gulp! But I have been here a year and a half and still love it. I don't regret at all paying the extra money each month for a MUCH nicer place to live.

[sebberry]

Sounds like the landlord of Heywood House did things the right way and provided lots of notice.

Like some old BC Ferries vessels, these 60's era buildings are not in particularly nice shape and are due for a significant mid-life refit. 

 

Will the landlord be able to charge higher rents after the renovation?  Of course, but that's because the value of the building has been increased and it's made a nicer and safer place to live. 

[Baro]

Yeah we're paying about 1400 for a 2 bedroom, but in a nice building that isn't a past-its-prime 60-70's apartment that's never been renovated.  So much of Victoria's housing stock falls into that category.  There was a boom of apartment construction around the same time then nothing.  After that stock wears out there's going to be a shock to the system.  We're building some now, but it's going to take decades for it to become remotely affordable for the average person.

[Mike K.]

Oh c'mon, you're paying $1,400 for an old 2BR and $375 more for a brand new 2BR highrise apartment is suddenly unattainable?

[Redd42]

Oh c'mon, you're paying $1,400 for an old 2BR and $375 more for a brand new 2BR highrise apartment is suddenly unattainable?

 

Another big difference between most of the older suites and the newer ones, besides being all new and stylish, is that the newer units will have dishwashers and insuite laundry. Oh, and one and half baths, even in my one bedroom, but definitely get that in newer 2 bedrooms. I can usually tell exactly the pre-date a unit was built if it has more than one bedroom but only one bathroom.

 

To me the extra money I pay each month is totally made up by the much comfier lifestyle - the laundry and dishwasher. These both save time in my day to do other things I enjoy more.

[sebberry]

Oh c'mon, you're paying $1,400 for an old 2BR and $375 more for a brand new 2BR highrise apartment is suddenly unattainable?

 

That extra $4500/yr is a fair chunk of change...

[Mike K.]

Sure, but it's your dwelling, the single biggest expense. But I just don't see how average rents new-build rentals are going for are targeted at the super rich or anything, they're marginally more expensive than 50 year old units -- and there's huge value in that uplift as Redd describes.

[Mike K.]

Baro, I didn't intend to single you out, but I do feel that for the rent that is being charged in new-builds the value is there. Yes, you'll pay more than in a comparable 1960's building (upgraded or not) but you're also getting something in return that you can't get with an older building. And people will pay that, they'll make it work if that's what they want 

[Jason-L]

If you go with the theory that housing/rent shouldn't take more than 50% of your income, moving from a $1400/month place to a $1775/month place moves your housing costs to 63.4% of your income.  So you'd need to go from having a $2800/month take home, to needing $3550/month ... so like a 26% raise.  Which is gonna be tough to find in this disruptive service economy where $24/hr jobs are kind of hard to come by...

 

Not to mention you've now taken that $375 that would have been spent on discretionary items like restaurants, entertainment, doodads and such out of the local economy, and into the rental agencies pool.

Edited by Jason-L, 08 March 2016 - 10:39 AM.

[Mike K.]

Oh for sure, but 2BR apartments are typically rented by a couple so you need to double that income. A 2BR at $1775 for a nice, brand new unit rented by a couple is a heck of a better deal than a single person renting a 1BR for $1,200.

Of course everyone's mileage varies and some people earn more than others, but $375 more for a brand new concrete unit does not make it an unattainable luxury reserved for the super rich, I guess is what I'm saying.

[VicHockeyFan]

 

 

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