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B.C. court quashes City of Vancouver appeal for ‘rent control’ in SROs

Wendy Pedersen of the DTES SRO Collaborative: “This just creates more chaos.”
srofraser
The City of Vancouver has lost an appeal to reinstate bylaws council approved in December 2021 to control rents in single-room-occupancy hotels. Many of the buildings are located along the East Hastings Street corridor in the Downtown Eastside.

The B.C. Court of Appeal has quashed an attempt by the City of Vancouver to overturn a previous ruling that stopped a form of rent control implemented in privately owned buildings that cater to low-income tenants.

The city launched the appeal after the B.C. Supreme Court ruled in August 2022 that a set of bylaws approved by city council in December 2021 to control rent increases in single-room-occupancy (SRO) buildings were beyond the legal authority of the City of Vancouver.

The city’s objective was to cap rent increases between tenancies.

Advocates suggested this change would help end wrongful evictions where landlords seek to terminate tenancies, create vacancies and raise rent beyond the allowable maximum prescribed under the Residential Tenancy Act (RTA).

In the Court of Appeal ruling, released Feb. 2, Madam Justice Joyce DeWitt-Van Oosten upheld the Supreme Court decision. She said the city cannot use the Vancouver Charter to regulate SRO owners because they are already regulated by the provincial government under the RTA.

“As such, with the bylaws in place, the respondents were regulated twice on the subject of rent control,” wrote Dewitt-Van Oosten.

“[The Charter] precludes duplication of this nature and it was unreasonable for the city to assign itself a broader scope of authority when adopting the bylaws, notwithstanding the compelling issues it sought to address.”

Court of Appeal Justices David C. Harris and Gregory James Fitch agreed.

Dewitt-Van Oosten noted in her written judgment that the provincial government opposed the city’s request in 2019 to amend the Residential Tenancy Act.

She also pointed to a provincial rental housing task force report in 2018 that recommended the B.C. government continue to tie rent to the renter, and not the unit.

“The provincial regime reflects an intentional choice to tie rent to the renter, rather than the unit,” she said. “The province has elected to engage in rent control, albeit in a different form than desired by the city.”

City of Vancouver 'disappointed'

The city said Monday in an emailed statement that it was disappointed with the Court of Appeal’s decision.

“The city respects the judicial process and remains committed to addressing the urgent need for low-income housing and protecting low-income residents residing in SROs,” the statement said. “We will be taking the time necessary to determine next steps.”

The push by the council of the day to implement what was described then as “vacancy control” was connected to rising rent increases in privately owned SROs — a continuing trend highlighted in city staff reports over the past decade.

Staff’s most recent downtown core low-income housing report, released in May 2023, showed the average rent in privately owned SROs was $681 — an increase of 21 per cent, or $120 over what it was in 2019.

The report said the cost rises to $736 per month if rents paid at Chinese benevolent society-run SROs or private hotels operated by non-profits are excluded. 

The city based the calculation on rent data collected from 62 privately owned and operated SROs, five private hotels operated by a non-profit and seven buildings owned and operated by Chinese benevolent societies.

Some other building owners, as Glacier Media reported in August 2023, have offered tenants buyouts and then advertised the same rooms for rent at a significantly higher price. Last summer, the Lotus Hotel on Abbott Street was renting furnished rooms up to 172 square feet for $1,995 per month.

'It's terrible'

Wendy Pedersen, executive director of the Downtown Eastside SRO Collaborative, said Monday she was “disheartened” by the Court of Appeal’s decision. Pedersen has been one of the many advocates campaigning for rent control.

“It's terrible,” she said. “It just puts more work on the shoulders of all the people and workers in the community of the Downtown Eastside who respond to homelessness and overdoses and the chaos in people's lives.”

Added Pedersen: “This just creates more chaos because [rent increases] is one of those forces that's causing chaos in the community. We're tired of it.”

Dewitt-Van Oosten said that during the Supreme Court proceedings, ample evidence was produced that showed SROs are often the most affordable housing available for people with low incomes “and are the last resort before homelessness for many.”

“A lack of affordable housing, coupled with low vacancy rates has resulted in increased competition for scarce affordable housing and those with the least income or who may find it more difficult to find appropriate housing, fall out of the bottom of the housing continuum into homelessness,” she said.

The judge said there was also evidence that rent control eliminates rapid rental escalations, speculative investment and encourages rental tenancy stability.

“On appeal, no one takes issue with these propositions or with the laudability of the city’s efforts to encourage and maintain affordable housing for the most vulnerable,” added Dewitt-Van Oosten.

“These are clearly compelling issues. Understandably, they are also of immeasurable significance to renters and affordable housing advocates, particularly in Vancouver’s Downtown Eastside. However, these are not the matters before us.”

DTES landlord's view

Christopher Wall, who owns seven SROs in the Downtown Eastside, has been on record opposing rent control since council considered it in November 2021. Wall spoke to council at the time and argued rent control would only make things worse for tenants.

In an interview Monday, Wall said the cost of operating his buildings, which include The West Hotel and Hotel Empress, continues to increase. Capping rents would make it difficult to spend the money needed to maintain his rooms, he said, noting he pays “market value” for hydro, gas, taxes and insurance.

“If you remove the incentive for a private owner to improve rooms, to replace toilets, to replace sinks, have 24-hour security, garbage removal, pest control — all of those things — then rooms will just completely become dilapidated,” he said.

Most of Wall’s tenants pay between $550 to $1,000 a month, with one self-contained room at the West renting for $1,250 per month.

Wall said it was unfair for council to impose a set of bylaws that would increase an owner’s expenses. Even without the bylaws in place, he said, costs have increased to a point where new tenants moving into his buildings are being charged $800 to $1,000 a month.

As Wall has said in previous interviews, if advocates for rent control want to see it become a reality, then a vigorous campaign has to be launched to lobby the provincial government to buy the city’s private buildings, he said. 

“They’ve got to get these guys to buy us out because that's the only way it's going to happen,” Wall said.

The alternative, he said, is landlords continuing to turn over rooms and increase rents, or sell their buildings to profit-maximizing investors.

In October 2023, Glacier Media reported that the B.C. government paid $8.2 million for one of Wall’s buildings — the 48-unit Keefer Rooms in the 200-block Keefer Street. Wall continues to publicly state his desire for the provincial government to buy the remainder of his buildings.

mhowell@glaciermedia.ca

@Howellings