It’s getting harder and harder to be a good long-term accommodation landlord on the Coast. 2022 property tax and water bills for the modest rental unit that my family owns hit my inbox last week. Ouch! As landlords that try to respect the law and pay bills on time, the rental revenue that my family counts as a supplement to other income streams is going to dip in 2022; significantly.
While the BC government capped rent increases for residential properties at 1.5 per cent this year, increases for property taxes and utilities, two of the larger expenses that I need to cover with the rent that I charge, went up by 28 per cent over last year’s levels.
Yes, the assessed value of that property did increase but that was a market level increase only. We maintained the property but did not add anything to it.
It seems a tad unfair to me that the province did not hold its school tax revenue ask to the same small increase that my rental revenue was being held to. Between 2021 and 2022, school tax on the property jumped by almost $200. Given that behaviour on the part of the province, I guess the SCRD felt justified in giving cursory consideration to the ability of landlords to afford to continue to provide rental opportunities for locals when it increased Area A property taxes and water charges in the same percentage range.
I understand that costs are going up, for government as well as for individuals, and that somebody, AKA the taxpayer, has to cover those costs. But where does it stop? If governments want to have a positive impact on the rental housing crisis, what are they doing to encourage people to keep property in the local rental market?
At times like this, the lucrative short term rental market seems to appear more and more attractive to me. That, despite a fair amount of community scrutiny of landlords who opt for that direction. Many are less than shy about voicing their concerns over what they view, and what is, to a degree, commercialization of residential neighbourhoods.
The property I’m involved with has been in the long-term rental market since we took possession of it more than 11 years ago. I have researched what it would take to switch that property to a short-term rental. Did that by speaking with friends who owned STRs and heard about the pros and cons of that business. Yes, the demand for units can be high during the warmer months, but from November to February, renters are much harder to come by. No business runs itself. Marketing, managing and maintaining an STR takes time and money. To do it well also takes skills that I didn’t have and would need time and focus to develop.
While there are risks with letting anyone rent your property, to me, constantly changing renters seem much riskier than properly screening and selecting a long-term tenant.
All those explorations and estimates went out the window for me in 2020, when the SCRD, in response to community calls for action about “problem” STRs, reiterated and strengthened rules under its zoning bylaws. Those clearly now limit STRs in the Coast’s rural areas to properties occupied by a permanent resident.
That meant for my property to make the foray into that new market, a second unit would need to be developed, so that there could be a permanent occupant and space for secondary renters. That scale of renovation was not an effort or investment that I was interested in making. So the property stayed in the long-term rental market. While not a means of “getting rich quick,” it is covering the expenses and generating a return.
Beyond a landlord’s revenue property balance sheet, there is a level of satisfaction to playing a very small role in helping to address the Coast’s housing affordability crisis. In 11 years, I have had two primary tenants in the rental. Both great young people working hard to build lives in an area that they love and chose to live in and a pleasure to have as renters.
But by taking bigger and bigger bites out of the revenue landlords realize from their investments, governments aren’t increasing rental supply or addressing affordability issues. They are just making it more difficult for the private individual to continue to provide safe, well-maintained accommodations to others in their community.