British Columbia is in a housing crisis. During this time of extreme housing need housing starts in BC are at record lows. Shortages in skilled trades workers are getting actively worse. Population growth is at record highs. This has all been exacerbated by the short-term rental market which is growing rapidly and removing large parts of the housing stock off the market costing renters in BC $2 billion dollars over 5 years. The BC Government is finally taking steps to address this by implementing legislation which curtails short-term rentals to units which are part of the owner’s primary residence. The BC Government is also promising a new Compliance and Enforcement Unit (CEU) to assist municipalities with this legislation. The BC government is promising that this new legislation will work like the Residential tenancy act. Knowing how the RTB works, and its corresponding CEU indicates that the BC Government is not taking the housing crisis seriously.
The Canadian Mortgage and Housing Corporation CMHC recorded 46,721 dwelling starts in BC for 2023 and that number is trending down. The CMHC also predicts BC is expected to need 600,000 – 700,000 new homes by 2030 for a Canada wide population growth to 44 million people. That places BC’s housing starts in 2023 at 46.7% of the required 100,000 starts needed. That number is not going to increase either as skilled trade shortages are limiting the maximum amount of houses that BC can build. These restrictions are why it is so important that BC government focus on other solutions to the housing crisis, such as banning short term rentals. Instead, BC is wasting good short term rental legislation by breaking it before they have even started it.
British Columbia’s Residential Tenancy Act promises harsh penalties for landlords and tenants who break its laws. Landlords can face paying tenants’ compensation totaling a year’s rent. Tenants can face eviction with as little as 10 days’ notice. On top of these penalties, the Act allows for fines reaching $5,000 per infraction, per day for landlords and tenants who attempt to circumnavigate the dispute arbitration process. On paper BC offers a robust regulatory environment for rentals in BC. However, BC has the highest rate of no-fault eviction in the country. Tenants are increasingly being illegally evicted out because of profit seeking by landlords. Why do landlords feel empowered to do this? The simple answer is the RTB is chronically underfunded. Yet the BC housing minister Ravi Kahlon promises that the new CEU will be modeled after the Residential Tenancy Branch’s unit. My experience with the CEU of BC’s Residential Tenancy Branch makes me think the new CEU will not be effective. Instead, my experience also highlights why the new short-term CEU will be ineffective.
I got my eviction letter on July 17, 2022. The letter simply stated the new owners of the unit wanted to move relatives into the unit I was renting. Included with the letter was the required RTB-32 (two-month eviction form for family use). Like so many in BC I struggled to secure housing on such short notice. Two months later I moved out and promptly became homeless. Luckily, I am a plumber. I was able to live at one of my jobsites, so I avoided many of the hardships of homelessness. Despite my luck I did not have heat, running water, electricity or working plumbing. Two weeks after I moved out, I was hired by the people who evicted me to upgrade the unit I was just evicted out of. It was beyond clear that new owners did not move family into the unit I was renting. However, the hubris of the new landlords blatantly breaking the law and then inviting me to witness their flagrant abuse of the two-month eviction notice almost prevented me from filing a dispute. Had I not found out from my old neighbor that they had bragged to him that they had hiked the rent by $400 I may have not filed a dispute. Nine months later I had a hearing, and I received an order from an RTB arbitrator for $11,860.00. This is always where most news stories stop. For many people, myself included this is where the story starts. The details and nuances of the system crushing those unlucky enough to fall into it.
Throughout the dispute process, the owners of the unit committed several other violations of the Residential tenancy Act. They attempted to stop me from filing by writing me an email in which they told me to accept their offer to settle as they will not comply with an order arising from the hearing. They lied during the dispute hearing about their knowledge of mortgage rates. I was able to prove this through an article they had written on their businesses website which directly contradicted their testimony about what they knew at the time of the eviction. Finally, they failed to comply with the order awarded to me. These issues lead to me filing a complaint with the RTB CEU, British Columbia Financial Service Authority (BCFSA) and Victoria Building Services. I also wrote a letter to the honorable housing minister Ravi Kahlon and premier David Eby about the problems I had experienced with the RTB. Ultimately the two organizations who acted on the information I provided them with were the BCFSA and Victoria Building Services. The RTB CEU wrote to me to inform me that they would not investigate as they only have resources to investigate the most serious contraventions, repeat contraveners and serious threats to life and safety. In response to my letter to the Honorable Minsters Kahlon and Eby I received an email from an executive at the RTB encouraging me to contact their CEU and a condescending explanation about how I would not get any penalties arising from my complaint. This is not the fault of the hard working investigators who staff the RTB, instead it is the fault of the BC government who only provides 10 investigators for the entire province.
To collect my award the RTB was no help in navigating the small claims court process. In fact, there were several omissions and errors on the RTB website around the small claims process. I was on my own. In total I spend eight hours at the courthouse filling documents’, nine hours attempting to serve the documents to the owners who were actively avoiding service. I also spent $239 on unrecoverable service fees ($9.75 x 4 for registered mail and $200 for a service company to serve documents) and $83 in court filing fees ($21 initial filing fee and $31 x 2 affidavit of service fee). I was lucky I could afford this. However, people getting evicted are usually fighting homelessness and low income. These barriers would be insurmountable to them collecting on what they are owed.
By my assessment my landlords committed three violations of the residential tenancy act. They violated section 95(2)(a) by the implied threat attempting to get me to settle, 95.2(3) for refusal to comply with a Residential tenancy order, and 95.2(4) provided misleading information during a proceeding. This adds up to $15,000 in fines according to section. However, the RTB CEU declined to investigate as they lacked resources to investigate, despite the proof I had in writing from the landlords for every offence. My case is not unique, instead I would argue it is the standard. In 2023 the RTB CEU completed 51 investigations and leveed 14 monetary penalties totalling a miniscule $56,200. According to the CMHC the average rent in BC is $1,660 and there are 660,000 rental households that puts the long-term rental market value at approximately $1.096 billion. That means market enforcement accounts for approximately 0.00513% of the total value of the BC rental market. Comparatively, Canadian Securities yearly trading value for 2020 was $4.4 billion, and market enforcement resulted in $45 million in fines and 19 years of jail time or approximately 0.9375% of the total market value. This means ignoring jail time, the famously lax CSE enforcement applies fines at a rate of 182 times more than the RTB CEU. Considering BC leads the country in no fault evictions I doubt that BC landlords are 182 times more honest than securities traders. In my case my landlords were not honest. Finally paying me a little over 13 months after I was initially evicted, facing no penalties from the RTB for their actions. Thus, they were able to recoup the costs of the eviction in 16 months. Making my eviction and ensuing homelessness a simple business decision.
So why does the BC Government want to model the short-term CEU after the RTB CEU? I would argue that they are doing this for the same reason that the RTB CEU is so bad, it gives the illusion that the government is addressing the housing crisis. Personally, if I owned a short-term rental, I would be utterly unconcerned with the new legislation coming into effect next month.
What will the short-term rental CEU look like? Apart from government announcements stating it will be modeled after its RTB counterpart there is little in terms of what this unit will look like. The BC budget doesn’t have any idea of what the short-term CEU will look like either. The 2024 BC budget contains zero mention of funding allocated towards the creation of a compliance and enforcement unit. Instead, the budget references the Homes for People plan for additional details on new housing policy. Upon examination of that document there is only passing reference of enforcement on page 27 of the document. Finally, upon examination of the Ministry of Housing 2024/25 – 2026/27 Service Plan released last month can we find reference to this now mythical short-term CEU in which it is outlined that we will look to the future for the creation of a short-term rental compliance and enforcement unit. However, we can see that there is no money allocated at all for a short-term rental CEU by looking at the BC budget. BC budget 2023 allocated 669 million dollars towards housing for 2022/23, the 2024 BC budget allocated 897 million dollars to housing for 2023/24 with 1,046 million dollars estimated to be spent in 2024/25 budget this is a total increase of 200 million dollars this year and 149 million dollars the year after for a total increase of 349 million dollars. There is plenty of room in this increase for a CEU however Homes for People has several other capital projects which take up a considerable amount of this increase. First, the pilot program allocating 120 million dollars in grants towards homeowners who add a secondary suite to their home, a $400 rental tax credit to renters who make under $60,000 for a low estimate of 20 million dollars per year, 15 million towards the RTB The creation of a 500-million-dollar rental assistance fund over 10 years so 50 million a year. The creation of a 575-million-dollar fund for post-secondary housing over 4 years so 143.75 million dollars a year. 394-million-dollar fund over 10 years for the saving of affordable rentals. For anyone counting we are now at 302.69 million dollars. Assuming inflation at about 8% on the existing 669 million dollars in spending this covers the missing 46.31 million dollars. This is not an actuary’s analysis; it is just some napkin math based off the Homes for People plan. The napkin math paints a clear picture; no money has been allocated towards the creation of the short-term CEU.
It’s not just the budget and my story, and the stories of others, to why we should be skeptical of the creation and efficacy of this short-term rental CEU unicorn that the ministry of housing is promising. BC is well known for having lax enforcement on all our regulatory laws. WorkSafeBC blatantly supports corporate interests at the expense of BC workers. The BC energy regulator regularly gives passes on environmental infractions. BC’s ministry of forests is regularly unable to enforce forestry contraventions due to giving their investigators little resources. The BC RTB was backed up for 9 months in my case, and as we saw above, they issue relatively tiny fines irregularly. Expecting the BC government to suddenly change decades of enforcement across multiple industries and create a highly effective compliance and enforcement unit for short term rentals is laughable.
The BC government’s new short-term rental legislation is being kneecapped. By not having a compliance and enforcement unit ready to go for this the release of the new short-term rental legislation next month is a mistake. Historically poor RTB CEU performance and BC’s awful history with enforcement on regulatory laws casts doubt on how well the short-term CEU will perform once delivered. With the BC Government’s lackadaisical attitude to implementing their own solutions to the short-term rental issue of housing places doubt on their approach to the housing crisis. While it is important to not let perfection be the enemy of progress, we should always hold our representatives to account for their solutions.
Landlord Communication:
Response to letter written to David Eby and Ravi Kahlon about the deficiencies in the RTB:
Response to CEU complaint about landlords not following the Residential Act: Note on email. This email is the end result of a culmination of phone calls which took place before and after the landlords had paid the order.
