View Royal tenants worried after landlord applies for rent increase for repairs

View Royal tenants worried after landlord applies for rent increase for repairs

Residents in a View Royal neighbourhood are at risk of being priced out of their homes after their landlord applied to the province asking to increase rent for building repairs.

Dozens of residents at Christie Point Apartments in View Royal were given notice earlier this month that their owner, Killam Apartment REIT, would seek approval from the province to increase rent by an extra $150 a month to recuperate costs from completed construction work, totalling more than $814,000.

The company notes that if the application is approved, the maximum allowable increase through the Additional Rent Increase for Capital Expenditures (ARI-C) would be three per cent per year, up to a maximum of three years or until the $150 is met.

The Halifax-based company completed roof replacement costs for two buildings, and driveway asphalt paving over the past two years.

“I’m running paycheque to paycheque right now, so there’s not much we can cut down on,” said Jennifer McGladry, a tenant who has lived in the neighbourhood for eight years.

Only 45 residents in the 161-unit neighbourhood would potentially foot the bill.

“There’s a lot of seniors here, fixed incomes, young families, there’s working people, people with disabilities, retirees. There’s a wide variety of people. It’s not a high-income demographic,” said Conan O’Dell.

O’Dell is a former resident but his partner and his children still live at Christie Point Apartments and says many of the residents say they would be priced out of living in the complex.

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Their main concern is that landlords can continue to charge that money even after the project costs have recuperated.

“It unfairly targets tenants and specifically unfairly targets the marginalized in older buildings which are generally more affordable,” said O’Dell.

In 2021, B.C. passed legislation that allowed landlords to pass the costs of repairs to tenants, which was met with scrutiny.

Landlords could apply for an Additional Rent Increase for Capital Expenditures (ARI-C) on eligible repair work such as replacing roofs that are at the end of their service life. The additional rent increase is calculated over 10 years and can be added concurrently with the allowable three-point five per cent annual increase.

However, the Residential Tenancy Board (RTB) only awards increases of up to three per cent of the total monthly rent.

How it works

To recuperate costs from tenants, landlords can only charge tenants up to an extra three per cent for three years or until the total cost of the project has been reached. In these examples, tenant A is paying $1,000 a month, tenant B is paying $2,000 a month and the landlord has been approved for a $150 a month ARI-C application. These examples also follow the current 3.5 per cent allowable annual increase.

Year one

In year one, both tenants would first be subjected to the province’s allowable annual increase. Tenant A’s monthly rent would be $1,035 and Tenant B would pay $2,070.

A three per cent charge would then be added to both tenants’ monthly rent. Tenant A would pay $31.05 extra a month and Tenant B would pay an extra $62.10, totalling to $1,066.05 and $2,132.10 a month, respectively.

Year two

In year two, both tenants’ total rent from last year first increases by the allowable rate, which would be $1,103.36 and $2,206.72 monthly. After the ARI-C charge, Tenant A would pay $1,136.46 a month and Tenant B would pay $2,272.92 a month.

Year three

In year three, Tenant A would pay a total of $1,211.53 a month.

Tenant B would be charged less than three per cent because the total of $150 will be met. In year three, they would only pay an extra $22.52 a month, totalling $2,374.99 a month.

Every year thereafter

While rent will continue to be increased by the allowable provincial rate, landlords cannot tackle more expenses onto tenants from their ARI-C application.

Tenant A still has $51.38 remaining, but landlords cannot apply that amount anymore. Tenant A’s rent $1,253.93 a month. Tenant B does not have a remaining balance of the ARI-C amount because it was paid off in year three. Tenant B’s starting rent would be $2,458.12.

‘They have become aware of how easy it is’

However, the legislation does not have an end date for landlords charging ARI-C, meaning after the project is paid off, the premium amount that was added to rent can remain permanently.

“We have tenants calling our info line every day about additional rent increase applications,” said Zuzana Modrovic, a spokesperson for the Tenant Resource and Advisory Centre.

Modrovic says that landlords have increasingly applied for ARI-C since its enactment and that “they have become aware of how easy it is for them to get the increase that they’re seeking.”

B.C. Housing Minister Ravi Kahlon says the legislation was brought in as a way to stop landlords from uncontrollably increasing rents.

“This was a balance between making sure that rents continue to be affordable but also that landlords make investments, sustainable investments in property to keep them in mind so that we don’t lose more housing,” said Kahlon.

As of June 2024, the Ministry says more than 300 applications for ARI-C have been submitted since the legislation passed and 178 were approved.

The ministry emphasized that tenants can dispute the landlord’s applications during a Residential Tenancy Branch (RTB) hearing.

“Of course with any new initiatives that we bring forward, we review them after a few years and that could be possible in the coming years,” said Kahlon.

CHEK News asked Killam Apartments REIT if the extra charge would be permanent. The company only responded that their application is currently pending and that it pertains to their renovation, safety and maintenance costs.

After at least 50 residents attended Tuesday night’s council meeting, Mayor Sid Tobias tells CHEK News that council passed a motion to draft two letters on their behalf, one to B.C. Housing Ministry and the other to Together Against Poverty Society.

An RTB hearing is scheduled for July 30.

Editors note: Killam Apartments REIT clarified that if the application is approved, the maximum allowable increase through ARI-C would be three per cent per year, up to a maximum of three years or until the $150 is met.

Oli HerreraOli Herrera

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