Greater Victoria rental prices make biggest leap since 1991: CMHC report

In 2022, an empty, two-bedroom Greater Victoria apartment unit was rented, on average, for 33% more than occupied units in the same building.

That’s one of the statistics leading the Canadian Mortgage and Housing Corporation (CMHC) to call 2022 a record year for rent growth in the region. The housing corporation’s annual rental market report was released Thursday, revealing a dizzying rent increase of 7.7% (on average) from 2021 to 2022—the biggest jump in 32 years.

On average, a two-bedroom unit in a purpose built rental would cost $1,699 per month in 2022, the report said, up from $1,571 in 2021. And units in structures built after 2005 had higher turnover rates, leading to significant rent increases.

Currently, annual rent increases are capped at two per cent. But to Emma White, the vacancy control coordinator for the Together Against Poverty Society (TAPS), the answer to rising rent is a simple one: In addition to an annual cap, limit rent increases between tenants.

“This, for us, really just underlines the evidence of a need for vacancy control,” she said. “Right now, we only have that yearly limit on rental increases, but no cap on how much a landlord can increase the rent once a unit becomes vacant.”

The CMHC’s data does show that any Greater Victoria renter facing a move is likely to also face a significant rent hike. For example, on average, an occupied bachelor suite is being rented for $1,134 while vacant bachelor units are, on average, renting for $1,525—nearly $400 more per month.

“One of the things that creates so much desperation is the prospect of having to move and not being able to find something that would be within their realistic means of living, White said. “We really, truly believe that our first step that we need to take before we can even begin addressing the housing crisis, is to implement the vacancy control and also get a handle on the number of evictions that are being served, which is just astronomical and BC right now.”

CMHC also reported that unlike 2021 numbers, the City of Victoria’s vacancy rate was lower than outlying communities. The housing corporation speculated that the adoption of hybrid work schedules raised the demand for downtown rentals.

Vacancies in purpose-built rentals increased the most in the Westshore, the report revealed, with the vacancy rate in the area jumping from 0.4% in 2021 to 1.5% in 2022. Most of the 1,411 rental units constructed in the region were in the Westshore, but that supply didn’t temper prices, the report said. The average rent for purpose-built rentals remained highest in Greater Victoria.

“Those rental units are newer, and they're being rented at a higher cost than before,” White said. “Creating more units alone is not enough to tamper the exorbitant increases in rent that we're seeing. And what this data shows is that vacancy control is what we need to do to address that.”

But Landlord BC CEO David Hutniak’s perspective is that the challenge is in a supply that simply can’t meet increasing demand. And that demand keeps growing as students return to on-campus learning and high mortgage rates dissuade renters from making the move to home ownership.

“New rental supply is nowhere near the level required to satisfy existing demand and to provide homes for new renters entering the market,” Hutniak said in an email to Capital Daily.

As a result, renters are staying put due to the lack of options, and that’s putting pressure on the landlord sector, he said, pointing to rising expenses like taxes, insurance and utilities, in addition to what he called “disruptive government interventions” such as the capped annual rent increase.

In December, Capital Daily reported on the CMHC economist’s assertion that the private sector needed to be part of the solution to the housing crisis.  Aled ab Iorwerth called for a “holistic approach to the housing system” that would see governments tackle badly needed low-income housing and the private sector invest in middle-income housing, particularly rentals.

For Landlord BC, it all boils down to the need to reduce barriers and build more rentals—a decidedly different, if not opposite approach to many renter advocates.

Hutniak wrote that he would like to see tenancy legislation that lifts the threat of vacancy control and rent increase restrictions. He also advocated for the elimination of several development policies for purpose-built rentals, including inclusionary housing requirements and community amenity contributions.