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When the lease on Rebecca Holt’s apartment was coming up for renewal in the summer of 2020, she began noticing something unusual in her South Granville neighbourhood: for rent signs.
The urban planner had moved back to Vancouver from San Francisco the summer before; at the time, the rental market was red hot, so she snapped up a one-bedroom in a converted South Granville rooming house. The rent was $2,050.
When the year lease was almost up, Holt spotted a nearby character building that was offering newer, larger suites and there were five or six available—an unimaginable prospect pre-COVID. Among the suites was a bright, roomy fourth-floor one-bedroom for $1,600.
“I was like, holy crap, $450 a month cheaper? That’s almost six grand a year,” says Holt, who told her landlord she would stay put if they dropped the rent. The answer was no, so she gave notice. “It makes a huge difference.”
But Holt wasn’t the only renter getting a significant reprieve.According to a report by Rentals.ca, the average rent for all Canadian properties listed on the site was down nearly 10 percent year over year.
By December 2020 in Vancouver, one-bedrooms were down 5.2 percent on average, to $1,865, while two bedrooms were down a whopping 13.8 percent, to $2,636. In Burnaby, one-bedrooms were down an average of 9.3 percent, to $1,661, and in Victoria, they were down 5.4 percent, to $1,547.
In some corners, the shifts were even more dramatic. Landlords and developers began offering several months free and other perks, while renters were negotiating their monthly rates down. As a result, tenants like Holt saw their rents drop 20 percent or more.
The dip was the result of a confluence of factors tied to the COVID-19 pandemic—the stream of immigrants slowing to a trickle, the absence of international students, young Vancouverites living at home longer due to lost wages and the push toward remote work that enticed renters out of the downtown core and even the city itself.
“Folks who were downtown were like, ‘I have to work from home? Maybe I’ll live someplace out in the suburbs,’” says UBC professor Tsur Somerville. “A small 400-square-foot studio is far less desirable if you have to spend all your time in it, because then it’s a jail, not a home.”
But while B.C.ers rejoiced at the unveiling of the province’s reopening plan in late May, it likely means a return to tough times for renters.
Already, the average Vancouver one-bedroom rental was back up to $1,935 in May, according to Rentals.ca. That’s a 2 percent year-over-year increase, and it’s higher than the $1,882 average the website reported for February 2020.
David Hutniak, CEO of LandlordBC, says the provincial government did a commendable job of getting both landlords and tenants through the COVID-19 crisis, and managed to avert a total crash in the market.
Smaller landlords with a basement suite or an investment condo were especially hard hit because many are heavily leveraged, while the moratorium on rent increases and evictions put some into an even deeper bind.
But what the COVID crisis has confirmed, he insists, is that rental housing is supply and demand-driven, and that when supply increases, rents come down. As a result, governments need to push for more purpose-built rentals to alleviate the strain on renters.
“A big part of our rental housing crisis is simply a matter of supply,” argues Hutniak, who says he would love to see a balanced market with a 3 or 4 percent vacancy rate. “This is not rocket science. It’s economics 101.”
Urban planner and SFU City Program director Andy Yan doesn’t think “normal” as we knew it is coming back after the pandemic. The issue, he says, isn’t only about housing; it’s about how the economy recovers, and, specifically, how employment evolves.
Yan points to a recent Statistics Canada survey finding that roughly 40 percent of Canadian jobs can be done from home—while 60 percent of Canadians, many of them in lower-paying industries like manufacturing, tourism, retail and hospitality, will likely make up the bulk of urban renters. In other words, the dip we saw during COVID isn’t nearly enough.
“People who are in location-locked jobs that don’t pay that much may still struggle until rents fundamentally drop rather substantially,” he says. Even before the pandemic, low-income families and seniors were especially affected, he adds, and the pandemic has revealed glaring inequities in the B.C. economy.
“Long term, it’s about defining new rules of the road—or new rules of the house,” he says. “I think this is the opportunity to help redefine the post-pandemic economy, in particular concerns around housing and equity.”
Back in South Granville, Holt loves her new suite. It has lots of light, a private balcony, mountain and city views, better laundry and amenities, and a better space for her to work from home.
Holt points out that once a suite is tenanted, landlords can’t raise the rent by more than the rate of inflation—and last year they couldn’t raise it at all—so renters who were able to “lock in” during the pandemic will likely enjoy lower rents for years to come.
“I can be here for however long and I know my rent will only go up by a few percent. I’m probably not going to live here long enough to see it go past $1,700,” she says. “And for the location and the space I have, that’s a bit of a gift.”