With the provincial government's decision to limit landlords’ rent increases to 1.4 per cent next year, one Kamloops property management company said the change will affect their bottom line, potentially leading to higher rent for new tenants.
In the past, landlords could increase rent by two per cent plus the rate of inflation, but the province has eliminated the additional 2 per cent for 2021.
Kelson Group president Jason Fawcett said the company has already reduced some of the increases given to residents.
"However, 1.4 per cent, which is supposed to be the inflation rate, is probably not that accurate to most of the expenses apartment owners and landlords have. So, most likely, it's going to have an impact on us," he said.
Fawcett said a number of the company's apartment buildings in Kamloops are older, requiring more maintenance as time goes on.
"We do spend a lot of money maintaining them … Sometimes using the rate of inflation isn't a fair adjustment for us," he said.
Fawcett said one aspect often not considered when implementing rent increase limits is that it is new renters who pay the price to make up for the lost increases for longtime renters.
"That is sometimes forgotten in protecting all renters and not just those who have lived in their apartments for a number of years," he said.
Fawcett said the real estate and rental markets in Kamloops have remained strong, noting that, if if continues, increased demand will mean higher prices for new renters.
But fears of COVID-19 having a widespread impact on renters have so far not been realized, Fawcett said.
Initially, Kelson Group was expecting more vacancies in the city due to people moving in with each other or returning home to their parents. But those who have had to move have been replaced by people new to the city or, more recently, pipeline workers moving in for the twinning of the Trans Mountain pipeline.
The province's rental programs have also helped lessen the impact, Fawcett said. "It's worked out reasonably well, but it's expired now. So we're hoping to find out if there will be an impact in the fall.”