Landlords in Vancouver have started to do some major incentivizing in order to rent out their properties — like providing first month’s rent for free, offering to cover renters’ moving costs, and reducing security deposits required for pet owners.
Among the companies making such offers are Rhapsody Living, which manages an apartment building called the Duke in the Mount Pleasant Neighbourhood, and Wesgroup, which owns New Westminster Apartments.
Some of the offers out there are a little more insulting: in the condo market, for instance, some developers have tried to offer millennial presale buyers a year of free avocado toast. More seriously, they’ve also offered reduced deposit prices and even an allowance for decorating the unit.
Vancouver is notoriously unaffordable when it comes to housing. The city made headlines earlier this year when National Bank Financial reported that in Vancouver, it takes 34 years to save for a down payment on a house. Plus, with a vacancy rate of 1%, it has remained an especially difficult place for renters to find somewhere to live.
Tom Davidoff, an economist who studies real estate at the University of British Columbia and who has used Craigslist listings to track rental rates in the city, told the Toronto Star that increases in rent rates appears to have halted.
“These (rental) incentives suggest, at least anecdotally. . . that it may not be so tight,” he said. “The vacancy rate may be higher than we thought.”
The very idea of vacancy might actually have a lot to do with why landlords are starting to get creative with their pricing. Davidoff thinks that aside from new units coming onto the marker, Vancouver’s empty homes tax and speculation tax are part of the reason why Vancouverites are starting to see these kinds of incentives from landlords.
Vancouver got hit with the empty homes tax in 2017, and the speculation tax in 2018. These taxes aim to deter individuals from buying properties in wealthy neighbourhoods as investments and then letting them sit empty, which only contributes to rising home prices and an already-low vacancy rate.
A home is considered vacant if it isn’t rented for at least 180 days of the year. If that’s the case, it gets taxed at 1% of the home’s value. So, for a $3-million home home, the homeowner would see a $30,000 tax bill.
But one way homeowners can get around having to pay these taxes is by renting out those properties.
Other reasons for making these special offers is about wanting to keep renters around. Michael Drouillard, a lawyer that represents Coltric Properties, told the Star that among the reasons for doing this include trying to “incentivize a long-term tenancy.”