Real estate bidding wars hitting Vancouver's rental market
Published Friday, July 15, 2016 6:55PM PDT
Many Metro Vancouver residents have given up on buying a home in the area in the near future, but now even renting is becoming more competitive.
Bidding wars are common in the region's red-hot real estate market, but are now starting to be spurred on by landlords as well as sellers.
Courtney Moule, a CTV graphics operator, wants to move from her ground-floor suite to the downtown area, so she can be closer to work. She has a full-time job and good references, but she's being shut out by other renters.
She said she was willing to pay $1,900 for a one-bedroom in Yaletown recently, but the landlord decided to go with another applicant.
"They were offered $1,000 (per month) more," Moule said.
Another renter, Devin Cox, was also a victim of a rental bidding war.
"It was a zoo. Twenty to 30 people cramming into these little apartments," Cox said of the battle to place the highest bid.
And on Craigslist, a recent ad was offering an apartment for $799 per month, which seemed like a great deal. But at the bottom of the ad, a message read: "Rent to be determined by winning bid."
Under provincial law, it's perfectly legal to take bids for rent when a new tenant moves in. In Metro Vancouver, where the vacancy rate is less than one per cent, landlords hold the key.
"It really means tenants don't have any bargaining power. They might be forced to take a unit in poor condition," Tenant Resource and Advisory spokesperson Jane Mayfield said.
And bidding wars on new leases aren't the only way landlords are raking in the cash. There are rent controls in effect, but advocates say some are getting around the rules by getting their tenants to check a box for a fixed term lease. When the lease is up, the tenant can stay, but they're subject to a new rate.
The City of Vancouver said it's currently fighting the housing crisis with a tax on homeowners who keep their residences empty, in an effort to encourage them to open up their homes to renters.
In the fall, it may crackdown on the explosion of owners opting to use Airbnb instead of long-term leases, so that homes will be available for people who want to live here.