Fair and reasonable profitability is essential to creating safe, secure and sustainable Vancouver rental housing.

If government policy chokes the profitability out of rental properties, we could lose the much-needed supply. This could result in poorly maintained substandard housing and ballooning of black market activities.

Safe, secure, and sustainable rental housing is important to the success of any city. When rent controls are overly restrictive they prohibit real estate investors from receiving fair and reasonable profits. This is where we may start to see investment dollars moving to other opportunities and consequentially a decrease in rental housing supply.

He who holds the gold makes the rules

How can real estate investors finance much-needed maintenance and repairs to ensure safe secure housing to all sectors? It is important to always remember the Golden Rule when setting policy: “He who holds the gold makes the rules”

When we see policymakers trying to change, break, or even disregard “The Golden Rule”, we inevitably see black market activities rearing their ugly head to ensure profitability is still achieved by the ones who hold the gold. Black market activities can include, for example, charging “key money”, (buying and selling rent-controlled leases under the table), not declared and untaxed income for real estate investors, loss of tax revenues for the government, and no savings for tenants.

While it’s not a legal practice it has often been a common practice in large urban centers which are over controlled and regulated. The BC rental task force must keep in mind fairness to both real estate investors as well as tenants. This is key to long term effective policy as greedy actions by owners or renters will inevitably have negative consequences for both.