(Editors Note: This story has been corrected to fix a miscalculation of the impact of the 2.5% and 4.5% rent increases).
The B.C. government has overturned a 4.5% increase for renters and set the next rent hike at a maximum of 2.5%.
The NDP government took some heat earlier this month when the Residential Tenancy Branch set the maximum rent increase for 2019 at 4.5%.
Critics of the increase said Premier John Horgan had promised a $400 renters rebate in the lead-up to the provincial election, but never made good on the promise and, instead, presided over the highest rent increase since 2004.
But Horgan’s government is heeding the advice of its Rental Housing Task Force and capping the 2019 increase at 2.5%.
"It's simply not sustainable for renters, many of whom are on fixed incomes, to see their rent increase by more than inflation each and every year," Horgan said in a press release.
"We have to eliminate the risk of such huge increases for renters. Our new approach strikes a balance between giving relief to renters while encouraging people to maintain their rental properties."
Under the current formula, the Residential Tenancy Branch allows annual rent increases of 2% plus inflation. A 4.5% increase would have meant that an average renter paying $1,200 a month could see their rent increase by $648 in 2019.
The provincial government has eliminated the annual 2% automatic increase provided by the Residential Tenancy Branch, and is instead basing next year’s rent hike based solely on inflation.
The 2.5% increase means the average renter paying $1,200 per month would pay an additional $360 in 2019, should their landlords decide to raise their tenants rent by the new allowable maximum.
The government is allowing for special exemptions for landlords who may need to raise rent over the cap to cover maintenance costs.
“Our Rental Housing Task Force members have heard time and again that renters are struggling to pay yearly maximum rent increases, while basic repairs and building maintenance are left undone," said task force chairman Spencer Chandra Herbert.
"Taken together, these changes will make rent more affordable for British Columbians, while also helping ensure needed repairs are completed to maintain and improve rental housing."