by John Streit
(click images to enlarge)

The provincial government appears to be considering possible changes to the legislation which governs the controversial Additional Rent Increase (ARI) program.

Back in the June edition of “A Closer Look” we told you how ARIs are meant to pay for major capital expenditures or expenses in a rental building. Eligible examples of capital expenditures include replacing an asphalt roof at the end of its life, updating single pane windows or a new boiler. Upgrades are not eligible for ARI if the expenses result from inadequate repair or maintenance by the landlord, if the landlord has been paid from another source (e.g., rebates, insurance), or if it’s routine maintenance like cleaning carpets, repairing a leaky pipe under a sink or painting walls. As a result of the program, some renters are seeing their monthly rents increase beyond the allowable yearly percentage.

Now, West End MLA and Deputy Speaker Spencer Chandra Herbert says he sees some areas for change.

“I’m organizing a meeting with people in the West End who are currently dealing with these issues with the housing ministry so that we could get the actual lived experience right in front of policy folks and the politicians. It isn’t a widespread thing - the ARI - it’s not something most folks know about. Meanwhile, we’re dealing with the housing crisis at large. The focus has been on the big pieces like getting more homes built,” Chandra Herbert said.

***Spencer Chandra Herbert* (Legislative *Assembly photo)***

The 16-year MLA said the Additional Rent Increase was implemented in 2021 after consultations with renters and landlords. “The way the former government did it was you had your inflationary increase and two per cent on top of it. Folks thought that was unfair because every year they saw two per cent plus inflation. In some buildings there was no requirement to do major maintenance. So, you had systems failing like heating, elevators, and roofing. So, renters wanted lower rents, but we also want the major capital to be taken care of,” he explained.

Steve Orner moved into his ten-story Bay Tower apartment building at 1461 Harwood in 2011. “The West End is a beautiful place to live with all the advantages of being in a city and taking a walk and being out of the city pretty quickly. The ocean and mountains – all the things that make Vancouver a special place,” Orner said.

Things changed in Orner’s building, he said, after it was purchased around three years ago by Ottawa-based CLV Group from Vancouver-based Hollyburn Properties. “Hollyburn did a pretty decent job of maintaining the building, so we thought. It’s clean but nothing fancy. But when we had a maintenance request there was somebody on site we could go to. And within a day or two these little things would get taken care of. With CLV, their maintenance record is just awful. You must call back East to make maintenance requests. Then they don’t answer. We call the emergency number and get the answering machine. My neighbour has been having issues with his heater and they’ve sent people out three times and it still hasn’t been fixed. A new tenant paying the high rent was promised an in-suite washer and dryer. But nothing. As people move out, they remodel each unit, do a mediocre job and raise the rent. We call the emergency number and get the answering machine,” Orner said.

Over the past several months, residents in Orner’s building have been battling several Additional Rent Increase attempts by CLV. “The first email we got said we were going to get packages with changes that are going to come. So, we got 205 pages with receipts thrown in, nothing was in order, and it was April, 2021. It was just a mess, very unprofessional. Everyone was going to get a [monthly] rent increase of around $118 dollars for capital expenditures. This was the first package. I think we’re on our third one now,” he said.

Orner explains the reasons given for the ARI by the landlord. “They put in a new elevator. They tore out carpeting. They wanted to charge us for carpeting in the first package. There was nothing wrong with the carpeting, it was in great shape. That was totally cosmetic and had nothing to do with health and safety. They put new lights in the hallways and painted the hallways. Yes, it looks nice, but they wanted us to pay for that. This is not just about the landlord but the provincial law that allows this to happen. They put in a new intercom system. The old one worked fine but they still want us to pay for that. There’s nothing in this law that says if the landlord can afford to pay for it, they should. It shouldn’t fall on the backs of renters,” Orner said.

The West End Journal reached out to CLV Group for comment but did not heard back by press time.

Zuzana Modrovic is a lawyer at the Tenant Resource and Advisory Centre (TRAC), a non-profit organization that provides free legal education, representation, and advocacy on residential tenancy matters, including ARI. Modrovic has noticed an uptick in ARI concerns since the capital expenditures provision was included.

“With ARI-Cs specifically, there is a lot of unfairness baked into the provisions in the regulation. For example, to be eligible for an ARI-C, the expenditure has to be one that was not incurred due to poor or non-existing maintenance on the part of the landlord. This would be good, but the regulation explicitly places the burden on tenants to prove that the expenditure was incurred because of inadequate maintenance. This is practically impossible for tenants to do in most circumstances. Speaking frankly, the provisions in the regulation seem set up for tenants to not be able to defend against these applications, and the policy guideline written to help guide arbitrators in these matters reads like it was written by a landlord lobbyist, to make it as easy as possible for landlords to succeed on any but the most absurd applications,” Modrovic explained.

**Zuzana Modrovic with the Tenant Resource and Advisory Centre (Law Foundation of BC photo)**

Modrovic added it’s quite unfair that the rent increase is permanent. “The landlords get to keep it in place after the expenditure has been ‘compensated’ and it compounds with future annual rent increases and future ARI-Cs. It’s also important to note that there is absolutely nothing in the regulation or policy that allows an arbitrator to take tenants’ circumstances into account. If many tenants face displacement as a result of the ARI-C being granted, that does not even factor into the equation. Over time, ARI-Cs threaten to ‘gentrivict’ tenants by making their homes unaffordable, driving them out of their communities,” Modrovic said.

Steve Orner also takes issue with the fact the ARI is permanent. “This goes on in perpetuity. They claim $500,000 worth of expenses, dividing it equally among all the units and once it’s paid for, you still have to pay for it. It’s a rent raise. Who pays for something when it’s paid for? This doesn’t even happen in a strata – and we don’t even get the advantages of ownership,” he told The West End Journal.

We asked Chandra Herbert why his government made the ARI a permanent rent increase and if an “expiry date” considered?

“People are raising the question about why they’re still paying for something when it’s paid for. And I think that’s a legitimate question because it makes sense for me what people are asking. So, I’m looking at what sort of formula can be created around that. But there are other issues around the process that need a look. But an expiring ARI is one issue that folks have raised with me,” he says.

Steve Orner and his fellow tenants have had four scheduled hearings with the Residential Tenancy Branch (RTB), with no Additional Rent Increases tacked on yet. “They haven’t been approved yet. This seems to be an MO with this landlord. We know this has happened with other buildings. They send a huge package with stuff they know isn’t allowed and try and see if anyone will fight it or move because it’s so scary. A lot of people in a lot of buildings probably don’t know they can do anything about a lot of this stuff. If you fight it at the RTB, they throw a lot of stuff out. The carpeting is not in the package anymore. Painting the hallways is not in there anymore. So now it has gone down from $118 from $78. Now we must go back to RTB and start with this new package.”

Lasse Hvitved also works with B.C. renters at Tenant Resource and Advisory Centre and breaks down some other concerns over ARI capital expenditures:

There is an underlying question of the fairness of allowing landlords to extract compensation for their capital expenditures from tenants to upgrade their own assets in this way, requiring those with less to subsidize the profit margins of those with more.
That the tenants, not the landlord, have to prove that maintenance of the building/system was inadequate, to get the application dismissed. This is a weird system, because the landlord has all the documents related to the maintenance but has an interest in not disclosing them since the tenants cannot prove their case if they don’t get them. This problem can lead to a situation where tenants have to pay for failures and repairs needed due to the landlords poor or negligent maintenance of the property.
Landlords sometimes use the threat of an application to pressure tenants into agreeing to pay a higher rent.
The definitions in the regulation and policy guideline are very broad, leading landlords to attempt to apply for things that clearly should be ineligible, such as fitness room, snow clearing, cost of employee training, and cost of insurance.

In terms of the latter TRAC concern, Spencer Chandra Herbert is hearing about landlords taking unfair advantage of the ARI by citing capital improvements not allowed under the current rules.

**Bay Tower Apartment lobby and vintage mural**

“I’ve seen landlords apply for stuff they shouldn’t get and have the Residential Tenancy Branch (RTB) reject them. Sometimes, throwing whole applications out. I think there was one case where the landlord applied to put a new boiler in and it was clear that the landlord had not done any maintenance - had not taken care of the equipment. So people rightly questioned ‘why do we have to pay for your negligence?’ The RTB agreed and threw that application out,” Chandra Herbert said.

So, is there an abuse of the process happening? Chandra Herbert told TWEJ that’s something he’d like to investigate. “If a landlord is throwing anything at the wall and hoping it sticks, well at some point they’re wasting the RTB’s and tenants’ time. I don’t quite know how to get at that immediately, but it is something we must look at, just like vexatious folks in court. If someone is just trying stuff in bad faith, there ought to be some way to stop that and make them realize it’s not okay,” the West End MLA said.

TWEJ asked Modrovic if TRAC is lobbying the provincial housing ministry for change. “We have raised numerous concerns regarding the ARI-C provisions and policy. At best, we have been ignored, and in some cases, they have made changes that exacerbated existing problems. For example, important definitions in policy have been broadened over time, so things like “major system” or “major component” now are even more vague than they were without the policy. The process has also been accelerated because, it seems, landlords were complaining about delays, so tenants are left with less time to review the often voluminous material from landlords or seek legal assistance,” Modrovic said.

What if you get hit with a long and complicated package from your landlord suggesting a monthly ARI will need to be paid on top of your regular rent? Hvitved, another member of the tenant advisory centre, said it’s key to stay focused.

“Try not to focus on things that are not relevant, like being unable to afford the rent increase or that the legislation is unfair. Focus instead on the issues that can be used to defeat the application under the legislation; landlord has done inadequate maintenance, the replaced system was not at the end of its useful life or the cost was not incurred within 18 months. And of course, contact TRAC for legal information/assistance,” Hvitved said.

Hvitved added that TRAC gets involved “at all levels from brief information over the phone on how to prepare and deal with an ARI-C, all the way to full representation at the hearing doing their case for them.”

Chandra Herbert’s storefront constituency office on Denman Street has also been helping renters manoeuvre through the complex ARI process, which, ironically, his NDP government helped create.

“I’d like to thank West Enders for bringing their stories forward to me. We’ve managed to get a number of ARI requests turned over. If residents just let it slide, they’d be paying a lot more for rent. Because they came to us and said that doesn’t seem fair, we were able to help them out. I also want to thank tenant advocates who are working with renters and coming to me with suggestions for fixes. I also want to thank rental housing providers for keeping their buildings affordable and well maintained. I know one landlord who completely renovated the whole building, kept everyone in their suites and said ‘I want to keep these folks in my building, these are good people and help better the neighbourhood.’ Landlords like that I give a big shout out too, for sure,” Chandra Herbert said.

As far as going to the Residential Tenancy Branch to fight the ARI, Steve Orner says it shouldn’t have to fall on renters like him. “The RTB isn’t equipped for this. I used to manage apartment buildings, doing maintenance for 2,000 units in Colorado Springs. So, do we have to prove or disprove what they say after the fact? There are so many things that are just not true,” he said.

He has this message for other West Enders. “Organize. Let’s get together and fight this. This provincial legislation should not be a thing. If a billion-dollar company is making a profit, shouldn’t they be paying for this type of thing?”

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