Some West End tenants are facing a 42 per cent rent increase this year, but one housing advocate says he believes the increase may not pass muster in court.
In B.C., rent increases are capped at two per cent plus inflation.
Tenants at a two-storey walkup in English Bay on Harwood Street expected such an increase but last month many were shocked to find their rent would increase between 16 and 43 per cent this year.
Local MLA Spencer Chandra Hebert said the hikes are an example of the geographic increase clause in the Residential Tenancy Act which allows landlords to increase rates if other nearby, similar properties are renting for higher rates.
But Russ Godfrey, a housing advocate who has worked with the Tenant Resource and Advisory Centre and the Residential Tenancy Branch of B.C., said there are legal precedents that favour the tenants.
"It's very difficult to justify [these increases] and in Kelowna and Vancouver, these rent increases were overturned by the Supreme Court of British Columbia."
Godfrey pointed out a 2009 B.C. Supreme Court judicial review where a group of tenants from a property on Pendrell Street in Vancouver successfully fought their landlord when he imposed a similar rental increase, which, in that case, ranged between 15 and 38 percent.
In her ruling, Justice Linda Loo ruled the comparison apartments used by the landlord to justify hiking the rent were not similar enough to satisfy the same geographic area clause.
She sent the matter back to the Residential Tenancy branch and also ordered the landlord to refund his tenants the additional rent increases.
However, Godfrey says the geographic increase clause is probably not the real issue for renters in Vancouver.
The more concerning issue, he explained, is the escalating rental prices created by Vancouver`s extremely low vacancy rate.
He said the tight rental market is inspiring landlords to use the clause to raise rents.
"There's a cynicism going on in the landlord community where you get rid of a sitting tenant who's paying $1,000 per month and we can get $1,200 more for this. What person in business isn't going to try and maximize their profit?"
Property manager responds
Wayne Smithies is the president of Martello Property Services, Ltd, the company that manages the building. He declined to comment on the specific case.
"I cannot discuss private information from my clients with the press," he said.
Smithies wouldn't comment on the geographic tax increase clause. He said the real problem is the City of Vancouver's tax framework.
"The driver for rent increases is tax increases in the City of Vancouver, pushing taxes as high as they can. The rent increases can't keep up with the tax increases," he said.
"We have condos going up on lands where they could have built apartment buildings but they haven't because the city makes so much more tax off condos than they do off of apartment buildings."
The city, in turn, said "most of this increase is seen as a result of an increase in property prices/assessments which the City has no control over as B.C. Assessment is a provincially run organization."
Furthermore, the spokesperson said while the city's budget includes a property tax increase of 3.9 per cent this year, Vancouver has had one of the lowest property tax increases among Lower Mainland communities over the past five years.
The tenants have appealed the rent increase with the Residential Tenancy Branch and have a meeting set for April 18.
With files from The Early Edition
To listen to the interview, click on the link labelled Housing advocate on West End renters facing high rent increase