With BC universities exempt from tenancy rules, students face large rent hikes

Whenever Zareen Ahmed bakes her favourite dessert, the hallways of the University of the Fraser Valley’s on-campus student residence are filled with the aroma of red velvet cupcakes.

“Everyone comes in and we socialize together,” she said. “It’s really nice.”

As an international student, living at Lá:lem te Baker is like having a home away from home for Zareen and many other students.

“The dorm really helped me feel a sense of belonging over here. It’s very safe and spacious and pretty much everything a student might need.”

Even in the summer, the dorms aren’t as empty as one would expect. Zareen has been extending her contract since starting her Business Administration degree in the fall of 2021. There are others like her, too. Some students have even lived on campus for four or five years while working towards their degrees. And last summer, more than one-third of the 203 available beds were occupied.

But the cost to live in student housing is rising. This fall, student housing fees at UFV will increase by 5%, bringing monthly rents at Lá:lem te Baker up to $781.

While the rates for on-campus accommodations are generally lower than current market rates in the Fraser Valley, the 5% rental increase at UFV’s main student residence is more than double the 2% maximum allowable increase for most ongoing residential tenancies in British Columbia this year.

The Government of British Columbia has capped private rental rates for ongoing tenancies at 2% this year due to exceptionally high levels of inflation. The rental caps are meant to help renters with the rising cost of living and are enforceable through the Residential Tenancy Act. But accommodations owned by post-secondary institutions are exempt from the Residential Tenancy Act.

The Residential Tenancy Act outlines the rules and responsibilities that most landlords and their tenants must follow. It also limits the maximum allowable amount that rents can increase each year for ongoing tenancies. Before 2018, the amount was the rate of inflation plus 2%. In the past two decades the maximum allowable amount has never reached 5%.

Landlords can hike rents after a tenant leaves, but for ongoing tenants, any rent increase that goes above the maximum allowable rate is considered unlawful. Private landlords who do not follow the rules are subject to fines.

Universities, though, aren’t subject to the rules. (In previous years, rents at UFV have increased by around 2.25% a year. But starting in September, students will pay around $40 more a month for on-campus accommodations.)

UFV is not alone in raising its rates. Students living on campus at other universities across the province are also facing fee increases for on-campus student housing. Fee increases at other universities range from 2-10%, with UBC raising its fees by 8%.

So in the fall, students living on-campus across BC will face a rent increase that would be considered unlawful if their landlord were not a university.

The Alliance of BC Students opposes any fee increases for student housing that go beyond the amounts set by the Residential Tenancy Act. They also disapprove of the unlimited rental hikes and lack of rental protections that students living on campus are subjected to.

“Students renting on-campus should have the same rights as students renting off-campus,” said Aryanna Chartrand, chairperson of the ABCS. “Decisions made by both government and post-secondary institutions only exacerbate the problem.”

According to the Ministry of Post-Secondary Education and Future Skills, the exemption from tenancy board rules is needed to ensure student rentals are reserved exclusively for post-secondary students. The ministry said the exemption also gives universities the flexibility to offer communal housing options and provide unique student support services and programs, such as the cooking and art programs that Zareen helps coordinate and enjoy as both a community housing ambassador and resident of Lá:lem te Baker.

Student housing is designed to be rented on a shorter term than other rental accommodations, said Andrey Pavlov, a professor of finance and real estate at SFU. He said it is meant to be specifically targeted toward incoming students who may be new to the city or unsure of how to find housing.

“Assuming we have a functioning housing market, most students move off campus and into private arrangements that offer much more choice and flexibility.”

Despite the increase in rental fees at Lá:lem te Baker, Zareen doesn’t see herself moving out anytime soon. She said student housing is still more affordable than other options in the rental market.

But affordability is only part of the issue. The lack of available housing also drives costs up while keeping vacancy rates low. In 2021, the Canadian Mortgage and Housing Corporation reported that Abbotsford’s vacancy rates were at 1.6%. According to Pavlov, a healthy market is 3%.

The chronic undersupply of housing is “entirely an outcome of our policy,” said Pavlov, who blamed strict housing regulations, wait times, and massive delays for the lack of homes.

“Our housing market is so underserved. That obviously translates into students wanting to stay in housing longer because there’s no other option.”

The year-over-year fee increases for on-campus accommodations would be less consequential if not for the BC-wide housing shortage. A housing surplus would drive down rents, and with more available units, and vacancies, tenants would not be so restricted to housing that potentially does not meet their needs.

In a report recommending the fee increase, UFV cited inflation and low vacancy rates as the main reasons for the rental increase. For Lá:lem te Baker to remain financially sustainable, UFV said it must balance the cost of operations and maintenance with increasing rents in the local housing market and the aforementioned rental rates at other post-secondary institutions.

The university said increased revenue would also help with long-term building maintenance, such as upgraded emergency systems and roofing.

In a written statement, the housing ministry said it has urged universities to keep affordability in mind when increasing rents. It said that while times are tough for students, setting rental fees for student housing falls to academic institutions to decide.

The need for fee increases are “a symptom of the general underfunding of the post-secondary system,” said Ashley McDougall, VP-external at UFV’s Student Union Society (SUS). She said the solution is more funding for post-secondary students. That would help relieve financial pressures put on students through increased housing costs and international student fees.

Mackenzy Metcalfe, the executive director for the Canadian Alliance of Student Associations, a federal student advocacy group (of which UFV SUS is a member), said the rising cost of living and rent is a barrier to education for students across the country.

“Inflation places a lot of really restraining factors on a student's budget,” she said. “Rent, groceries, and transportation are some of the most notable increased costs during periods of high inflation like we're in right now.”

Chartrand, from the Alliance of BC Students, agrees.

“Current rental rates are already unaffordable for most students, increases by any measure are unjust and directly contribute to making post-secondary education inaccessible and unaffordable.”