Thirteen single-room occupancy landlords in Vancouver have launched a class-action lawsuit against the City of Vancouver, alleging that its vacancy control policy amounts to “de facto expropriation.” The legal battle has reignited a fiery debate over the role of vacancy control in addressing British Columbia’s worsening housing crisis.
In November 2024, SRO landlords from Strathcona, Chinatown, and neighbouring areas escalated their grievances to the B.C. Supreme Court. Represented by the law firm Lawson Lundell LLP, the landlords argue that Vancouver’s vacancy control policy—a measure requiring rents in SRO units to remain static between tenants—violates property rights, erodes rental income, and diminishes property values. The plaintiffs, which include the owners of the Pender Lodge and the Keefer Apartments, claim they are being forced to operate at a loss while government-subsidized housing faces no such constraints.
The case underscores a growing tension between policymakers’ attempts to stabilize housing costs for vulnerable tenants and landlords’ ability to maintain viable operations. With affordable housing stock dwindling and rents surging, vacancy control has emerged as both a lifeline for low-income tenants and a lightning rod for controversy.
Caught in the Crossfire of Housing Crisis
Vacancy control, introduced earlier this year, ties allowable rent increases to the rental unit rather than the tenant. Designed to prevent rent hikes between tenancies, the policy aims to preserve affordability in Vancouver’s shrinking pool of SRO units. Often described as housing of last resort, these rooms cater to individuals on low incomes who are at risk of homelessness.
For tenants, vacancy control provides crucial protection. Over the past four years, the number of SRO units in Vancouver has dropped 23 percent, a decline driven by fires, redevelopment, and aging infrastructure. The average rent for an SRO in the Downtown Core rose 21 percent between 2019 and 2023, pricing out many of the city’s most vulnerable residents. Vacancy control seeks to curb this erosion by ensuring SRO rooms remain affordable, particularly for tenants reliant on income assistance.
However, landlords contend that the policy imposes an unfair burden on private operators. The lawsuit argues that vacancy control limits their revenue generation, leading to maintenance backlogs, difficulties securing insurance, and plummeting property values. Critics also warn that such measures may accelerate the loss of private SRO stock, as landlords exit the market entirely or redevelop properties into higher-end housing.
Who Should Bear the Burden of Affordability?
A key argument in the vacancy control debate centres on the disparity between public and private housing operators. Landlords, like Peter Thanas of Pender Lodge, contend that private SRO owners are being unfairly saddled with the responsibility of providing affordable housing while public operators enjoy subsidies and financial protections. This dual system, they argue, creates an uneven playing field that discourages private investment and accelerates the decline of affordable housing stock.
For decades, the City of Vancouver has expressed interest in acquiring SRO properties to convert them into public housing. While this could stabilize rents and improve conditions, critics note that the city’s existing housing stock is also strained. Publicly owned SROs require significant maintenance funding and operational resources, raising questions about whether municipalities can effectively absorb more units without additional provincial or federal support.
This tension reveals a broader philosophical divide: should housing affordability be a collective responsibility shared by governments, or should private landlords be incentivized to fill the gap?
Landlords vs. Tenants
The legal battle pits two narratives against each other: the plight of low-income renters versus the struggles of private landlords. Both sides present compelling arguments, highlighting the complexity of the vacancy control debate.
For tenants, the stakes are existential. Without vacancy control, landlords can significantly raise rents between tenancies, a practice that often leads to evictions and homelessness. This so-called “profit-driven displacement” disproportionately affects marginalized groups, including Indigenous and racialized tenants, who already face systemic barriers to housing. Tenant advocates argue that vacancy control is essential to curb these predatory practices and stabilize communities.
Landlords, however, paint a different picture. They claim that policies like vacancy control penalize private operators while ignoring the structural issues driving the housing crisis. Many point to government-subsidized housing projects, which operate with generous funding and face no such restrictions. They argue that forcing private landlords to shoulder the cost of affordability is unsustainable and unfair.
A Legal Battle That Could Reshape Housing Policy
The class-action lawsuit filed by SRO landlords is more than a clash over vacancy control—it’s a potential turning point in B.C.’s housing policy. If the courts side with the landlords, it could curtail municipalities’ ability to regulate rents, undermining local governments’ efforts to stabilize housing markets.
Conversely, if the courts uphold vacancy control, it could embolden other cities to pursue similar measures. Advocates see this as an opportunity to address a growing power imbalance between tenants and landlords, particularly in areas where housing affordability is in freefall.
This case also raises constitutional questions about property rights and the limits of municipal authority. As the courts deliberate, housing advocates and industry stakeholders alike will be watching closely, knowing that the decision could set a precedent for years to come.
British Columbia is not alone in facing a housing affordability crisis. Berlin’s recent experiment with a rent cap faced legal challenges similar to those in Vancouver, ultimately overturned on constitutional grounds.
The Crisis in SRO Housing
The battle over vacancy control highlights deeper issues within Vancouver’s SRO system. For decades, SRO units have served as a vital safety net, providing shelter to individuals who would otherwise face homelessness. Yet the system is buckling under the weight of neglect and escalating demand.
In 2003, Vancouver had 1,700 privately owned SRO rooms renting at the shelter rate of $375 per month. By 2023, that number had dwindled to just 52. Rising operational costs, outdated infrastructure, and a lack of government support have left many landlords unable to sustain affordable rents.
At the heart of the SRO crisis is the phenomenon of displacement—a cascade of events that begins with rising rents and ends with homelessness. The disappearance of affordable SRO units has a direct impact on the most vulnerable populations, forcing many into shelters, tent encampments, or the streets.
Studies show that profit-driven displacement disproportionately affects marginalized groups, particularly Indigenous, racialized, and disabled individuals. For these communities, losing an affordable unit often means losing access to essential services concentrated in urban cores, such as health care, social programs, and community support networks.
Meanwhile, tenants living in SRO units face deteriorating conditions. Aging buildings, inadequate maintenance, and lacking amenities have turned many properties into unsafe and unsanitary environments. Advocacy groups argue that vacancy control, while imperfect, is necessary to slow the tide of displacement and preserve what little affordable housing remains.
Despite their challenges, SROs have untapped potential. Strategic investment could revitalize these buildings and provide safe, dignified, and affordable housing. Renovation grants, energy efficiency subsidies, and tax incentives could breathe new life into this critical housing stock, ensuring it continues to serve as a safety net for those in need.
Vacancy Control in B.C.’s Housing Crisis
The vacancy control debate is part of a broader housing crisis gripping British Columbia. The province leads Canada in rental price increases, with rents rising 30 percent between 2016 and 2021. More than 105,000 households spend over half their income on housing, a threshold that puts them at extreme risk of homelessness.
B.C.’s housing crisis is rooted in decades of underinvestment in affordable housing. From the 1970s to the 1980s, governments funded nearly 40 percent of housing completions, but this support has dwindled in subsequent decades. Without sufficient supply, the province has relied on market-driven solutions that often fail to meet the needs of low-income renters.
While vacancy control aims to address affordability, critics warn it cannot succeed without complementary measures to increase housing supply. Without incentives for landlords to maintain and expand affordable units, policies like vacancy control risk becoming stopgap solutions rather than systemic fixes.
Balance Between Tenant Protections and Growth
As the legal battle unfolds, it’s clear that vacancy control alone cannot solve B.C.’s housing crisis. A balanced approach is needed—one that protects renters while encouraging investment in affordable housing.
Governments must step up with targeted funding and incentives to preserve and expand SRO housing. Programs that provide tax breaks, grants, or low-interest loans for landlords willing to maintain affordability could alleviate the financial strain on private operators.
Additionally, stronger tenant protections are essential. Reforms to eviction laws could curb profit-driven displacement, while improved oversight of rent increases could prevent abuse. These measures would stabilize communities without alienating landlords.
Finally, a renewed commitment to public housing is critical. Expanding government-subsidized housing stock can provide long-term stability for low-income tenants, reducing the reliance on private operators to fill the gap.
A Tipping Point for Vancouver’s Housing Future
The lawsuit against Vancouver’s vacancy control policy underscores the complexities of balancing tenant protections with market realities. As the courts weigh the merits of the case, the outcome could set a precedent for housing policy across British Columbia.
For now, the fight over vacancy control reveals a deeper truth: the need for bold, coordinated action to address the systemic roots of B.C.’s housing crisis. Only by combining tenant protections, landlord incentives, and public investment can the province hope to achieve lasting change.
With lives and livelihoods at stake, the time for half-measures has passed. British Columbia’s leaders must confront this crisis head-on, or risk deepening the divide between renters and landlords in an already fractured housing market.
Denise is a long-time advocate for affordable and dignified housing in the Downtown Eastside. Having lived in SROs and volunteered in homeless shelters, she brings a personal understanding of the housing crisis and its impact on the community. Her work reflects years of lived experience, frontline work, and commitment to creating better living conditions for DTES residents.
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