The Kitimat Rental Market – Ready? Set. Go!

The Kitimat Rental Market – Ready? Set. Go!

Keeping up with the demand for rental properties is becoming more challenging by the day.

By Sarina St Germaine

What an incredible and exciting time to be living and working in Kitimat!

On March 23 NDP Leader John Horgan publically announced the Canadian Government “is offering a PST exemption for the construction costs on any LNG facilities in an effort to secure a final investment decision from LNG Canada.”

On May 31 it was announced that Petronas Gas intends purchasing a 25 per cent share of LNG Canada. Mr. Horgan’s announcement and the news of the potential Petronas Gas investment has been perceived as a sure sign that LNG Canada will soon announce the FID.

Kitimat is buzzing and alive with anticipation and the act of getting ready for the Final Investment Decision (FID) announcement from LNG Canada.

I compare it to being at the beginning of a foot race – Kitimat is primed, tense and ready to go as soon as soon as someone pulls the trigger to start the race.

Since March there has been a significant increase in consumer interest and sales of residential homes. Houses that have been sitting empty and waiting to sell, some for more than a year, are being snatched up faster than you can say “Go LNG Canada!”

Keeping up with the demand for rental properties is becoming more challenging by the day.

This is all fantastic news for Kitimat, in general, but as a community, there are some key things we need to keep in mind, especially when it comes to the housing rental market.

The District of Kitimat and its residents are already seeing financial gains with respect to Mr. Horgan and Petronas Gas’ announcement over the past few months.

However, until LNG Canada makes an official announcement with respect to the FID, let us be reminded there are human beings and growing lives that will be affected by the short and long-term financial decisions made in the next few months.

Kitimat experienced an immediate and severe growth in population during Rio Tinto’s Kitimat Modernization Project (KMP), which wrapped up not even three years ago. During the start of the expansion project, many rental property owners evicted those tenants that were paying low monthly rent amounts in order to make the spaces available for the influx of workers and their families and of course, to drastically increase monthly rental fees.

With the pending LNG Canada FID announcement on the horizon, this means that property owners can rent their properties for whatever dollar amount the consumer market can tolerate.

Now, before people start crying “greedy landlords!” please recognize that revenue properties are a business.

It is natural for business owners to want to take advantage of an influx of consumer demand. It is what makes the financial world go round, so to speak.

When KMP wrapped up and the employees and their families left Kitimat, many revenue property owners had to spend a substantial amount of money on repairs, maintenance and cleaning just to be able to make their properties rentable again.

By the time the needed services were complete, everyone had left town and monthly rental fees plummeted in value.

For example, a three bedroom, one level home was renting for $1,500 per month or more during the expansion project. That same home was renting for $900 a month, or less, over the past three years. Many rental property owners have been paying money out of their own income or savings to top up the monthly mortgage payment or run the risk of leaving the property empty for long periods of time.

The looming LNG Canada FID announcement means that rental property owners can now increase rents and hopefully recoup some of the financial losses suffered over the past couple of years.

This does not mean that rental property owners can start handing out eviction notices, left, right and center so that they can dramatically increase monthly rental fees. There are now strict laws that govern how a property owner can take back use of the property for sale or to rent or to perform renovations, repairs or upgrades.

The protection of tenants’ rights has been in the media spotlight lately as cities such as Vancouver try to sort out its dilemma of having too many people needing a home to rent and a serious lack of affordable housing.

The high demand for housing is causing property owners to wrongfully evict tenants and increase rental rates to incomprehensible amounts.

The swift and brutal effects of the evictions during the expansion projects saw many low income- and senior tenants struggling to find new and affordable housing.

Those effects are still being felt to this day and many tenants are still going through the arbitration process to fight for financial compensation for being wrongfully evicted and displaced from their homes.

On December 11, 2017, the Landlord and Tenant Act’s Residential Tenancy Agreement underwent a key change to protect tenants from being wrongfully evicted in order for property owners to increase profits.

A further change to the Act on March 17, 2018, now carries potential financial penalties for property owners who do not abide by the new Notice to Vacate regulations.

Before issuing any notices to a Tenant to vacate a rental unit, please consult the BC Government Website under “Residential Tenancies – Giving Notice”, visit any Service BC location for advice on the forms and proper process for serving eviction notices, contact The Residential Tenancy Act at 1-800-665-8779 or consult with a licensed Property Manager.

Kitimat has learned valuable lessons in the past and this time and is ready to protect and serve the residents that helped build this community and who will continue to support Kitimat’s future financial growth after the projects are complete.

As the Grasshopper and the Ant fable teaches us, there is a lot to be said for being prepared.

The activity level in Kitimat across all business sectors such as real estate, construction, trades and retail sales has visibly increased.

People can feel the excitement and are kicking into high gear to be ready at a moment’s notice.Fire that start pistol, LNG Canada! Kitimat is ready to sprint.

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