What BC Rental Owners Should Know About Rent Control and Affordability in 2026

Rent control continues to be one of the most debated housing policies in Canada, especially in British Columbia, where rising costs, limited supply, and growing demand create pressure on both owners and tenants. As we move into 2026, discussions around affordability are intensifying, and rental owners are trying to understand how these policies impact their investment.

While rent control aims to protect tenants from sudden rent increases, the long‑term effects on supply, housing quality, and tenant mobility are more complex. As property managers working closely with both owners and renters, we see those impacts every day.

This post breaks down what owners in BC should know and how to prepare for the landscape ahead.

What the Research Says About Rent Control

The 2025 CMHC report, Rent Control: What the Academic Literature Says, reviews academic studies from North America and Europe and offers a balanced summary of how rent control affects housing markets. The evidence suggests that while rent control can provide stability and affordability for current tenants, it also tends to:

• Discourage new purpose‑built construction
• Decrease tenant mobility
• Lower overall housing quality over time
• Reduce available rental supply

These findings echo decades of economic research, including Canadian studies by other housing‑economics organizations and municipal housing reports.

BC’s own rent control framework, limiting annual rent increases to a government-set formula, its within this international context. It offers protection for existing tenants but can create financial pressure for landlords whose costs are rising faster than regulated rent levels.

BC’s Rent Control Framework

As of May 2025, the BC government announced that the maximum allowable rent increase for 2026 will be capped at 2.3%. This figure is based on the 12-month average inflation rate but does not permit landlords to “catch up” on years with lower allowable increases.

This cap continues a trend of holding rent increases below inflation, which has been in place since 2018. While it helps protect tenants from rent shocks, it creates financial challenges for owners—especially in areas where operating costs are rising faster than 2.3%.

For example, home insurance premiums in BC have been increasing steadily, with recent industry data showing 5–10% annual increases for many policyholders. In high-risk regions or buildings with older infrastructure, renewal increases of 15–25% have been reported, particularly for properties near wildfire zones or with elevated rebuild costs. (Insurely, Business in Vancouver)

At the same time, strata fees, property taxes, and utility costs are trending upward—meaning landlords must find ways to manage tighter margins. Since rents cannot increase faster than the provincial cap, it’s essential to:

• Set initial market rents carefully at turnover
• Monitor expense trends and forecast over a 3–5 year horizon
• Prioritize preventative maintenance to avoid large, unexpected capital outlays

The 2.3% cap (in 2026) applies only to existing tenancies. Landlords may still set rent at market rate for new tenancies, but once a tenant moves in, future increases are tightly controlled. This emphasizes the importance of setting initial rents appropriately and maintaining strong documentation and communication when issuing legal rent increase notices.

Impacts on Supply, Rents, and Market Dynamics

The CMHC review points out that rent control systems often reduce the profitability of new rental construction. This discourages private investment and can push developers toward condominium builds instead of purpose-built rentals. In a low-vacancy market like Metro Vancouver (1.2% as of the latest CMHC data), this limits supply and puts upward pressure on asking rents for non-controlled units.

Owners of older buildings, particularly those with long-term tenants paying below-market rents, may find it difficult to keep up with operating costs—especially with rising insurance premiums, strata fees, and utility costs.

Additionally, turnover becomes the only time landlords can reset rents to market value. This leads some owners to prefer tenant turnover, while others focus on long-term retention and cost control. Either way, careful planning is essential to remain profitable.

Effects on Tenant Mobility and Housing Quality

The CMHC report notes that rent control significantly reduces tenant mobility. Tenants are more likely to remain in units for long periods, even if their housing needs change, simply because they cannot afford to lose their current rent level.

This creates inefficiencies in the rental market:

• Units may be underused (e.g., single tenants in large units)
• Young families or new arrivals have fewer options
• Landlords lose the opportunity to adjust rents in line with market value
• Older buildings can deteriorate if revenue doesn’t keep up with maintenance needs

Research shows that in rent-controlled jurisdictions without supplemental subsidies or reinvestment incentives, housing quality tends to decline over time. BC owners should be vigilant about preventative maintenance and long-term capital planning to avoid costly deterioration.

Social Welfare, Economics, and the Bigger Picture

From a social welfare perspective, rent control provides predictable, stable housing for long‑term tenants—and that is meaningful. But the CMHC analysis emphasizes that rent control alone does not create affordability. It must be paired with:

• Increased supply
• Incentives for purpose‑built rentals
• Targeted subsidies for low‑income tenants
• Policies that support high‑quality, professionally managed housing

Economists broadly agree: when rent control is used as the primary affordability tool without supply support, long‑term negative effects accumulate. When combined with supply‑focused strategies, it can play a balanced role.

For BC owners, this means navigating a system that aims to protect tenants while sometimes placing financial strain on providers of the housing itself. In BC, some programs support rental development and upgrades, but the broader regulatory landscape makes it challenging to respond quickly to demand. Owners should stay informed about upcoming changes, grants, or exemptions that may provide some relief or strategic advantage.

What BC Owners Should Do Going Into 2026

1. Plan for Operating Costs Conservatively
Annual rent increases often will not fully offset rising insurance, strata fees, property taxes, and maintenance. Owners should forecast costs 3–5 years ahead.

2. Conduct Regular Maintenance and Inspections
Avoiding deferred repairs is critical under rent control. It’s easier and cheaper to maintain than to replace.

3. Keep Detailed Financial and Property Records
Maintaining records is important for tax purposes and may become relevant if future exemptions for capital improvements are introduced.

4. Benchmark Rents Annually
Understand how far your rents are from market levels. If a tenant eventually vacates, you should be ready to adjust appropriately.

5. Consider Professional Management
Rent‑controlled environments require careful budgeting and long-term planning. Property managers like Maximum Inc. have in-depth local knowledge and are able to help owners optimize operations, maintain compliance, and protect their investment's value.

In conclusion, BC rental owners are navigating one of the most regulated housing markets in Canada. Rent control offers predictability for tenants but presents financial and operational challenges for owners. The CMHC’s 2025 literature review confirms what many in the industry experience daily: rent control alone doesn’t solve affordability and can lead to unintended consequences without complementary supply-side policies.

The property management team at Maximum Inc. are capable of mitigating these effects and ensuring your rental property remains profitable and complaint heading into 2026. Get in touch with one of our agents today so that we can start helping you navigate changes you may need for the upcoming year.