The Mayor is proposing a ground-breaking deal to preserve rental accommodation along the Broadway corridor.
The draft plan includes compensation for tenants affected by redevelopment, including the right-of-first-refusal to move into the new building at a 20 per cent discount to citywide average market rents. Developers would also need to pay to move the tenant to temporary accommodation while the new building is under construction, and top up their interim rents during that period. …
… instead of a 20 per cent discount off average rents, tenants could move into a unit in the new building at the same rent they paid before the property was redeveloped.
Tenants could also choose not to move into the new building, and instead opt for a cash payment from the developer, based on their length of tenure. For newer tenants now paying high rents, Stewart says his proposal could mean they actually pay lower rents in the new building.
“The bottom line is that no renter along Broadway will see their rents go up due to redevelopment,” Stewart said.
Actually, the bottom line that counts is the one on the developer’s pro forma that determines whether the project would be profitable. If not, no project, no demolition and no new housing. What’s critical, then, is the amount of additional density to make it all pencil, and the willingness of the tenants to sign on.
And they may be very willing indeed.
If I understand the proposal correctly, current tenants in a three-storey walk-up near, say, Granville and Broadway, are being offered the deal of a lifetime.
Regardless of income, renters would be able to return to brand-new buildings in great locations short distances from SkyTrain at rents 20 percent below the city-wide average, or potentially even less. And then their annual rent increases would be limited by provincial regulation. What was initially a sweet-heart deal at the beginning would be unbelievably advantageous as years go by.
Or they could go for a big whack of dough just to move on.
But why should this just be limited to those in the Broadway Corridor? Surely this would be the new bar for renters everywhere whenever new development is proposed – leading to an interesting consequence when trying to calculate a declining city-wide average rent.
More interestingly, why would the development community want to go along with this? Perhaps because it would be the biggest incentive to speed up massive redevelopment of whole neighbourhoods we haven’t seen since the 1950s. And those lobbying for the transformation would be the renters themselves, knowing they could get a deal unlike any they’re likely to see again in their lifetimes.
Indeed, the smart ones would want to get in as early as possible, pressuring Council to approve developments quickly with minimum constraints – and with a density bonus sufficient to make the projects come in profitably, perhaps more so than in other neighbourhoods in the city.
The Mayor’s proposal would indeed be ground-breaking. Literally.
The 20% below CMHC avg rents (more like 50% off economic rent for a new build) is literally a “publicly funded gift” worth hundreds of thousands of $ conferred upon existing tenants for simply holding a lease that could be otherwise terminated for redevelopment under the current RTA. No means testing.
Does that seem right? Requiring deeper subsidies (bigger “gifts”) will either crush already marginal rental viability or it will require even taller towers. At the end of the day, the people paying for the largesse of local government will be the new tenants who pay full market rates.
We need REASONABLE and FAIR tenant relocation and rights of first refusal. The current proposal before council fails these tests and will only make it that much more difficult to finance new rental redevelopment.
There are cities with true affordability. They have thirty to sixty percent publicly owned housing. Obviously this amounts to a large taxpayer subsidy. That subsidy needs to be balanced against the benefits.
Unless you want a Manhattan or Monte Carlo, the benefits of a large amount of public housing are huge. For a start, it allows an economically and demographically diverse population, essential for building the healthiest societies. Having local workers being able to afford to live locally has obvious benefits, reducing the number of commuters, reducing traffic, freeing up parking, increasing local use of transit and bike lanes.
The biggest benefits are in strengthening the local economy and community to the benefit of all. A family earning perhaps $100,000 per year, paying a means tested rent of $24,000 per year, will have more money to spend in the local economy. They will be better able to provide much needed patronage to local businesses, financially supporting the tax base and local jobs. A win win for all.
You can argue against a subsidy, the problem you face with me is that in Canada and most countries the full list of subsidies to everyone and everything is rather long. We subsidize babies and seniors, yak farmers on central Vancouver island and multinational energy companies.
Everyone needs food, clothing shelter and transportation. A society that has widely available means tested housing is offering as close to a universal hand up, as opposed to a hand out as you can get.
The price of land, and the profit required for financing makes the private sector a limited player in the provision of affordable housing. Vancouver lost 6,000 residents last year, the affordability crisis has never been worse. We need proven solutions, on a large scale.
Good summary!
But is it fair to other residents of Vancouver t o give special deal to a few?
Again the law of unintended consequences.
Gordon wrote: “And then their annual rent increases would be limited by provincial regulation. What was initially a sweet-heart deal at the beginning would be unbelievable advantageous as years go by.”
But developers can be tricky. Read this article:
https://bc.ctvnews.ca/vancouver-renters-allege-developer-broke-a-promise-to-let-them-return-at-the-same-rent-1.4794378
KEY EXCERPT “Gray and his neighbours understood that to mean that when they moved back, they would sign a lease for the same rent they had been paying before they moved (in Gray’s case, $1,091 a month), and after two years, their landlord could raise the rent by the roughly two per cent per year currently allowed by B.C.’s rent laws.
But in December, they received another document from Reliance. This one said the arrangement would actually involve signing a lease at the market rent – for Gray, $2,350 for a one-bedroom – and then getting a monthly rebate for $1,112. At the end of the two years, Gray and his husband would pay the full market rate of $2,350 – a 90 per cent increase, and a rate that would take up around 50 per cent of their combined income.”
It pays residents to shut up and get on board with the inevitable. People complain because the city won’t “do anything”. Well, this is doing something. Worth every penny.