A sweeping zoning change under consideration by Victoria council to ensure purpose-built rental buildings remain rental is being met with dismay by landlords and the development community
“This is a non-starter,” said David Hutniak, CEO of Landlord B.C.
“This is a down-zoning. Some of our members call it expropriation.”
Victoria councillors decided Thursday to begin consulting with building owners and the public on plans to apply residential rental tenure zoning to all 500 existing purpose-built rental buildings — containing about 16,000 apartment units — in the city.
If approved, the change would mean only residential rental units would be permitted on the properties — even if they were redeveloped.
It’s a move that’s needed in a city where 61 per cent of residents are renters, said Mayor Lisa Helps.
“We are going to need this amount of rental housing in the city in perpetuity without question. I don’t doubt that. So from that point of view alone, this is a sound direction to go,” Helps said.
But Hutniak said what is being proposed by Victoria is contrary to what the province intended when it gave municipalities authority to designate rental tenure zones last year. And, he said, it devalues the properties.
“These properties have been assessed by B.C. Assessment for many, many years on the basis of highest and best use. We’ve been paying property taxes on the basis of highest and best use. Do you know what highest and best use is for these properties? It’s condos. It’s not purpose-built rentals. So are we going to get a tax rebate for decades back?” Hutniak said.
Coun. Ben Isitt called for a “streamlined” approach to consultation.
“I think recognizing that we’re going to be far from, I think, unanimous support in the community for this approach. So ideally, not consuming too much staff resources, if possible, between now and [when] it comes to a more formal public hearing process would be my preference,” Isitt said.
Helps said Victoria is not alone in moving toward the zoning change, noting Burnaby, New Westminster and Squamish all have made or are planning similar changes.
City staff note that 96 per cent of the 500 rental properties in the city were built prior to 1980.
Most of the older properties are likely in need of significant improvements and thus could be candidates for redevelopment.
Hutniak said the “harsh reality” is that the vast majority of Victoria’s rental stock is old and “beyond its functional life.”
“So we need to look at progressive solutions here — work with the owners of these buildings, work with the developers of rental housing.
“What was contemplated here or discussed in the early stages of this report is a non-starter, frankly,” he said.
Jordan Milne, board chairman of the Urban Development Institute, said the city’s proposal could jeopardize property owners’ ability to get financing to maintain buildings.
He said building owners should be given the opportunity to opt into rental tenancy zoning and provided incentives to do so.
“It’s really difficult to make rental work. You can’t pay the same for land to build rental as you can to build condos.”
Consideration should also be given to using zoning to encourage rental development in areas where the city wants to see rentals built, he said.
“It takes a huge risk out of the process for a rental developer and it levels the playing field for a rental developer when considering buying a site versus a condo developer. [It provides] better certainty, shorter time frame, lower risk and for the city, it really encourages the kind of tenure they want to see,” Milne said.
Milne said the new zoning should “absolutely not” be imposed without the owners’ consent.
City staff have been directed to solicit public feedback through September and October and report to council in November. Rezoning proceedings could then begin if council chooses to go ahead.
Staff say rezoning of the 500 properties could be done in three batches, starting with the oldest properties.