The City needs to take responsibility for its role in the rental housing crisis

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Last week, Vision Vancouver city councilor Geoff Meggs wrote an opinion piece for The Tyee claiming that City Hall is taking bold steps to address the rental housing crisis.

These claims are difficult to accept given that the situation for renters in Vancouver has worsened since the election of Gregor Robertson in 2008. Rents have increased steadily, by 15% over the past four years.

Since 2008, the number of low-income households in Vancouver has decreased by 18%. This is not because wages are increasing, but rather because service sector workers and their jobs have been forced out of the city.

Similarly, public school enrolment has been decreasing steadily at 2% per year, even though private school enrolment hasn’t increased. According to the Vancouver School Board, the main reason families are leaving is that they can no longer afford the cost-of-living. As school funding is tied to the number of students, this has a devastating impact on the school board budget. The Vancouver School Board is now locked into a perpetual crisis of cut-backs, layoffs, and school closures.

The impacts of Meggs’ high-cost market rental buildings

The costs of the affordability crisis are widely acknowledged, and the effects are felt by renters every day. But the reality that our affordable housing stock is being eroded under Vision Vancouver needs to be placed front-and-centre. For years Meggs has argued that only the free market can bring housing affordability. Not only are the market rental units championed by Meggs high-cost (a discussion of the cost of new market housing was published in today’s Tyee), but each new development will have have a net negative effect on the affordable neighbourhoods they are part of. This is for a simple reason: the glaring loophole in the Residential Tenancy Act (RTA).

The RTA allows landlords to apply for an extra-ordinary rent increase, over and above inflation plus two percent. The exemption applies if “the rent for the rental unit is significantly lower than the rent payable for other rental units that are similar to, and in the same geographic area as, the rental unit,” according to section 23(1) (a) of the RTA. As a result, tenants in gentrifying areas are being evicted. Last February the landlords of seniors living in a subsidized housing project in Mount Pleasant applied for a 45% rent increase, submitting as “evidence” the higher rent in a new building across the street. The seniors formed a tenant union and had to fight tooth-and-nail against the 45% rent increase that would have forced many of them out. This month the same thing is happening to Chinese seniors in Chinatown.

Past councils have implemented “rate-of-change bylaws” that limit the number of rental units legally converted to condominiums in a given area. But this council has not taken any action to improve the bylaw by ensuring that affordability is protected, nor have they used their numerous available tools for controlling the housing market. The result of Meggs’ “Secured Market Rental Program” is that for each new expensive rental unit built in a neighbourhood, one unit of affordable rental housing is freed up for conversion to condominium.

Dwindling affordable housing stock

Vision’s role in undermining the affordable housing supply is systematic. The recent uptick in the number of high-cost market rental units has been more than negatively offset by housing lost to demolition, upscaling, and conversion.

The number of housing demolitions reached 1,034 in 2012 alone. The City has also now shown that it has the power to postpone the issuance of demolition permits at the Waldorf Hotel and Hollywood theatre, but no strategy to stop the demolition of affordable rental buildings is in place. No new measures have been put in place to ensure that all other options have been exhausted before demolition.

Meanwhile, the loss of affordable units due to upscaling and conversions has been off the charts. With City Hall’s permitting office acting as enablers, a wave of reno-victions is sweeping throughout the rental neighbourhoods in Mount Pleasant, Commercial Drive, West End and other neighbourhoods targeted by new “community plans.”

Even the special “SRA” bylaw that protects single-room occupancy rooms against condo conversions has been rendered practically useless under Vision. Activists in the Downtown Eastside have kept a close watch on the changes in their neighbourhood. The Carnegie Community Action Project, for example, has taken yearly surveys of the number of units of welfare-rate units available for rent in the DTES. This past year, they documented the loss of over 400 units. Statistics aren’t compiled for other neighbourhoods, but average rent increases across the board suggest that this is happening everywhere.

Tenants are squeezed

Evidence of dwindling affordable housing supply is reflected in Vancouver’s vacancy rate, which has remained dangerously low at 1% in 2012 – far below the 5% that economists consider “normal.” Around the world, municipal ordinances make strong rent control measures kick in once the vacancy rate dips below 5%. In Vancouver, lip service has replaced actual policy solutions.

Vision has not taken steps to protect tenant security, which is an integral component of rent control. The Provincial government currently allows annual rent increases at inflation plus two percent. By any standard this is a “weak” rent stabilization program that has the net effect of setting a standard of rent increases greater than inflation. Worse still, BC’s legislation contains an incentive for eviction: if the landlord evicts the tenant, then the rent can be raised without limit. In the rent control world this system – called “vacancy decontrol” – has been shown to unleash waves of evictions from New York to San Francisco.

The city could stop these evictions in their tracks because the most common landlord justification for ending tenancies is that the unit must be vacated for the purposes of renovations. But the landlord requires a city-issued permit to conduct the eviction-causing renovations. The city could simply place a requirement on the permit that the tenant be given the right to return to the apartment after the renovations without any extraordinary rent increase. That simple measure would stop most reno-victions immediately.

Vision knows very well that it could take such simple measures, but refuses. The most common justification for inaction used by the City is to claim that municipal governments are not legally allowed to place such conditions on renovation permits. However, case law shows that the city has legal room to ensure that landlords are not using renovations as a means to evict. In the landmark BC Supreme Court case Berry and Kloet v. British Columbia (2007), Justice Williamson ruled that renovations cannot be used by landlords as “a means for evicting tenants … Where it is possible to carry out renovations without ending the tenancy, there is no need to [end the tenancy].”

While Vision is not inclined to take bold legal action on behalf of renters, they have boldly gone forward with bylaw amendments to fine homeless people $10,000 for sleeping on the streets or for protesting on the street or sidewalk without a permit. Legal challenges have been launched against these laws, and the city is spending thousands to litigate for these unjust – and likely unconstitutional – laws in court. The city is also litigating to give tax breaks to developers for market units. Currently, provincial legislation says that the city can only give tax breaks on units that are “social housing.”

What should be done instead?

Vision is unlikely to admit that they have any responsibility for the housing crisis, and will continue to blame senior levels of government at every turn. The problem is that the party is funded primarily by the real-estate development industry, whose interests are to keep housing costs high and to keep the supply of affordable housing constrained. Until Vancouver manages to reign in campaign contributions from big corporations, we will be see nothing but lip service to the housing crisis while conditions for renters will continue to get worse.

To protect affordable rental housing, the city could stop channeling high-end market rental and condominiums into neighbourhoods with the largest concentrations of affordable housing. Through its powers of zoning, the city can and should decide where market housing is developed. The city should also use its administrative and permitting powers to protect tenant security and refuse to issue renovation permits unless the landlord can guarantee that tenants will be allowed to return to the new unit without an extraordinary rent increase.

To increase vacancy rates and reduce declining public school enrolment, the city needs to declare a housing crisis and take truly bold action, such as using its land-use powers to build thousands of units of public housing per year. Finally, the City of Vancouver currently operates a public housing corporation that has remained dormant under Vision’s two terms, but which could be given renewed powers and access to revenues.