Seniors fight 45% rent increase at Lions Manor, building owner gives interview to The Mainlander

Three dozen seniors living on fixed incomes in the Lions Manor building at 6th and Main have been served with a 45% rent increase. In a city with an ever-worsening housing crisis, the tenants could be faced with the possibility of having nowhere to go.

The Mount Pleasant Housing Society (MPHS), a non-profit organization set up by the Mount Pleasant Lions Club, has applied to the Residential Tenancy Branch for permission to exceed the annual rent-increase limit by more than ten times, arguing that rents at Lions Manor are below market value. In reality, the 36 residents of Lions Manor already pay between 35-45% of their income on rent, which is higher than the one-third cut-off rate defined by the City of Vancouver as affordable.*

The rent-increase hearing is scheduled for today (February 10) at the Residential Tenancy Branch. The hearing will take place by phone, adding even more anonymity to the fact that the building owners have not yet met face-to-face with the seniors to discuss the increase. Despite pressure to revoke their application, including a rally outside the Lions Manor yesterday, the Mount Pleasant Housing Society has confirmed that it will pursue the rent increase as planned.

In an extensive conversation with The Mainlander, Mount Pleasant Housing Society president Christine Norman confirmed that if the hearing comes down in favor of the tenants, her organization will appeal the decision. “We will do whatever we have to do to win the case,” said Norman by phone.

Rents have already increased within the allowable legal limit for at least the past two consecutive years at the Lions Manor. This year, however, the owners are seeking a special exemption from the Residential Tenancy Act (RTA) beyond its allowable yearly limit of inflation-plus-two-percent. Under Section 23(1)(a), the geographic area loophole of the RTA, the Mount Pleasant Housing Society is applying for an additional 45% rent increase. The section reads:

A landlord may apply under section 43 (3) of the Act [additional rent increase] if one or more of the following apply: (a) after the rent increase allowed under section 22 [annual rent increase], 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.

This loophole puts all renters in gentrifying areas at risk. The neighborhood surrounding Lions Manor is part of what the Vancouver planning department calls the Main Street revitalization corridor, stretching from Alexander Street south to 36th Avenue. The advancement of the condo frontier up Main Street has widened the rent gap between the ground rent and highest-best use capitalized rent, increasing the return on capital in the area. As such, market rents bear no reflection of the actual costs of tenancy but rather of the opportunity cost of capital. The Residential Tenancy Act exists to protect renters from the most exploitative aspects of the housing market, but Section 23(1)(a) cancels out the very purpose of the Act.

MPHS states that it needs a 45% revenue increase to funds its renovations, although Norman would not speak further for fear of “jeopardizing” her case before the Residential Tenancy hearing. According to Norman, the building should have been repaired 10 years ago. Balconies were left to decay by the Lion’s Club and only repaired when they became a safety hazard.

Mayor calls on development industry to eliminate affordable housing

Two weeks after Vancouver was once again named one of the most unaffordable cities in the world, Mayor Gregor Robertson has unilaterally appointed the members of the city’s “Blue Ribbon Affordability Task Force.” The fourteen appointees of the task force are drawn from a list of prominent developers, landlord lobbyists, architects, and industry insiders. There is not one person on the task force to represent renters, who are the most negatively affected by the housing crisis, and who represent 55% of the city’s population.

The task force was first announced in the Mayor’s opening speech after the re-election of Vision Vancouver in November 2011. Since November, the Mayor has been laying the groundwork and ‘terms of reference’ for the task force. The most important term-of-reference outlines how the city will carry out the privatization of Vancouver’s social housing stock, its demolition, and subsequent sale to private partners. While initially the idea was made in vague reference to “leveraging the city’s land base to help create partnerships with private and public bodies,” the Mayor has recently made it clear what the city has planned:

We’re looking at opportunities to leverage City land. Vancouver has a huge portfolio of land and buildings that we need to get highest and best use out of…What can we do with our existing public housing stock to maximize the opportunity?

The announcement of a “task force” recalls the city’s “affordable rental housing roundtable” process in 2009. In the wake of the financial crash of 2008, developers, financiers, and other stakeholders were invited to a series of workshops in the spring of 2009. The result: a report recommending tax breaks for developers in order to “incentivize” the development of rental housing. The policy that emerged was STIR, which the Mayor referred to as an “economic stimulus” for the hard-done-by development industry. Unsurprisingly, the balance sheet of the past three years shows that the tax-breaks-for-developers housing strategy delivered few rental units and literally zero affordable units of housing. It did deliver generous campaign donations from the development industry to Vision Vancouver.

Vancouver’s Head Planner ousted by mounting pressure from developers

Vancouver’s 6-year Director of Planning has been fired by city council. In lieu of a normal transition process, the city has fired Toderian without an immediate replacement. While it is not clear why Toderian was fired, the abrupt decision came after a period of heightened tension with prominent developers, including disagreements with Holborn Group at Little Mountain and Wall Financial Corp at Shannon Mews.

At a press conference today the Mayor stated that Toderian’s dismissal was prompted by the need for “new leadership to deal with new challenges facing the city, especially around housing affordability and economic development.” Rather than focusing on Toderian’s conflicts with developers, Robertson and the city stated that a new planning director should be capable of “balancing competing demands” between affordability on the one hand and market development on the other.

City hall insiders, however, were less vague than Roberston. Bob Ransford emphasized that Toderian “had a hard time with the necessary political skills needed to keep developers on your side.” Michael Geller also acknowledged that Toderian was “unpopular with many developers.” Mike Klassen was even more direct: “Let’s be clear about why Brent is leaving the City of Vancouver now. First, the development community by in large didn’t support him.” This analysis by Vancouver’s three “in-house” right-wing commentators was echoed by a fourth right-wing perspective, from Jeff Lee.

Lee pointed to the development community’s ongoing refusal to pay normal development taxes. According to Lee, Toderian was fired because he was “responsible for enforcing a controversial ‘community amenity contribution’ (CAC) program.” Far from being controversial, the CAC program is a simple tax placed on private developers in exchange for community amenities like daycare, recreation centers and artist studios. While Lee would give the impression that CAC’s are onerous and dig into “the bulk of profits,” the small CACs have virtually no impact on the developers’15 – 20% minimum profit rate.

For the past few years, Toderian and the planning department have also been butting heads with development corporations over the normal taxation on market development with respect to the land zoning process. In Vancouver, land-value is tied to the amount of development allowed on a site, which city planners term the Floor Space Ratio (FSR). When the FSR is increased, it most frequently means that the allowable building height has been increased, therefore the process is called “upzoning” or “land lift.” Upzoning automatically increases the value of the land commodity, but as with most things at city hall, the developer is not required to pay the full value of its commodity: on average, developers are required to pay 75 – 80% of the upzoned value. Sometimes this amounts to millions of dollars of free money if the land has been purchase prior to rezoning.

CUPE attempts to phase out COPE

In a report to the Coalition of Progressive Electors (COPE) members this weekend, Canadian Union of Public Employees (CUPE) representative Bill Pegler delivered a strong statement of support for Vancouver’s newly-elected city council. Despite COPE losing all of its council and parks board seats, and all but one school board seat, CUPE has declared the November elections a victory. “For CUPE, the 2011 elections were a success,” Pegler said to a crowd of 100 COPE members gathered at the Hastings Community Centre to debrief the 2011 Vancouver civic election. “The overall goals of CUPE have been met.”

Because COPE accepts few corporate donations, the party relies on unions for the vast majority of its funding. In the 2008 civic election, 80% of COPE’s $350,000 in campaign contributions came from unions, including a full 50% from CUPE locals alone. At the other side of the equation, Vision has identified CUPE as an important piece of the puzzle for electoral success in Vancouver, both in terms of financial donations (CUPE donates more to Vision than to COPE), and in terms of Vision’s ability to secure control over the COPE Executive via its financial donors.

Pegler’s comments send a strong signal to Vision that they should continue the electoral alliance with COPE to keep “the party of renters” in the position of being alive but without seats on council. The comments also signaled to COPE that in order to survive within their current funding structure, COPE volunteers must continue working to elect representatives of CUPE’s preferred party.

While CUPE donates heavily to Vision Vancouver, the majority of Vision’s funding comes from developers. This is due to the fact that city council’s biggest job is to regulate land use — and therefore property values and rents. Under Vision, the city will remain steadfastly right-wing on these core issues, with the result that Vancouverites — including CUPE members — will spend more and more of their incomes on sky-rocketing rents and land values. By considering Vision’s victory a success, CUPE is making the choice to neglect the key issues of affordability, housing security, and public transportation.