The iconic Villa Maris, known locally as the 'Pink Palace,' in West Vancouver on Dec. 12, 2023.Tijana Martin/The Globe and Mail
Five years ago, British Columbia gave local governments the ability to protect rental buildings through the creation of preserved rental zones. The legislation was intended to protect renters from the upheaval of displacement if the owners decided to replace their homes with pricey condo buildings.
Although the creation of rental zones would seem to be a no-brainer, so far it hasn’t been a straightforward process.
Six months after it was enacted, New Westminster took advantage of the new law with its own bylaw and changed the zoning for six condominium buildings to rental-only buildings. The “strata” properties, as they are known in B.C., were individually owned units that had been used as rentals since they were built back in the 1970s, but with a hot housing market, they were being marketed as owner-occupier condos.
The City of New Westminster acted to protect these secondary rental tenants from eviction and became the first city to use the residential rental tenure zoning for that purpose. The older buildings offered more affordable housing than new market-rate rental buildings, partly because of rent controls over the years.
As a result, the owners of the condos could no longer live in the units and had to keep renting them out. An owner already living in their unit at the time the rental-only zoning was passed, however, could stay living there.
Not surprisingly, the owners filed a petition that challenged the bylaw. In May, 2023, the court ruled in favour of the City of New Westminster. It was a pivotal legal win that had “broad-ranging implications for other municipalities,” the city’s website says, confirming the zoning could be used to protect secondary rental units, as well as purpose-built rental units.
West Vancouver is proposing a rental zone to protect their old rental buildings and the Villa Maris is among the main targets.Tijana Martin/The Globe and Mail
New Westminster was the test case, and the City of West Vancouver was paying attention. The city has 30 older rental buildings close to the waterfront at risk of redevelopment – including some famous pink and blue modernist mid-rises, built in the 1960s. The distinctive 11-storey towers at 2222 Bellevue and 2190 Bellevue had been owned by one family for 50 years but are reportedly in need of work. Starlight Investments purchased the two buildings. Prior to the purchase, the previous owner had submitted a development plan to replace the blue mid-rise with a 21-storey, 230-unit rental building with a separate six-storey infill rental building. Starlight has yet to submit its own plans for the buildings.
The waterfront “Pink Palace,” as it is fondly known, is a West Vancouver icon, with spectacular ocean views. Consultant Michael Geller, who is representing the company, says the property will be kept as rental, but they are seeking flexibility on future infill development that could be either rental or condo.
The purpose-built rental buildings are in a highly coveted location, and they are also filled with seniors on fixed incomes who’ve been living in them for many years. There are 1,600 units between the buildings, which are pretty much all of the municipality’s rental stock, and a lot of it is highly affordable. West Vancouver staff had put forward a recommendation to protect all 30 buildings with rental-only zoning as part of a local area plan for the Ambleside neighbourhood, which would rule out condo development. But the majority of councillors rejected the idea in November. Some cited concerns that without the option to build condos, there wouldn’t be enough economic incentive to maintain the buildings. They wanted to consult with owners and consider rental and strata within one building.
“We were waiting to see what happened to New Westminster and they were dragged through court and won pretty decisively, so no more court cases – it’s a fact we can use this legislation, and that’s why this has come forward,” says councillor Nora Gambioli, who had voted in favour of the rental-only zone.
As is, owners can redevelop their rental buildings into condos without approval, and that needs to be addressed, she says.
“This was supposed to be the easy, no-brainer, first baby steps for the Ambleside local area plan, and it wasn’t. I’m super disappointed.
“We had dozens of e-mails from people saying, ‘Yeah, you have to save these properties, protect them,’ and we had two e-mails from developer owners and that was enough to swing the vote.”
Mayor Mark Sager said that the council hasn’t given up on trying to address the issue of potential displacement, and they are looking at infill options on a couple of the larger properties. He said that developers had not pressured the council to reject a rental-only zone.
“The people who own the rental stock in West Vancouver have been long-term owners in large part. I don’t see any of them rushing in to do renovictions. We don’t have that issue in West Vancouver, so the question is, how do we preserve the affordable rentals we have now, and ensure the people living there aren’t facing upheaval?
“The concerns [for council] were, how is anyone going to be incentivized to replace or maintain older buildings?” he added. “We are going to have to be a bit creative here.”
As is, the current floor space density that is allowed doesn’t make financial sense for developers, he says.
“It just comes down to what is the permitted density on that, and right now nobody is going to build anything at that [density]. There is no economics in that. The cost of construction is too high.”
Developer Jason Turcotte, president of North Vancouver’s Darwin Properties, said that with the elimination of GST on rental construction, rental has become more enticing to developers.
“Today’s comparison is nearly a coin toss, arguably closer than ever,” he says.
But it also depends on the developer, the site and the market, he added.
As Ms. Gambioli points out, a waterfront condo in desirable West Vancouver could easily sell for $3-million.
The City of Vancouver also considered the rental-only legislation but ultimately decided its policies were good enough, says Dan Garrison, director of housing policy and regulation.
“The City reviewed the use of rental-only zoning to protect existing apartment areas, but we found that the existing [rental housing stock policy] was already doing an adequate job of protecting existing rental in those areas,” he wrote in an e-mail.
The policy requires one-for-one replacement of any rental units that are lost to redevelopment. They have to be in purpose-built rental buildings of three or more units in specific apartment zones, applicable to about 54,000 units. It operates as a disincentive for redevelopment and protects affordable older stock, Mr. Garrison said.
“The replacement requirement under the [policy] has the effect of protecting existing rental housing in apartment areas.”
Two years ago, the city also passed new zoning to allow four- to six-storey rental buildings on arterial streets and side streets, near shops and transit. Mr. Garrison said they’ve received 33 applications for nearly 2,600 rental homes since February, 2022, and more than 2,000 have been approved.
The Villa Maris sits directly on the ocean above the sea wall.Tijana Martin/The Globe and Mail
There are also informally designated rental areas, says former City of Vancouver co-director of planning Larry Beasley, whose consulting firm is working for Low Tide Properties and PCI Developments on mixed-use projects along Great Northern Way. The industrial area is home to postsecondary campuses and a Millennium SkyTrain station and will soon have a Broadway subway station. He’s working on what is known as the “creative district,” between Main Street and Clark Drive, and developers are proposing several rental housing projects, he says. Rental housing is “more palatable” in the area, he says, because it’s protected as a working industrial zone. Condos would only drive up land prices. As such, he sees the area as having the potential for considerable affordable housing.
He envisions 20- or 25-storey rental towers along Clark Drive, for example. However, city policy to protect industrial areas is proving an outdated obstacle, Mr. Beasley says.
He also doesn’t believe affordable housing should only be rental. Co-op housing and rent-to-own programs should be a key part of government policy.
“I’m not a person who’d say all future housing has to be rental. Young people want the opportunity for home ownership, too. That’s why I like non-profit home ownership, where you work with a developer, you pay rent and build equity, and in five years you have enough to buy the unit.”
Editor’s note: A previous version of this article incorrectly stated that Starlight Investments had submitted a development plan for the buildings. This version has been updated.
Kerry Gold