When developer Hani Lammam looked recently at buying three houses together in East Vancouver for redevelopment into an apartment building, the first question he had was whether the people living in them were owners or tenants.
They were owners. So Mr. Lammam, executive vice-president of Cressey Development Group, kept moving forward with the potential deal.
Vancouver-area developers say they are making similar calculations as city councils are requiring increasingly higher compensation for tenants if a redevelopment – no matter how many new units are added or how reasonable the future rent – is going to displace existing renters.
In Vancouver, several projects have teetered close to being rejected altogether by city council, while others get waved off long before any councillor knows about them.
“It’s one of the first questions from us when someone comes in with an idea: Are there tenants on site and do you know what are the new requirements,” said Dan Garrison, Vancouver’s assistant director of housing policy. “We don’t have numbers, but we are definitely noticing changes.”
If developers needed any more warning signs, a recent controversial proposal in the city’s typically more affordable Marpole area – which proposed to replace an old 43-unit building where some rents were as low as $1,000 a month with a new one of 91 units – was approved by only a 5-4 vote.
That happened after the owner went way past new city requirements to ensure that a housing relocator would find affordable units for low-income tenants moving out, as well as providing up to two years worth of rent for long-term tenants. The owner added a last-minute offer that tenants who wanted to return to the new building would be able to rent at 40 per cent below the market rate. (The city requires only a 20-per-cent discount.)
Burnaby has introduced strict new measures to prevent or mitigate displacement and stringent monitoring, after several years of increasing public alarm about the number of older, low-cost apartments being torn down around Metrotown and replaced by condo towers.
In at least one recent redevelopment proposal, staff called every tenant in an apartment scheduled for demolition to double-check what they had been offered by the builder.
New Westminster and Coquitlam also have stronger displacement-mitigation measures than they used to.
One major Vancouver developer saw which way the wind was blowing several years ago and decided that the company would no longer buy any sites with existing tenants in apartments.
“A few years ago, it was becoming apparent that displacement was an issue and it was, in general, something we didn’t feel comfortable with,” said Tim Grant, a vice-president at PCI Developments, which has built major residential and commercial projects in Vancouver and Surrey recently.
“We feel the way to move forward was creating new supply where it didn’t exist.”
PCI currently has a proposal for a two-tower complex with 212 apartments at the eastern border of Vancouver on Hastings Street under an experimental initiative in Vancouver that allows developers extra density for rental buildings if 20 per cent of the units are rented at defined below-market rates. It’s on a strip with one- and two-storey commercial buildings with no apartments above.
The new wariness about displacing tenants, though, comes with some unintended consequences.
Mr. Lammam said if Cressey moves ahead with buying the three houses in East Vancouver, then he has to decide whether to rent them out during the long wait to get council approval for a new project – and then face the possibility of councillors concerned about displacement voting against it.
“It’s an issue,” he said.
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