Condo Smarts: Eliminating rental restrictions will increase speculation

Dear Tony: Is it true that the government is going to cancel the ability of strata corporations to enforce any type of rental limitation or restriction bylaws? Our strata is a 50-unit apartment building in Victoria and we permit five rentals. We also have two family rentals to retired owners and one hardship rental.

Our council has few complaints against any of our tenants — we treat them the same as owners, enjoy their residency and do not have any vacant units in our building. This has not always been the case, however.

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Four years ago, we had a tenant who was disruptive, abusive to other residents and the council, and eventually had to be forced out by the strata.

The owner ignored our requests for assistance until we spent almost $5,000 on legal fees and threatened court action. When this was done, our council members were exhausted, the residents were fragile and the strata had exhausted far too much of our hard-earned money.

Who do we call to stop this change?

Janine M.

The information that you have seen relates to Victoria city council, which is asking the province to change the Strata Property Act to remove the ability for strata corporations to enforce and apply rental bylaws.

The act is provincial legislation and local governments cannot override it. At this time, there is no indication that the provincial government will remove rental bylaws from the legislation; however, as with any legislation, if there is enough lobbying and pressure, it is a possibility.

Across the province, there are 30,000-plus strata corporations with all types of bylaws and communities that permit, limit or restrict rentals.

There is no evidence that one type of strata operation is better than the other.

However, there is sound evidence in favour of well-run strata corporations with good communication between the council and residents, a healthy level of funding to ensure prudent maintenance and repairs, and the financial ability and authority to address problems before they become a crisis.

I am bewildered as to why anyone would believe removing rental bylaws is a solution to the rental-housing crisis in B.C. In 2010, the province amended the act to enable developers to adopt a rental exemption that applied to all identified units in a new strata corporation.

It was expected this would make a larger number of strata units available for rentals. What no one expected was the economic-speculation surge that affected real estate.

In 2016, CHOA undertook a detailed assessment of 16 target buildings of 50 units or more in Vancouver to identify if rental bylaws did indeed have an impact on rental availability.

Eight of the buildings were constructed since 2010 with rental exemptions, and eight buildings were pre-2010, six with rental restrictions. The outcome was surprising for everyone.

Buildings without rental restrictions had the highest vacancy rates, between 19 and 35 per cent, and the highest turnover of sales, indicating they were predominantly owned by investors or speculators.

Buildings with rental restrictions were generally owner-occupied, the permitted rentals were full and the vacancy rate was below 2.5 per cent in every case.

One possible conclusion is that this effect is the result of the limit on speculation combined with the age of the rental-restricted buildings. They are generally more affordable, established communities that are well occupied.

I would hope that the legislators seriously consider the impact on housing affordability and exposure to speculation before they consider removing rental bylaws.

For investors, there are many great unrestricted buildings available to enable speculation and use as rental properties.

If you want to voice your opinion to your local MLA, go to leg.bc.ca/learn-about-us/members and send an email.

 

Tony Gioventu is executive director of the Condominium Home Owners Association

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