14, & \ li f&a Division Manager Director CAO The Corporation of THE CITY OF NORTH VANCOUVER COMMUNITY DEVELOPMENT DEPARTMENT REPORT To: From: SUBJECT: Mayor Darrell R. Mussatto and Members of Council Wendy Tse, Planner 1 ENHANCED NOTICE AND ASSISTANCE OPTIONS FOR TENANT DISPLACEMENT Date: April 15, 2015 File No: 5040-08-01 The following is a suggested recommendation only. Please refer to Council Minutes for adopted resolution. RECOMMENDATION: PURSUANT to the report of the Planner 1, dated April 15, 2015, entitled "Enhanced Notice and Assistance Options for Tenant Displacement": THAT Council direct staff to further explore enhanced notice and assistance for rental tenants who are displaced through the redevelopment of existing rental buildings as outlined in Option 2; THAT staff be directed to consult rental housing stakeholder groups in the City of North Vancouver to obtain feedback on the selected policy options; AND THAT staff incorporate stakeholder feedback into an updated Policy and report back to Council. ATTACHMENTS: 1. Market Rental Projects in the City since 2000 Page 1 of 11 Document: 1261281-v1
PURPOSE: To seek Council direction on options to enhance notice and assistance to renters who are displaced through the redevelopment of existing purpose-built rental buildings. The option selected by Council would be presented to various rental housing stakeholders groups, Including rental building owners, renters and housing advocacy groups, for comment prior to reporting back to Council with an updated policy. BACKGROUND: The City is currently experiencing renewed interest in market rental development (Figure #1). Current market factors, including low interest rates, low vacancy rates and high ownership prices, and City initiatives are creating favourable conditions for rental housing development as demand for quality rental options grow. With the assistance of density bonusing, new market rental units are being constructed in the City (Attachment #1) and contributing to the renewal of the City's aging rental stock. Figure #1 - Number of Constructed Market Rental Units by Decade Source: Statistics Canada (2006) and City of North Vancouver (2015) 4,000 3,500 3,669 3,000 ~j 2,441 2,500 2,000 1 1,500 1,028 1,000 I 500 146 114 I 18 45 0 0 24 0 0 JP 0 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2015 351 units in process The age of the City's purpose-built rental stock and the limited in-suite and on-site amenities provided in older rental buildings has meant more affordable rents for these units. As such, these buildings are home to many of the City's most economically and socially vulnerable residents. While some of the recent rental developments in the City have been constructed on vacant properties or properties with no existing rental housing, other projects involve the demolition of existing rental buildings, resulting in the displacement of tenants. The limited supply of affordable rental options, coupled with the City's low vacancy rates (Figure #2), means that some displaced residents may not Page 2 of 11 Document: 1261281-vl
be able to find suitable alternate accommodations in their preferred neighbourhoods, or even in the City. Figure #2 - Average Purpose-Built Apartment Vacancy Rates Source: Canada Mortgage and Housing Corporation (2014) 3 2.7 2,5 ST 2 OJ A healthy and balanced vacancy rate is commonly defined as 3% ^ 1.5 >- 1 > 0.8 0.5 1 1.2 0.9 0.9 0.7 0.5 0.3 0. 1.1 0.8 0.9 0.5,0.5 0 C& (.O 0 ^ rss 3 rsp ^ r& rs^ ^ ^ v Council concern for the protection of displaced rental tenants resulted in the endorsement of the following resolution on February 23, 2015: WHEREAS the availability of reasonably priced rental units is being reduced as a result of redevelopment of existing, older rental three and four storey apartment buildings; and WHEREAS this is particularly challenging for residents facing displacement and requiring lower priced accommodation, who are often faced with the prospect of uprooting families, and possibly having to leave their familiar neighbourhoods, or even move from the City of North Vancouver; and WHEREAS the Provincial Government has limited the ability of municipalities to impose requirements on rental apartment owners serving tenants with eviction notices; and WHEREAS the City will be preparing a Housing Action Plan in accordance with the Metro Regional Growth Strategy; Page 3 of 11 Document: 1261281-v1
THEREFORE BE IT RESOLVED THAT City staff report on possible options available to the City for enhancing notice and assistance to tenants being displaced as a result of redevelopment of existing rental apartments; AND FURTHER THAT City staff include a Council workshop on the Housing Action Plan and how this Plan will help address the affordability of housing alternatives in the future. This report responds to Council's request and presents policy options to assist rental tenants who are forced to move as a result of redevelopment. A separate report providing an update on the City's Housing Action Plan, including the date of the Council workshop, is forthcoming. DISCUSSION: Market vs. Non-Market Rental The options presented in this report apply only to tenants displaced from market rental housing, also termed purpose-built rental housing. Market rental units are residential units owned and leased by private owners and charged rents that reflect what a tenant is willing to pay in a competitive and open market. Therefore, while the older market rental buildings may offer some of the most affordable rents in the City, there is no requirement for these units to be rented at anything less than market rates. In comparison, non-market rental housing is owned and operated by a non-profit housing provider and leased at rents that are significantly less than what may be charged in the open market. Government funding and supports are often involved to help subsidize this type of housing. The proposed tenant relocation policy options are not applicable to non-market tenants. Jurisdiction over Rental Tenancies In British Columbia, residential tenancy requirements and tenant-landlord relations are governed by the provincial government through the Residential Tenancy Act (RTA). The RTA states that a landlord must serve a tenant with two month's notice when the landlord plans to do major construction. Major construction is defined as the demolition of the rental unit or doing major renovations that require the building or rental unit to be empty for the work to be done. In addition to providing two months' notice, a landlord must give a tenant equivalent of one month's rent if the landlord ends the tenancy for the landlord's use of the property, including redevelopment. A landlord must have all required permits and approvals prior to issuing notice. Page 4 of 11 Document: 1261281-v1
The notification period for a landlord requesting to demolish a rental building and rebuild in accordance with the City's Zoning Bylaw is two months' notice and one month's rent, as per the RTA. Council may not request additional notice or assistance beyond the RTA in this instance. In fact, the City repealed Demolition Notification Bylaw No. 6140 in 2011 to ensure consistency with the RTA after reference to a municipality having the ability to establish its own notice period was removed in 2006 when the RTA was amended. Demolition Notification Bylaw No. 6140 required tenants of buildings containing three or more residential units be given a six month notice period for evictions. Enhanced notice and assistance for displaced tenants may be requested for development applications seeking Council approval. Current City practice supports this approach as reflected by the past voluntary tenant relocation strategies submitted by developers seeking redevelopment of existing rental buildings (Table #1). All of the voluntary tenant relocation strategies received to date have exceeded the notice or compensation requirements in the RTA. Table #1 - Voluntary Tenant Relocation Strategies Submitted at Rezoning Free Moving Relocation First Right Address Notice Rent Expenses Assistance of Refusal 161-165 E. Keith Rd 12-unit apartment to 41-unit rental + 52-unit strata building 4 months + progress reports 1 month Free van, Person to assist in boxes + driver finding new unit (3-dav period) No 141-147 E. 21 st St 34-units in two buildings to 107-unit rental building 3 months (if l-year lease) 2 months (if tenant 3+ years) Yes, reimburse with receipts Existing staff+ management Same rents (retracted at Council) 1549 St. George's Ave Renovation of 16-unit rental building + 13 new rental units 3 months 1 month No Opportunity to rent at other properties of same owner Yes, not necessarily same rent 377 E. 2 nd St 2 months 1 month Equivalent to 1 No No 5-unit apartment to 7-unit month's rent townhouse + 2 lock-off suites Tenant Relocation Policies in Metro Vancouver New market rental development is occurring throughout Metro Vancouver and some municipalities have adopted policies of varying breadth and scope to address the issue of tenant displacement. For example, the City of Vancouver requires a tenant relocation plan to be submitted to its Development Permit Board (DPB) for any development application for a multiple dwelling consisting of six or more dwelling units that includes the demolition or change of use or occupancy of a rental housing unit. A list with the name of each tenant, the Page 5 of 11 Document: 1261281-vl
number of the tenant's unit, and the rent the tenant pays is required, as well as a relocation plan that provides each tenant with two month's free rent, reimbursement of receipted moving expenses, and the first right of refusal to re-locate into a replacement rental unit or another form of affordable housing. Vancouver further outlines in its Sample Tenant Relocation Plan that property owners compensate tenants residing in the building for more than 10 years with an additional month's rent, that a designated tenant relocation manager help tenants find three comparable rent units in Vancouver at no more than 10 percent above current rent levels, and that returning tenants start at market rents with a 20 percent discount. The DPB considers the tenant relocation plan when reviewing the development application, in addition to considering the opinions of existing tenants, who would be displaced if the development is approved. The City of New Westminster has adopted the Secured Market Rental Housing Policy. Under this Policy, where demolition of purpose-built rental housing occurs through a rezoning process, the developer must provide a plan to replace the rental units and to provide appropriate relocation assistance to tenants. The Policy does not specify the type of assistance to be provided, but notes that the expectation is that the landlord would exceed the minimum requirements in the RTA in terms of providing notice to tenants (minimum of two months) and compensation (one month's rent). The City of Coquitlam, through its Transit Oriented Development Strategy, requires redevelopment proposals involving sites with purpose-built rental housing in the Burquitlam Station Area to submit a Rental Housing Strategy. This Strategy must provide an assessment of existing on-site conditions, including the number of units, bedroom mix, and tenancy characteristics. The developer must further propose options for replacing the existing units, whether on-site or off-site, as well as the process for relocating existing renters and the financial assistance options to be provided. A strategy for managing communications and relations between the developer and existing renters is also required, with a housing consultant to lead this process. A summary of tenant relocation policies from the above Metro Vancouver municipalities is summarized in Table #2. While municipalities are developing policies to protect vulnerable residents who are displaced through redevelopment, a comprehensive change to the BC RTA could enable greater and more consistent protection of renters across the province. For example, the Ontario Residential Tenancies Act requires a notice period of 120 days (four months) for repairs/renovations and demolition. In addition, for properties with five or more units that are to be renovated, a landlord must provide another rental unit acceptable to the tenant during the period of construction or give the tenant an amount equal to three month's rent. The tenant also has the right to move back into the unit when the repairs or renovations are complete. If a landlord intends to demolish the rental unit, the same requirements of another rental unit or three month's rent also applies if the property has five or more units. Page 6 of 11 Document: 1261281 -v1
Table #2 - Summary of Tenant Relocation Policies from Other Municipalities Vancouver Rate of Change Guidelines Notice 2 months (same as RTA) Free Rent 2 months (3 months if reside in building 10+years) New Westminster Must Must Secured Market Rental exceed exceed Housing Policy RTA RTA Coquitlam Transit Oriented Developm ent Strategy (Burquitlam Station Area Only) Moving Expenses Reimbursed with receipts Relocation Assistance Tenant Relocation Coordinatorto find 3 comparable units, with rent no more than 10 above current rent, unless agreed to by tenant Min. RTA Min. RTA Applicant to propose options for relocating existing renters and financial assistance Strategy for managing communications, led by housing consultant First Right of Refusal Displaced tenants have first right of refusal for new units rented at 20% below market value Current Occupancy Assessment Name of each tenant, number of the tenant's unit, and rent tenant pays Number of units, bedroom mix, tenancy characteristics Options for Consideration The following options are provided for Council consideration in support of City renters who are displaced through the redevelopment of existing purpose-built rental buildings. Please note that the options below are only applicable for development applications that require Council approval. Option #1 - Uphold RTA Requirements and Request Additional Assistance This option requires property owners to uphold the current RTA requirement of two months' notice and one month's rent, and requests property owners provide additional assistance to existing tenants on a voluntary basis. This option recognizes the Province's jurisdiction on the matter of rental tenancies. This option may not result in enhanced notice and assistance to existing tenants, but it also will not impose a financial burden on rental property owners. Considering the age of the City' rental housing stock, Council may not want to impose a potential barrier on rental redevelopment. While this option does not require enhanced notice unless voluntarily provided by the property owner, the City's rezoning process does inherently provide existing tenants with a longer notification period. A typical rezoning application takes six to eight months to process and requires notification to be provided to the public, including on-site Date; April 15, 2015 Page 7 of 11 Document: 1261281-v1
signage advertising of public input opportunities and mail-out notification regarding the Public Hearing. In addition, it is only after Council approves the rezoning application that the owner may obtain the required approvals to serve notice to tenants. That said, tenants may not fully comprehend the implications of the rezoning application and standard rezoning notification requirements do not provide specific information to renters, such as their rights as a tenant under the RTA. Option #2 - Require Enhanced Notice and Assistance for Existing Tenants (RECOMMENDED) This option recognizes that many vulnerable City residents live in older purpose-built rental buildings and would require property owners to provide enhanced notice and assistance to existing tenants, including the following: a) Current Occupancy Summary Property owners must provide to the City an assessment report that includes the following: - Number of occupied and vacant units; - Start of tenancy for each tenant; - Rent for each unit; - Size of each unit; and - Number of bedrooms in each unit. b) Three Months' Notice Property owners must provide tenants with three months' notice, as opposed to two months' notice as per the RTA, once all required permits and approvals are obtained. c) Tenant Communication Plan Property owners must submit a Tenant Communication Plan at rezoning, which outlines when and how tenants will be contacted throughout the development application process. The Tenant Communication Plan requires proactive engagement and notification to tenants, including monthly update reports, written notification of input opportunities, notifications posted in conspicuous places in the building, and information on resources available to tenants (e.g. Tenant Resource & Advisory Centre). d) Three Months' Rent Property owners must provide all tenants residing in the building for a minimum of one year (based on the start of a tenancy to the date of the rezoning application) a total of three months' rent. The additional two months' rent above the RTA requirement will assist tenants in finding alternate accommodations, as well as compensate for moving expenses. Page 8 of 11 Document: 1261281 -v1
e) Tenant Relocation Coordinator Property owners must designate a Tenant Relocation Coordinator to aid tenants in finding suitable alternate accommodations. The Coordinator is required to find up to three comparable rental units in the City at rents no more than 10 percent above existing rents for each tenant, unless the terms are changed by the tenant in writing. The Coordinator must keep track of all units found and provide a status report to the City prior to issuance of a Demolition Permit. f) First Right of Refusal Property owners must offer the first right of refusal in the new building to tenants who were displaced. The particulars of the unit, including rent amount, unit size and number of bedrooms, will be negotiated between the property owner and individual tenants. The Tenant Relocation Coordinator will have to submit a report to the City identifying the tenants who want to return to the building prior to issuance of a Certificate of Occupancy. The above measures are anticipated to help mitigate some of the stress and disruption caused by displacement, although the loss of social networks for individual tenants may still occur. Rental property owners will find certain measures onerous and costly; however, the market rents charged for the new units will help offset some of the expenses related to this option. In addition, the market will adjust to take these costs into consideration, if Council decides to move in this direction. Option #3 - Negotiated Enhanced Notice and Assistance This option represents current City practice where voluntary tenant relocation measures are negotiated at rezoning. The City has typically secured tenant relocation plans that have either exceed the RTA notice or assistance requirement (Table #1). While this option has been successful to date, it results in an in consistent approach to enhanced notice and assistance secured for each application. This provides less assurance to City renters. In addition, the negotiated process may take additional time and rental housing owners have indicated that clarity is important in the development process. Page 9 of 11 Document: 1261281-v1
A summary of the three options are provided in Table #3. Table #3 - Summary of Enhanced Notice and Assistance Options Notice Free Rent Moving Expenses Relocation Assistance First Right of Refusal Option #1 Uphold RTA Requirements and Request Additional Assistance Two Months' (as per RTA) One Month (as per RTA) Voluntary Voluntary Voluntary Option #2 Required Enhanced Notice and Assistance for Existing Tenants (Recommended) Three Months' Three Months' Included in Three Months' free rent Tenant Relocation Coordinatorto find 3 comparable units in City at rents no more than 10 percent above current rent Required Option #3 Negotiated Enhanced Notice and Assistance Min. Two Months' Min. One Month's Negotiated Negotiated Negotiated Consultation and Next Steps Staff will consult a variety of rental housing stakeholder groups to obtain feedback on the option selected by Council. The stakeholder groups to be consulted include, but are not limited to, the following: Rental building owners Renters Community Housing Action Committee Tenant Resource & Advisory Centre Advisory Planning Commission Social Planning Advisory Committee The Advisory Planning Commission reviewed an earlier draft of the enhanced notice and assistance options on April 8, 2015 and was supportive of the general direction of the policy options. The Commission recommended consideration of the length of tenancy required to qualify for benefits and the role of the third-party Tenant Relocation Coordinator, which have both been incorporated into the options presented in this report. Page 10 of 11 Document: 1261281-vl
The feedback received from stakeholders will be incorporated into an updated policy for Council consideration at a later date. FINANCIAL IMPLICATIONS: Nil. INTER-DEPARTMENTAL IMPLICATIONS: This report was reviewed and by the Civic Projects Team on April 21 st, 2015. SUSTAINABILITY COMMENTS: The protection of City renters through policies on enhanced notice and assistance supports the City's commitment to social sustainability. The City has historically had more renters than homeowners, and while this has changed with increased strata residential development, renters still account for 46 percent of the City's population. Renters are an important part of the City's social fabric and policies to support renters through displacement will better allow these individuals to remain in the City. The policies outlined in this report also address the economic sustainability of the City as City renters are an important part of the City's workforce. CORPORATE PLAN AND/OR POLICY IMPLICATIONS: A guiding principle of the 2014 Official Community Plan (OCP) is Community Supporting Community, which means the City will continue to be a compassionate community recognizing that all individuals and/or their families will require support at some point in their lives. RESPECTFULLY SUBMITTED: Wendy Tse Planner 1 Attachments WT:skj Page 11 of 11 Document: 1261281-v1
> sr o rr 3 <D 3 RECENT MARKET RENTAL PROJECTS IN THE CITY (SINCE 2000) Source: City of North Vancouver YEAR NUMBER OF UNITS ADDRESS NOTES (NET GAIN) CONSTRUCTED 2001 121 East 12th Street 16 2001 135 West 15th Street 108 Supportive Seniors Housing ("The Summerhill") 2004 133 West 23rd Street 4 2004 132 East 20th Street 13 18-unit apartment, but existing 5-unit apartment demolished 2010 201 West 1st Street 27 2010 1629 St. George's Avenue 11 11 units added to existing 11 -unit apartment (22 units total) 2011 1835 Lonsdale Avenue 3 UNDER CONSTRUCTION 2011 213 West 1st Street 55 2012 131 East 3rd Street 18 BUILDING PERMIT RECEIVED 2014 175 West 14th Street 81 130-unit rental apartment building; 49 existing rental units demolished REZONING APPLICATION RECEIVED (APPROVED) 2013 161-165 East Keith Road 29 41 rental units secured in 93-unit building; existing 12-unit apartment demolished 2014 141-147 East 21st Street 73 107-unit apartment; existing apartments with 34-units demolished 2014 1549 St. George's Avenue 16 16 units added to existing 13 unit apartment (29 units total)