By Michal Rozworski and Derrick O’Keefe
This Tuesday (December 4), Vancouver city council has a chance to help close down a predatory market in our city: the market for renovictions.
This is a market where entire apartment buildings sell for tens of millions of dollars based on the implicit assumption of mass evictions, a market where human lives are at stake. It is also market that would not have sprung up without legal loopholes, lax enforcement, and weak regulations.
A renoviction happens when landlords use renovations as a pretext for getting rid of tenants. Most renovations, aside from the most major, don’t require displacing tenants and thanks to a Supreme Court decision from April, tenants have the right to temporarily move out and keep their lease even when vacating a suite is necessary.
However, our governments are currently unwilling to proactively enforce these laws and provide information to tenants, who often face threats from new landlords operating on the assumption that they will be able to throw everyone out and start fresh—at significantly higher rents.
What’s more, B.C.’s current system of rent control provides incentives for this kind of predatory behaviour by landlords. That’s because the rent control that we do have, which now caps annual rent increases at the rate of inflation, is tied to the tenant and not the unit. If you can get your tenant to move out, you can raise rents to whatever the market will bear. In other words, our current system creates bad landlords by incentivizing pushing out current tenants.
At the very first meeting of the new Vancouver city council, COPE councillor Jean Swanson put forward a motion to effectively ban renovictions. The motion calls for: expansion of Vancouver’s tenant relocation and protection program so that it applies to all parts of the city, enforcement of rules that allow tenants to move out temporarily during renovations without breaking their lease, and the tracking of apartment building sales and buyout offers. Further, the motion calls on the city to urge the provincial government to implement vacancy control (rent control tied to the unit). That final provision is timely, as the B.C. government is expected to announce the results and recommendations of it Rental Housing Task Force this month.
Meanwhile, the ease with which tenants can be evicted has allowed property values to skyrocket. The prospect of evicting entire buildings of tenants and dramatically raising rents boosts property values in the anticipation of large future rent increases. Renovictions drive speculation. They ultimately make rent less affordable for all tenants.
Despite its pernicious effects, the burgeoning renoviction industry is not a conspiracy conducted behind closed doors. It advertises in plain sight. The Goodman Report, the go-to source for Vancouver landlords, has recently featured many listings for rental buildings laced with big doses of wink-wink, nudge-nudge. One advertised that “rents are significantly under market, providing investors an opportunity to further enhance the revenue by completing a comprehensive renovation plan as suites turnover”. Others entice buyers: “rental upside that can be realized on suite turnover” or a “great opportunity for an investor to complete a renovation program”.
Predictably then, the landlord and developer lobbies have responded to even the rather modest proposed reforms with indignation and fear-mongering. Landlord BC CEO David Hutniak, in a letter to city council, went so far as to claim that vacancy control “would spell the end of new purpose-built rental construction in BC”.
These claims, however, fail upon a sober assessment of the situation in Vancouver. The reality is that there is no single market for rental housing. The market for building new units is different than the market for buying and selling existing apartment buildings.Today’s sky-high market rents in Vancouver already provide a big incentive for the construction of new units and landlords always get to set initial rents. Finally, it’s worth noting that other Canadian provinces that have had vacancy control, for example, have not seen a sudden halt to rental construction.
On the other hand, weak tenant protections, weak enforcement and rent control not tied to the unit have created a market for companies that specialize in renovictions. VS Rentals, which has recently been in the news for its attempted renovictions from New Westminster to Vancouver, is one such company. With the market for renovictions closed off, the renoviction specialists among landlords would not be bidding up prices for existing buildings, which would mean lower prices for good landlords and lower rents for tenants.
Recent publicity has even forced VS to say its planning to change their business model. Our suspicion is that this is less a mea culpa and more a deflection to outflank stricter regulations like the proposed motion.
In the current climate, both new units, and increasingly also older units, aren’t affordable for the majority of working people. Landlords sometimes complain that spiralling property values raise property taxes and inflate land values making it uneconomical for them to construct or maintain affordable rental. If that’s the case, then they should wholeheartedly embrace a ban on renovictions along the lines proposed by Councilor Swanson.
Real rent control—tied to the unit—is one measure that would begin to solve two problems. It would provide security for tenants, for working people living in fear of being pushed out of the city on short notice, and it would limit speculation in buildings and land values by limiting potential future rent increases.
Shutting down the most predatory housing market for renoviction specialists is just one initial step towards making housing more affordable for the majority in Vancouver. The same way that bad policy can create predatory, speculative housing markets that profit a tiny minority, good policy can create space for plentiful, truly affordable housing.
To that end, we need massive public investment in nonmarket housing. The city should use every available strategy: build on existing public land, approach the province and the federal government for funds, reinvigorate the co-op housing sector, and build cross-subsidized housing for a range of working-class incomes. It should also tax spiralling housing and land wealth more aggressively and more progressively. This will both create funds for building nonmarket housing and make land more affordable for anyone who wants to build more affordable housing, public or private.
There are other tools like rental-only zoning, which the province has given all municipalities the power to implement and which some, like Burnaby next door, are already using. As the Canadian Centre for Policy Alternatives noted in its submission to the Rental Housing Task Force, “construction of new rental stock is likely more influenced by zoning rules than by factors such as rent control”. Alongside plentiful nonmarket housing, the city can create and regulate the space for more affordable market housing—rather than allow continued incentives for predatory behaviour.
The changes Jean Swanson’s motion on renovictions calls for are very targeted. And yet the fate of this motion has big implications, and will serve to signal whether politicians that promised to do more to protect renters in Vancouver will live up to their word. Tuesday’s vote will also signal whether this multiparty group of elected representatives is serious about targeting speculation and profiteering to help alleviate this housing emergency.
During the election campaign, it was heartening to see so many parties and candidates talking about housing as a human right and not a commodity. On Tuesday, they need to walk that talk and vote to stop renovictions in Vancouver.