Downtown Eastside co-op rents are on the rise

Tenants in the Lore Krill co-ops in the Downtown Eastside face rent hikes of between 10 and 41 percent.

    1 of 2 2 of 2

      Last month, Suzanne Baustad received her first raise in seven years. Just a few days later, the paralegal and single mother learned her rent was increasing by $300 per month, amounting to a 35-percent jump in family housing costs.

      “I lost my entire raise plus some more,” she told the Straight in a telephone interview. “It’s a big hit for me….Many of us now are talking about moving out, saying that we can’t afford to live here.”

      Baustad resides in a two-building Downtown Eastside housing cooperative called the Lore Krill. The co-op does not fall under the B.C. Residential Tenancy Act, which would have prevented such a significant rent increase. Instead, the Lore Krill has an operating agreement with B.C. Housing that states that every five years, units classified as market housing must adjust their rates to 90 percent of the value of market rents in the surrounding area.

      The new charges are scheduled to take effect July 1. On the low end, a one-bedroom unit at the Lore Krill’s Cordova Street location is increasing by $73, to $765 per month. The largest jump is for three-bedroom units, which are going up 41 percent, or $391, to $1,350 per month. The majority—six of the nine pricing combinations—are seeing rents increase between 20 percent and 30 percent.

      Thom Armstrong, executive director of the Co-operative Housing Federation of B.C., conceded that the Lore Krill rent hikes are steep, but he described the situation as a simple reflection of a changing neighbourhood.

      According to a spring 2014 social-impact assessment prepared for the City of Vancouver, property values in the Downtown Eastside more than tripled between 2001 and 2013.

      Armstrong noted that although the Lore Krill did have to raise its rates for market renters, it did not have to wait the maximum five years to do so.

      “My advice to co-ops who are in this position is always do not wait for the five years,” he said. “Make an assumption based on what you know about the market, that rents are going up. And try to increase housing charges gradually along the way so that you know when you do the five-year review, it doesn’t come as such a cold shower.”

      Thomas Robson, treasurer for the Lore Krill, told the Straight that market rents were adjusted annually against the B.C. consumer price index. “When we talk about this increase that’s happening in July, it’s a lot closer to a 50-percent net increase over the last five years,” he claimed. What the co-op failed to plan for, Robson continued, is the change in property values that has occurred throughout the Downtown Eastside in recent years.

      “When our agreement with B.C. Housing was created, nobody ever foresaw that this sort of staggering leap would happen,” he said. “We have the Housing Ministry of our province saying that this is perfectly okay, simply because a contract says that they can do this. Never mind the morality of it or the actual impact that this is going to have on people in two months.”

      B.C. Housing refused to grant an interview on the topic of co-ops.

      Armstrong noted that there are additional protections for renters built into the Lore Krill’s arrangement. If tenants paying market see their rent pushed beyond 30 percent of their monthly income, they can use the co-op’s agreement with B.C. Housing to apply for a subsidy, he said.

      “Given the tight squeeze that a lot of renters find themselves in, it’s hard to argue that someone whose housing charge is still less than 30 percent of their income is in as tight a bind as many other renters,” Armstrong added.

      D J Larkin, a lawyer with Pivot Legal Society who focuses on housing issues, described the rate increases as “mind-boggling”. But she was quick to note that even the new rates at the Lore Krill are still below those in listings on Craigslist for similar condos in the Downtown Eastside.

      “I know that some of the units are going up as much as 40 percent, which is extremely significant, but it is still below market,” Larkin said. “So I’m actually glad that that still exists and is holding down at least some families in the neighbourhood.”

      Comments

      21 Comments

      Mark

      Apr 23, 2014 at 3:11pm

      Vancouver will only keep extending, and those buildings in DTES will have their rents go up and further down the road, replaced with brand new condo towers.

      Given that no one is willing to stop foreign ownership in this city, this is the real future.

      Trank

      Apr 23, 2014 at 4:01pm

      It has become obvious that the time is now for the big cash grab. Clear out those poor people and erect those towers.

      Martin Dunphy

      Apr 23, 2014 at 4:29pm

      Mark:

      So you posted comments on three different articles (Downtown Eastside co-ops, global warming, and the exclusionary aspect of the environment movement) and managed to reference Chinese people in all three.

      Kinda seeing a pattern here, just sayin'.

      Mathieu

      Apr 23, 2014 at 5:15pm

      Co-Op living is still a dream! 30% of your income!

      Mark

      Apr 23, 2014 at 6:05pm

      @Martin Dunphy - it is a fact, as told by the government, that the majority of those who took advantage of the Investor Immigrant Program came from mainland China. They just want the convenience of a Canadian passport, and a place to park their cash in the form of real estate, which will likely remain empty.

      I don't blame them specifically, I blame the politicians (from municipal all the way to federal) who allowed this to take place.

      I have plenty of friends from Taiwan and Hong Kong. But they adapted here, have good jobs or their own companies, and they contribute to the Canadian economy and way of life. If you do receive a Canadian passport, I think that it should be required that you integrate into society.

      Mark

      Apr 23, 2014 at 6:08pm

      @Martin Dunphy - And in my post above, I said foreign ownership. I didn't say Mainland Chinese, even though that's majority of people I was referring to.

      Martin Dunphy

      Apr 23, 2014 at 7:07pm

      Mark:

      Like I said...

      Lister

      Apr 23, 2014 at 7:38pm

      Co-op living can be a dream, if it works and people take care of each other. It should also show everyone else just how bloated the rental market it. We're all getting screwed.

      Thomas Robson

      Apr 23, 2014 at 9:48pm

      The issue for those living in Homes BC housing co-operatives is that the Province feels it's ok to demand housing charge increases that would be criminal the private sector. There are very good reasons why the Landlord Tenant Act protects people from these sorts of sudden hikes.

      Why should people living in co-ops not deserve similar protection?

      It is understood that housing charges need to go up, but no one was in a position five years ago to forecast the 45% increases that we are seeing in this neighbourhood and say to our members, "hey, that's reasonable, lets aim for that". What would be reasonable would be to stagger the increases so as to meet the new requirements in a manner that won't put families at risk.

      It is families that have the least protection from these increases and when the families move out, we will loose critical subsidised family housing in the DTES.

      Garbo

      Apr 23, 2014 at 10:05pm

      Are we supposed to feel sorry for someone with a good job (paralegal) who now has to pay almost as much as the rest of us for housing? Ridiculous.