White Rock city council has taken action to provide greater protection for tenants in aging rental buildings slated for redevelopment.
At its Oct. 19 regular meeting, council voted unanimously to support the recommendation from its land use and planning committee (LUPC), held earlier that day, to revise Council Policy 511 (which deals with density bonus amenity contributions) and Council Policy 514 (which deals with tenant relocation).
The intention is to trade-off amenity contributions required of rental building developers for higher density, in exchange for increased compensation for displaced tenants.
“To put it very simply,” planning and development services director Carl Isaak told the LUPC, “(it would be) increasing the the financial compensation the developer would provide to their existing tenants, while reducing the city’s expectation for amenity contributions – looking at that enhanced support for tenants as one of the benefits being provided to the community.”
Compensation was previously three months rent for tenants with up to four years of residency – increasing to a maximum of six months rent for tenants with more than 15 years residency.
That now jumps to four months rent for tenants with less than one year’s residency, increasing in two month increments for each year (29 months rent for tenants with 15 years residency, for example).
Compensation can now reach a maximum of 44 months (four years) rent for tenants who have been in their building 30 years or more.
Tenants must also be offered first right of refusal to occupy a suite in the new building at a reduction of the current market rent.
This could result in reduced rents of from 20 per cent below the market rent (for tenants with less than one year residency) to as much as 30 per cent below (for tenants with more than 10 years residency in the old building).
“These are very strong policies and I think they will be very well-received by our residents,” Coun. Anthony Manning said. He asked when the compensation would “kick in.”
“The intent of the policy is that the lump sum be paid out and that it be used at the tenant’s discretion for both the interim and until the new building is completed,” Isaak said.
“They may actually find that they’re not wanting to return to the new building, they simply have the discretion to use it, as their choice.”
In response to a question from Coun. Erika Johanson, Isaak said that while the policy appears to have a shorter notification time than renovictions under the provincial Residential Tenancy Act (two months, as opposed to three months), notifications under the policy would actually start from the time of an application, rather than the issuing of a demolition permit.
“The compensation amounts in the Residential Tenancy Act are far exceeded by this policy, so I think that’s partly incorporated into what the developer is required to compensate their tenants with.”
Coun. Scott Kristjanson moved that the notification time under the city policy be increased to three months anyway, which was approved unanimously by council.
Kristjanson also noted that, as confirmed by Isaak, market rents for new buildings could be significantly higher for new buildings, even with the reduction offered to tenants of the previous building.
“We’re trying to figure out, do we add more affordable housing that’s slightly more expensive, or do we have our existing stock and have less of it,” he said.
Council had also asked staff to look at whether annuities would be an option to lump-sum payments, and ultimately decided to include this as an option, although Isaak had noted information received to this point from financial institutions about the possibility of compensating tenants through annuities has been inconclusive.
Isaak pointed out that “most institutions don’t do annuities for less than $50,000, while most of the tenant compensation would be between $20,000 and $30,000, or even less.”
Isaak said the city had clarified with the Canada Revenue Agency that compensation paid to tenants in this situation would not be considered taxable, as long as there wasn’t an investment income portion. If the compensation came in the form of an annuity receiving interest income, however, “that portion may be taxable, but the straight compensation itself would not be,” he said.
Isaak also said the city had heard from the provincial Ministry of Social Development and Poverty Reduction that the intention – while not yet formally entrenched in policy – would be that payments related to displacement and tenant compensation “would not have an impact on income-tested benefits.”