TOWN OF VIEW ROYAL COUNCIL REPORT - DRAFT TENANT ASSISTANCE POLICY

DRAFT TENANT ASSISTANCE POLICY

RECOMMENDATION:

THAT Council adopt the draft Tenant Assistance Policy with the following changes:

i. Amend Section 2.1 Applicability as follows: This policy applies to rezoning applications that would result in a minimum of three residential rental dwelling units being permanently vacated due to demolition or substantial renovation. This includes rental units both in the primary and secondary rental markets. ii. Amend Section 2.1 Applicability by deleting the following: “Additionally, the policy serves as best practice guidelines for any other applications which may result in the loss of residential rental units, such as applications for Development Permits and Demolition Permits that are not part of a rezoning application.” iii. Amend Section 2.2 Eligible Tenants by deleting the following: “….therefore the property owner must include the end date of the rental agreement with the tenant. Under no circumstance shall tenants be evicted early to get new tenants in at a higher rent. Tenants should be able to remain in place until such reasonable time that demolition is imminent if they choose.” iv. Amend Section 3.1.4. Right of First Refusal as follows: Eligible tenants shall be offered the Right of First Refusal for a comparable rental unit in the new or renovated building at a rent level of 20% below starting market rent levels. v. Amend Section 3.2 Tenant Relocation Report as follows: A Tenant Relocation Status Report shall be completed and submitted to the Development Services Department at the rezoning stage. vi. Amend Section 4 Exemption For Non-Market Housing Applicants by deleting the following: “Non-market housing applicants meeting the criteria outlined in Section 2.1 are requested to submit an overview of relocation assistance provided to eligible tenants as part of their rezoning application. Section 3 should be considered as best practice guidance for the submission.” vii. Amend Section 5 Vacant Units by deleting the following: “the Tenant Assistance Policy may be applied retroactively, if tenants are found to have been evicted prematurely (for example, a notice to end tenancy for demolition was serviced without property permits and approvals in place.” viii. Amend Section 6 Freedom of Information and Protection of Privacy Act by adding language concerning Personal Information Protection Act as per the recommendation from the Town’s legal counsel;

AND THAT applications received before July 4, 2023 not be required to comply with the Policy;

AND FURTHER THAT a two-year review of the Tenant Assistance Policy report be prepared in 2025.

PURPOSE:

The purpose of this report is to provide Council with background information and analysis regarding a draft Tenant Assistance Policy and seek Council’s approval of proposed changes to the draft Policy.

TIME CRITICAL:

At the Regular Council meeting on June 20, 2023, a draft Tenant Assistance Policy was presented to Council for consideration. Council directed staff to review the draft Policy and return to Council on July 4, 2023 with comments and recommendations.

EXECUTIVE SUMMARY:

The purpose of a Tenant Assistance Policy (TAP) is to help mitigate the potential impacts of displacement on tenants by providing guidelines for developers and property owners to provide additional supports for tenants who are displaced as a result of major renovations or redevelopment.

Staff reached out to the City of Victoria, District of Saanich, and Town of Sidney who currently have TAPs. Both the City of Victoria and District of Saanich carried out engagement with renters, housing providers, developers, property managers and landlords to seek input prior to developing their policies. All three municipalities provided background information, suggestions and lessons learned for the Town to consider when developing and adopting a TAP. Staff also sent the draft Policy to the Town’s legal counsel for review. Staff recommendations consider the feedback provided by local jurisdictions as well as the literature and legal reviews.

BACKGROUND:

Tenant Assistance Policies

Several municipalities throughout the Province are adopting TAPs to help mitigate the potential impacts of residential tenant displacement resulting from major renovations or redevelopment of rental buildings. The purpose of these TAPs is not to halt the development of new purpose-built rental housing and create financial burden for market and non-market housing providers, but to ensure existing tenants are adequately compensated and offered Right of First Refusal (ROFR) in new buildings that replace older and buildings at the end of their service life, which often have rent levels at the low end of market rates.

British Columbia’s Residential Tenancy Act

The British Columbia Residential Tenancy Act (RTA) regulates the rights and responsibilities of landlords and tenants. The RTA Section 49(6)(a) states that a landlord has the right to end a tenancy for the purpose of demolition of a rental unit. RTA Section 49.2 was introduced in 2021 to deal with “renovictions”. It allows landlords to end tenancies to renovate or repair rental units only if the proposed renovations/repairs are substantial enough to require the unit to be vacated. Currently, landlords must apply to the Residential Tenancy Branch for an Order of Possession where an arbitrator determines if vacancy is necessary.

In addition, the RTA requires that all necessary permits (such as building, demolition and plumbing permits) be issued by a municipality before a landlord can issue a Notice to End Tenancy. Furthermore, landlords must give four months’ notice to end tenancies for renovation, demolition and conversions. For buildings containing five or more units, the RTA requires landlords to give tenants who had to vacate for renovations/repairs the ROFR after the work is complete. However, the Act does not regulate rent level offered to tenants upon return and does not require ROFR for demolitions.

DISCUSSION:

Jurisdictional Review

Staff completed a jurisdictional review of TAPs to gauge best practices and lessons learned. Table 1 below summarizes the different applications and expectations of comparable policies within the Capital Region.

Table 1: Jurisdictional Review of tenant assistance/relocation policies as applicable for market sector projects

The comparisons above reveal some similarities and differences between the policies. One component of note is “qualifying buildings”. The City of Victoria has at least one staff person responsible for managing the implementation of the TAP and therefore, can administer a higher volume of applications. Whereas the District of Saanich and Town of Sidney do not have the same staff resources and therefore, adjusted eligibility requirements to reflect staff capacity and resources.

For compensation amounts, such as ROFR, the City of Victoria and District of Saanich require a ROFR of 20% below market rate and the Town of Sidney requires a ROFR of 10% below market rate. Higher rates are more feasible when municipalities offer economic incentives, such as additional density.

Proposed Tenant Assistance Policy

Overall, the Town’s draft TAP is fairly standard when compared to other local jurisdictions. However, staff is recommending some proposed changes to the Policy based on discussions with other local jurisdictions, research, and legal review.

Section 2.1 Applicability

Staff is recommending that the Policy applies to rezoning applications that would result in a minimum of three residential rental dwelling units being permanently vacated due to demolition or substantial renovation. This would include rental units both in the primary and secondary rental markets. This would allow staff to focus efforts on applications affecting tenants in aging purpose-built rental buildings that are likely to be pursued for renovations and redevelopment.

In addition, the Town’s legal counsel recommends removing the following paragraph from Section 2.1 as any attempt to address development that does not require a rezoning must be done by bylaw:

“Additionally, the policy serves as best practice guidelines for any other applications which may result in the loss of residential rental units, such as applications for Development Permits and Demolition Permits that are not part of a rezoning application.”

Section 2.2 Eligible Tenants

The Residential Tenancy Act requires that all necessary permits (such as building, demolition and plumbing permits) be issued by a municipality before a landlord can issue a Notice to End Tenancy. Furthermore, landlords must give four months’ notice to end tenancies for renovation, demolition and conversions.

Given that all necessary permits must be obtained by a developer before they can issue a notice to end tenancy, the following paragraph can be removed from this section, which is consistent with other TAPs:

“….therefore the property owner must include the end date of the rental agreement with the tenant. Under no circumstance shall tenants be evicted early to get new tenants in at a higher rent. Tenants should be able to remain in place until such reasonable time that demolition is imminent if they choose.”

Section 3.1.4 Right of First Refusal

The draft TAP is proposing a ROFR of 25% below market rate, which is not aligned with neighbouring municipalities and higher than other municipalities in the Province, such as the City of Vancouver (also 20% below market rate). These municipalities also offer economic and density bonussing incentives. It is not recommended to go above 20% without offering economic incentives, such as additional density, as it would impact a project’s viability. In response to this feedback, staff is recommending that the Town’s TAP requires a ROFR of 20% below market rate, which is consistent with Victoria and Saanich.

Section 3.2 Tenant Relocation Report

Without a no-build or no-occupancy covenant, it is not lawful to withhold building permits for a development (that otherwise complies with the Town’s building bylaw) on the basis that a Tenant Relocation Status Report has not been completed or is not satisfactory. The draft policy has been revised to require that a report be provided at the rezoning stage. However, for an unforeseen circumstance, the applicant is unable to provide a report at the rezoning stage because not all the information would be available at the time, then Council could require that a no-build or no-occupancy covenant be registered on title ensuring that a Tenant Relocation Status Report be provided prior to issuance of building permit.

Section 4 Exemption For Non-Market Housing Applicants

In the District of Saanich’s Stakeholder Engagement Summary (attached), it states that Non-Market Housing Providers shared several risks associated with a TAP applying to a non-profit housing provider. These risks include administrative burdens and financial viability of non-profit housing projects. It was also expressed during Saanich’s engagement sessions that the non-market housing sector already practices tenant assistance that either meets or exceeds Saanich’s TAP. Given that the Town’s housing policies in the OCP encourage non-market housing development, staff is recommending to amend Section 4 by deleting the following paragraph to avoid any unintended expectations or barriers:

“Non-market housing applicants meeting the criteria outlined in Section 2.1 are requested to submit an overview of relocation assistance provided to eligible tenants as part of their