Email from Doug Foord, Invictus Commercial Investment Corp. re: Tenant relocation plan

Tenant relocation plan

Sent: Wednesday, June 28, 2023 1:38 PM To: Mayor And Council Email mayorandcouncil@viewroyal.ca

Mayor and Council,

Please accept this as constructive comments regarding the adoption of a bylaw that will cause developers to provide First Right of Refusal to existing tenants. There a multitude of reasons why this is not advisable.

First Right of Refusal in the Residential Tenancy Act is only applicable for renovations and maintenance that will take less than four months. The act contemplates that tenants will find accommodation with friends and family etc. for this short term period. It does not contemplate them moving out for the minimum 24 months the new construction would take and then moving back. It is impractical.

In addition, it is not practical to offer the existing tenant rents at 20% or 25% below market rent. That would require the landlord to lose money on these rental units as the rent would be insufficient to cover the debt service on the mortgage and property expenses such as property taxes, insurance etc. These units would either have to be subsidized by higher rents to the other tenants or the development would not move forward as the economics would render the proposed development unviable.

It should not be the responsibility of the landlord and/or tenants that are already paying their fair share of income tax to subsidize those that cannot afford market rent. This should be considered social housing and should be the responsibility of the provincial and federal governments who receive the taxes that would enable the subsidies.

In addition, if the development did go ahead with this reduced rental rate in place it would decrease the NOI (Net Operating Income) substantially. The NOI determines market value that in turn determines the amount of property tax that the Township would receive. As an example. if 30 tenants took the ROFR it would cost the Township approximately $16,850 per annum in lower property taxes. That is income that is required to be made up by the residents in View Royal. I would question their acceptance of this additional responsibility.

It does however make since to require the developer to hire a Tenant Relocation Coordinator to assist the existing tenant to find other accommodation and to require that the developer pay the tenants moving expenses as well as a rental allowance. The Residential Tenancy Act requires only 1 month rental and nominal moving expenses at this time.

Kind regards,

Doug Foord

Doug Foord President

Invictus Commercial Investment Corp. Phone: 778-350-2620 Email: df@icic.us