Last year, the provincial government passed legislation allowing municipalities to zone for rental-only developments. The new tool gives cities the power to mandate a certain percentage of units to be rentals or to protect existing rental properties from redevelopment.
In January, New Westminster became the first B.C. city to use the new tool when it approved a bylaw to rezone 18 existing properties as rental-only. Twelve of the properties are city-owned, while the remaining six are privately owned stratified buildings that have been operating as rentals for many years.
The decision undeniably devalues these properties. The owners claim that the city passed the bylaw as hastily as possible to prevent them from attempting to sell off the units first. The city didn’t inform the owners of readings on the proposal, and within two weeks of being introduced, it was passed. The council claimed there was an “urgent need” to pass it, presumably because renovictions were deemed imminent.
“Renovictions” is maybe the most emotionally loaded word in New West at the moment. The current mayor and council all realize what a potent political issue it is, and they’ve been elected under promises to put a stop to them. Mayor Jonathan Cote claims that tenants of 315 units have been forced out in the last couple of years in his city, and he’s vowed to do what it takes to preserve existing rentals.
LEGAL CHALLENGES
But the first wielding of the rental-only zoning tool may turn out to be an overreach. The six property owners are taking the city of New Westminster to the B.C. Supreme Court. They claim that lack of consultation, combined with inaccurate and false statements in public notices, should force the bylaw to be delayed or reversed. There’s also a section of the provincial legislation that prevents the tool from overriding existing strata laws.
The downzoning and devaluing of their properties particularly stings because they’ve been paying higher property taxes for stratified units. None of them had plans to sell, and all had been reputable landlords for decades. Instead of a pat on the back for keeping their units on the rental market, they were seemingly arbitrarily chosen as the first owners to have their property downzoned by the city.
Developers argue that the bylaw will scare any company or bank away from taking on projects in New West. Right now, the city is among the leaders in the Lower Mainland in adding new rental stock. This law may cause that growth to slow to a trickle.
Council members have complained that they were tired of telling constituents they couldn’t do much to stop renovictions. When the province gave them this new tool, they immediately tried to use it to preserve existing rentals, even though that’s arguably not it’s best use. I think it should be deployed to encourage new rental supply, not as a penalty or preservation tool that devalues people’s property.
This municipal tool is the first and still only one of its kind in North America. It’s a scary precedent to see it being used to take away property rights without compensation.
