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Dan Fumano: Berkeley Tower owner increases buyout offer to tenants

Tenants at the Berkeley Tower in the West End had previously been offered an average of $10,000 per unit to vacate their homes to allow for major renovations. On Friday, the offer increased to an average of $15,000 per unit.

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The owner of a West End tower where tenants have organized to fight evictions offered more cash Friday to persuade residents to leave their homes.

The development at the 16-storey Berkeley Tower overlooking English Bay is an example of increasing tensions between tenants and landlords in a city with near-zero vacancy rate and a rapidly shifting rental housing landscape.

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Next week, Vancouver city council is to consider an “anti-renoviction” motion. And the provincial government’s rental housing task force is expected to file its report early next month, which could lead to the first changes to B.C.’s residential tenancy legislation since several years before the term renoviction was coined.

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Reliance Properties, the local development company that bought the 60-year-old Berkeley Tower for $43 million in 2016, presented tenants Friday with a new, larger buyout offer for those who agree to leave, the company confirmed to The Vancouver Sun.

The previous offers, calculated based on apartment size and time of tenancy, averaged about $10,000 a unit, said Reliance president Jon Stovell, or roughly double the compensation required under government regulations. Friday’s offers increase that to an average of closer to $15,000 a unit, roughly triple the requirements.

But tenant advocates have argued the practice of offering ever-escalating cash pay-outs to remove tenants from affordable rental homes erodes a city’s affordable housing stock in the long run.

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In June, Reliance asked the Berkeley’s 60 renters to move out in the next year to allow for major structural, electrical and plumbing work on the building, a process the owner has said will take about two years and cost $20 million.

In the months that followed, about 40 per cent of tenants accepted buyouts, Stovell said Friday, and those who accepted the original offer will get the new one.

Jon Stovell, president and CEO of Reliance Properties.
Jon Stovell, president and CEO of Reliance Properties. Photo by Nick Procaylo /PNG

The increased offer shows that “organizing tenants works,” said longtime anti-poverty activist Jean Swanson, who was elected last month to Vancouver city council. “But I don’t think it’s enough. And it’s not going to help the tenants in other buildings that are being renovicted.”

For an individual tenant, a $15,000 payout might feel like winning the lottery. But, said Swanson, “that’s why these buyouts are so insidious.” Displaced tenants must find new, more expensive homes, and even a $15,000 payday might only provide enough of a top-up to cover their higher rents for a few years, she said.

Swanson said there is a broader issue: “We need affordable housing stock and if we let landlords get rid of tenants so they can raise the rents and build luxury commodities, we’re losing that (affordable) stock.”

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Swanson says it was only within the past three years she started hearing of landlords offering cash buyouts to get tenants to leave affordable homes. She first noticed it in the Downtown Eastside, in the cheapest rental units in Canada’s poorest postal code. More recently, she’s started hearing about buyouts in the West End and Kitsilano in apartments built for middle-income renters.

In San Francisco, a city with an acute housing crisis where buyouts have been more widespread for longer, the city maintains a public list of every agreement under which landlords pay tenants to vacate rent-controlled apartments. City and County of San Francisco government records show six-figure buyouts are not uncommon; earlier this year, a tenant in the Tenderloin — San Francisco’s version of Vancouver’s Downtown Eastside — accepted a buyout of US$193,750.

Before Reliance can begin renovating the Berkeley, it needa approval of a development permit, which is currently under review by city staff. The city has no deadline to make the decision, but Stovell said he expects it early in the new year.

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Before that, however, Vancouver council will hear this week from dozens of people who have signed up to speak to a motion on Tuesday’s agenda, introduced by Swanson, entitled “Protecting Tenants from Renovictions and Aggressive Buy-Outs.”

Swanson’s motion seeks, among other measures, for Vancouver to look at regulating and publicly registering buyouts, as San Francisco does. Swanson’s motion elicited a memo last week from Vancouver’s chief planner Gil Kelley, outlining which of its recommendations appear to be outside of the city’s power, including publicly registering buyouts.

Stovell, for his part, doesn’t think publicly registering buyout agreements “would be the end of the world,” and was candid with The Vancouver Sun about the offers at the Berkeley.

But other measures proposed by Swanson — such as requiring landlords to offer displaced tenants the opportunity to return after the completion of renovations without their rent increasing — are not practical, in Stovell’s view, and would contribute to unintended consequences of discouraging the construction of rental housing and contributing to the deterioration of the existing stock.

“Unfortunately, I think what’s going to happen is if (governments) move too hard to stop this type of investment and renewal of our existing stock … it slowly but surely turns into very substandard housing,” Stovell said.

A total of 93 speakers signed up to speak on Swanson’s motion next week, an unusually high number and a testament to Swanson’s ability to mobilize a crowd. By comparison, of the eight other motions on notice introduced by her council colleagues this month, none drew more than seven speakers.

dfumano@postmedia.com

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