Okanagan strata councils seek how to maintain rental controls

55 and over exemption offers pushback option to rental restrictions being lifted

The current age restriction bylaws strata councils had the authority to impose on potential renters have been lifted by the provincial government on the premise of expanding the rental vacancy opportunities across the province. (Contributed)

The current age restriction bylaws strata councils had the authority to impose on potential renters have been lifted by the provincial government on the premise of expanding the rental vacancy opportunities across the province. (Contributed)

The provincial government has taken away much of the legal authority of strata councils to impose rental restrictions with the idea of easing pressure on the rental vacancy market.

But unintended consequences of that action may limit the effectiveness of addressing either low rental vacancy or creating more affordable housing options.

Tony Gioventu, executive director of the Condominium Home Owners Association of B.C., says the relaxation of rental restrictions is already showing signs of driving up the cost of condos and strata councils opting to bypass the new rules by adopting a 55 and over residency rule exemption.

“The challenge here is there is no shortage of rental units available for the 55 and over age group, but we’ll have a better sense in six months to a year how may stratas opt to go that route,’ said Gioventu.

“We had 17 direct inquiries about that, thinking if we change to 55 and over it would limit the number of rentals in our building which can otherwise no longer be prohibited.”

The revised strata rental rules were announced by Premier David Eby last month and were quickly pushed through the legislative process and adopted as law by the B.C. Lieutenant Governor last Thursday.

“It is now the law of the land as of Friday,” Gioventu said.

Under the revised rules, all current age restriction strata that are not 55 and over will no longer be enforceable, such as for 19 and over, adult only, 35 and or 45 and over.

Age restrictions do apply to occupancy, not ownership. If a strata council adopts a 55 and over bylaw, current residents in the building at the time of passing are exempt from the bylaw.

As well, any bylaw restrictions for the period of rentals, the number of rentals, or which prohibits rentals can no longer be applied by strata councils.

Gioventu said the 55 and over option will actually serve to further limit rather than open up rental unit access, while the price of condo units has already shown an increase in the speculator investment market.

“We have been watching the listings in the past week and we are seeing increases now of up to $50,000 in some listings with the rental rules now wide open. To see that increase in the condo market is not good when rental affordability is already a problem,” he said.

Relaxing rental rules, Gioventu added, will also create more potential difficulty in self-managing properties.

“The challenge is we have about 34,000 strata corporations across the province and about 22,000 of them are 50 units or less, which are largely self-managed because they don’t have the resources to employ a full-time manager,” he said.

“So between pressure from investors and tenants, and landlord issues, it just makes it that much more difficult to self-manage a property.

He anticipates going forward there will be some further changes to strata corporation bylaws and the residential tenancy act in figuring out how to deal with these problems sooner rather than later.

The affordable housing issues and rental vacancy shortfall are issues that date back to 2000.

“People forget that from 2000 to 2010 there was an enormous wave of conversion of rental buildings to condo buildings across the Lower Mainland, and places like Victoria, Kelowna and Penticton.

“So, viola, quite a few units that investment rental units were converted to ownership condos. We lost quite a number of rental units just through that process.”

He says over the past 25 years, the occupancy per home has reduced from 2.4 to 1.1 per residence so which places greater pressure on increased housing options to meet a reduced density level as the general population continues to grow.

A better solution from the COHA’s point of view would be to place a higher burden on developers to provide an affordable housing component, say five per cent, on all new condo projects.

He cites pre-2010 surveys done by COHA in Victoria, Kelowna, Prince George, Kamloops and the Lower Mainland showed a 99.9 per cent occupancy rate for condos either by renters or owners, a figure that has since slipped to 84 per cent.

“You are seeing more unoccupied units sitting vacant,” said Gioventu, the owners of which in Kelowna are referred to as ‘shadow residents’ because they don’t live in the city full-time.

Adding to that is the popularity of short-term B&B units which has taken further rental unit opportunities off the long-term market.

“Changing the eligibility rules is part of the problem as well, as the government acknowledges AirBnB generates tax revenue and for communities is a benefit for the local tourism industry…so that is an ongoing balancing act for government,” he said.

READ MORE: B.C. Premier lays out plan to tackle housing affordability crisis

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