Follow-Up: Residential Rental Tenure Zoning

On July 3, 3019 LandlordBC CEO David Hutniak sent a letter to City of Victoria Mayor and Council regarding a staff report entitled Residential Rental Tenure Zoning.  In this follow-up letter of July 10, 2019 he provides recommendations on how the City of Victoria can positively apply RRTZ to help the City, renters and the broader community.

Mayor Helps and Council
City of Victoria
Sent via email:  [email protected]

Subject:  Residential Rental Tenure Zoning (RRTZ)

Dear Mayor Helps and Council,

I am writing you today on behalf of our 3300 members to share with you our recommendations on how the City of Victoria can utilize Residential Rental Tenure Zoning (RRTZ) to preserve existing rental stock while at the same time creating an environment conducive to the substantial construction of new secure purpose-built rental housing for the community.

When the Province introduced RRTZ, we lauded its potential to provide cities and municipalities with an innovative tool that could be applied towards properties not currently developed as rental housing to encourage the building of badly needed new secure purpose-built rental.  When utilized on this basis, RRTZ represents an up-zoning opportunity which in our view was the Province’s intended purpose of the tool.  The application of RRTZ to existing purpose-built rental buildings would, as you well know, represent a down-zoning.  This unnecessary devaluing of personal property will create financial hardship for the building owners.  Furthermore, renters will ultimately be harmed as the incentive for owners to continue to invest in these old buildings beyond basic maintenance will evaporate.  The result will be that the health and safety of these existing old buildings will deteriorate at an accelerated pace.  We cannot imagine that the Mayor and Council would consider this to be a desirable outcome.

Landlords of existing rental housing have invested and continue to invest significantly into our community through the provision of safe, secure, sustainable purpose-built rental housing.  These investments were made in good faith with the expectation that the City would respect their property rights and work with them collaboratively to ensure that we have a broader housing system that works for everyone.  The application of RRTZ to existing purpose-built rental buildings without the express consent of the owner is categorically unfair and will create financial hardship for which the City may potentially be liable.

We know that many of you are property owners.  We cannot imagine that you would appreciate finding your property unilaterally devalued overnight without your consent.  That is what these rental building owners are facing should you elect to proceed with this unfair application of the RRTZ tool.  The fact that Council fears securing owner consent is very telling.  You know that what you are proposing is unfair and unjust.  Any fear that consent will not be provided should not be the rationale for proceeding without it.  Consultation and consent are both critically integral to any land use change.

So, what are the opportunities to truly do something positive for renters and the broader community?

For starters, when considering applying RRTZ to an existing purpose-built rental building, one of the opportunities exists within legal non-conforming properties or properties which density, height and form of the existing use does not conform to current City policy or design guidelines which may conflict with existing zoning.  Take an inventory.  We know that there are purpose-built rental buildings in Victoria where if a catastrophic loss occurred, they would not be able to replace the existing rental stock as it exists today without rezoning.  There is precedent for this in the City of Victoria where tax exemptions and incentives exist for seismic upgrades to Heritage buildings.  This is an opportunity to look at providing the height and density as established within the OCP on a property for an owner who has opted-in to allow RRTZ on their property.  In situations where the existing building does not conform to the current requirements, those properties will be given zoning and density to allow them to rebuild with their existing height, density, parking and in the same form to ensure the housing is protected.  This is a win-win-win for renters, the community and rental building owners, as it should be.

The next opportunity is to apply RRTZ to non-purpose-built rental properties to encourage new rental development.  This is where the application of RRTZ can garner huge benefits for the City, renters and the broader community.

The largest impediment to new rental construction is the availability and cost of land (the uncertainty of the approvals process and timeframe to receive approvals doesn’t help either). The City can stabilize the cost of land while increasing the supply of new rental housing by using RRTZ to up-zone properties to the densities and heights allowed under the OCP. By doing so, the City, renters (both current and future) and the broader community win because you will be providing the framework to encourage substantial new supply consistent with the City’s growth targets and objectives.  It is important to remember that despite the recent increase in new rental housing supply in Victoria, it is insufficient to keep up with existing and anticipated demand. According to a recent report by the CRD’s Regional Outcomes Monitoring Group, the City needs 1,553 new rental homes completed each year to meet the anticipated demand. In 2017, 913 rental homes were completed meaning a shortfall of 640 units.  The right environment must exist for developers and lenders to assume the risk associated with building new secure purpose-built rental housing.

LandlordBC has worked collaboratively with the City in the past and we look forward to working collaboratively long into the future.  RRTZ can be a valuable tool to retain existing rental supply and to substantially increase the supply of new secure purpose-built rental housing in the City.  This however can only be accomplished through the proper engagement of all those potentially impacted while recognizing that the fair and just treatment of property owners is sacrosanct.


David Hutniak
Chief Executive Officer