Rent Control for Private SROs Passes in Vancouver

Vancouver city councillors voted to implement stricter rent control for tenants who live in single-room occupancy hotels after hearing the policy could prevent people from becoming homeless amid steadily rising rates and gentrification.

But some building owners warned councillors that the move could make it impossible for them to continue to operate the buildings.

The decision comes after council voted last year to approve a plan to buy all of the remaining privately-owned hotels that provide housing to some of the poorest and most vulnerable people in Vancouver.

The city previously tried to expropriate two SROs that had been severely neglected by their owner, leading to the sale of the Balmoral and Regent hotels to the city.

A bylaw enacted in 2005 prevents SRO buildings from being redeveloped into condos, offices and tourist hotels. But after studying the pressures SRO tenants are still facing, city staff recommended that vacancy control be implemented for privately-owned SROs in Vancouver.

B.C.’s rent laws currently restrict rent increases to 1.5 per cent a year, but rents can be raised an unlimited amount when tenants more out. Vacancy control ties rent control to the unit, not the tenant, meaning rent increases are limited even if tenants change.

The city will use its business licencing powers to enact vacancy control.

“If we don’t act now, we will lose all the affordable housing,” Nicole Baxter, an SRO resident, told council. She said she currently pays $700 a month to rent a room, which takes up 85 per cent of her income.

“I’ve been at the same building for a period of five years, it’s a private SRO, and what’s been happening is they do a little bit of renovations, paint the walls and the rent goes up,” said Marvin Delorme.

“And some of the long-term residents have been asked to leave, because of alcoholism or drug addiction or mental health, then they do a quick job of renovating it and continue to jack up the rent. That’s the procedure for the last three years, and it’s not slowing down.”

Coun. Jean Swanson said investor owners have bought multiple hotels over the past two decades. She said owners have bought the buildings with the assumption that existing tenants can be evicted and rents can be raised.

She said she remembered advocating for SRO tenants in the 1970s when people were dying in fires in the buildings. Advocates successfully lobbied to get sprinklers installed over the protestations of building owners.

“We probably saved about 350 people by the city sticking to its guns there,” she said.

SROs are century-old hotels with small rooms, no kitchens and shared bathrooms. They’re common in the Downtown Eastside and other parts of downtown Vancouver, housing many of the city’s poorest and most vulnerable people.

Advocates for SRO tenants told council it’s been common over the past two decades for buildings to change hands and for tenants to be offered buyouts or be evicted so that rents can be raised when new tenants move in.

The tactic is still going on today, Dani Aiello, an advocate with the SRO Collaborative, told councillors. She said there is a building that she couldn’t name for fear that tenants could face harassment, which has been emptied to around 15 per cent capacity.

“This hotel has been rapidly emptied over the last year… tenants have been offered cash for keys, tenants have gotten eviction notices for the most spurious infractions,” Aiello said.

She said she’s seen some elderly tenants sign agreements to accept just $1,000 to move out of the room they’ve lived in for decades, not realizing how difficult it will be to find a new place to rent at the social assistance shelter rate of $375 a month.

Several councillors asked advocates and tenants about whether limiting rent increases would mean that landlords would not be able to afford to maintain the aging buildings.

But Wendy Pedersen, the executive director of the SRO Collaborative, said tenants are often scared to ask for repairs because of fears of reprisal.

“I’ve noticed from many times of trying that tenants really can’t ask for a repair without risking a backlash and potential eviction, or a cascade of evictions, and even building closures in the worst-case scenario,” Pedersen said.

City staff have tracked rent increases in private SROs and found that after buildings are sold to a new owner, rents often rise much higher than B.C.’s current rent rate limits allow per year. If vacancy control isn’t put in place, SRO rents could rise 37 per cent over the next decade, according to the city staff report.

In their report to council, staff said the city would work with SRO owners to help them access grants, federal funding and rent subsidies to close the gap between inadequate social assistance rent rates and the revenue needed to keep the buildings in good shape. But building owners said the proposal doesn’t take into account the rising costs of running the aging buildings.

Keith Wiebe, the founder of Anhart Community Housing, told council his organization is struggling to continue to operate an SRO hotel it owns in the Downtown Eastside.

Average rents are $481 but operating and maintenance costs exceed the revenue that rents bring in, and Anhart can’t provide all the supports tenants need, Weibe said.

He said the city staff’s calculation that most SRO buildings would be able to continue to operate with vacancy control in place isn’t correct.

While many privately-owned SROs that are operated by non-profit housing providers receive funding from BC Housing to help with rent subsidies and support services, the SRO hotel that Anhart operates, the Dodson, does not receive any government funding.

Wiebe said his organization has had conversations with BC Housing over the years, but those conversations have not resulted in funding help.

Peter Thanas, an SRO owner, said he purchased his building because he couldn’t afford to own another type of rental building. He said vacancy control would make it impossible for him to sell his building and would make it hard to pay for repairs.

Thanas said private owners don’t get the same kind of government subsidies non-profit housing operators get.

Linda Ly, who helps operate an SRO building her parents bought, said her family goes above and beyond to keep their tenants housed. But she estimated that rents need to be set at around $600 a month to make it possible to continue running the buildings.

Gilles Cyrene, an SRO tenant, told council he was not sympathetic to the complaints from building owners. He said his landlord had bullied him and other tenants, tried to raise his rent more than is permitted by B.C.’s rent laws and improperly evicted tenants in his building.

“If they’re such a bad-asset class, why don’t they just sell and let a non-profit take over the building?” Cyrene said.

Paul Mochrie, the city manager, told council that the root problem with SROs is that social assistance rates have not increased the shelter rate for years. He said the enormous gap between private rental market rents and the $375 shelter allowance means that the provincial and federal governments ultimately have to step in to prove rental subsidies or social housing.

When tenants damage the buildings, owners have to pay for repairs, Thanas said.

Mochrie said vacancy control is an important tool in the meantime, but it’s not going to solve that fundamental problem.

“Until we’ve resolved that whether it’s purchase of these buildings or replacement of these buildings, or additional income so that people can pay rents that are closer to the actual cost of housing, we’re going to continue to struggle,” he said.

Around half of all SRO buildings in the city are owned by the province or non-profit housing operators.

Vancouver council’s plan to buy the rest of the city’s SRO stock — estimated to cost $1 billion — needs help from senior levels of government to fund those purchases and operate the buildings.