Opinion: Stronger tenant protections keep real estate speculators at bay

Written for Daily Hive Urbanized by Neil Vokey, who is a renter in East Vancouver and a member of the Vancouver Tenants Union.

Last year, the City of Vancouver passed the controversial Broadway Plan covering 485 city blocks that parallel the incoming SkyTrain Millennium Line extension to Arbutus.

The Broadway Plan aims to guide development over the next 30 years and eventually double the corridor’s current residential population. However, even prior to the plan passing, real estate speculation along the corridor has already mounted enormous pressure on the thousands of tenants who live there — roughly 25% of the city’s existing purpose-built rental stock.

When members of the Vancouver Tenants Union (VTU) surveyed hundreds of renters living next to future subway stations, they talked to renters in buildings where services and communication had drastically scaled back after their buildings were sold — evidence that the new owners were interested in speculation opportunities more than being landlords. VTU members also found significant rent gaps — the difference between rents being paid and market rates — meaning that an eviction due to redevelopment would mean 60% to 70% rent increase for the average renter along Broadway.

Perhaps recognizing that this scale of displacement might be unpalatable to residents, City staff included new provisions in the Broadway Plan that would require developers to support incumbent renters affected by new developments. This includes the right to return to a new building at the same rent they were previously paying, and top ups to stabilize tenants’ rents in the interim.

Municipal tenant protections like this would be a small island of relative security in an otherwise chaotic and wildly unaffordable housing market for renters.

Senior levels of government have failed massively to address sky-high land values, build public housing, raise welfare and disability rates or implement rent controls that are tied to the unit (vacancy control). This puts all the more pressure on municipal governments to protect affordability. Metro Vancouver is already the eviction capital of Canada, and is regularly named the most expensive city to rent in. The stakes of eviction by way of demolition (aka “demoviction”) are incredibly high for most renters — oftentimes upending lives when residents are forced out of their communities.

Recently in The Globe and Mail, commercial real estate commentators noted that the stronger tenant protections (along with rising interest rates) had caused a huge slowdown in apartment building sales along the Broadway Corridor. Commentators like Mark Goodman — a noted critic of “government intervention” in the housing market — frame the tenant protections as an untested policy and a “risk” that scares potential buyers. But Goodman is in the business of selling properties, not developing them — what do developers think?

In fact, similar tenant protections to those in the Broadway Plan have been on the books in the neighboring city of Burnaby since 2020. The Tenant Assistance Policy was developed by a task force composed of tenants and labor representatives, as well as real estate industry representatives like Urban Development Institute CEO Anne McMullin and Wesgroup’s Beau Jarvis.

The very same zoning policies that Goodman is calling a “risk” has, in Burnaby, spurred their city’s largest-ever “building boom” of market and below-market housing. Similar to the tenant protections in the Broadway Plan, Burnaby’s policy allows demovicted tenants to return to new units that stay permanently below market rate, even when they move out (20% below CMHC average rents). According to figures from the City of Burnaby, the one-to-one replacement of these affordable rental units through the Tenant Assistance Policy effectively tripled the number of below-market rental units in development in 2021.

Looking at Burnaby, it’s clear that stronger tenant protections don’t stymie new development. If the only observed phenomenon in Vancouver is that properties are changing hands at a lower frequency, perhaps it’s more accurate to say that added protections help to keep real estate speculators at bay.

When municipalities enact development policies that center tenants as valued community members, it forces developers and planners to grow our neighborhoods more thoughtfully — where working-class renters have a chance to benefit from permanently affordable housing and public infrastructure like a subway line.

Pitting development against affordability in a zero-sum game works best for those who stand to make the most from speculation frenzies — like real estate agents. But Burnaby Major Mike Hurley credits his city’s housing successes to the “collaborative” approach taken by the community task force that developed their policy.

Vancouver, meanwhile, needs to enable stronger tenant protections citywide, not just in the Broadway corridor. City data in the Vancouver Plan shows that renter-dense neighborhoods like the West End, Grandview-Woodland, and Marpole also have the lowest median household incomes, putting them among the highest risk of displacement. Until other levels of government step up, municipal protections like this may be renters’ only hope of staying in their city.