Condo Conversions Continue Despite Low Vacancy Rate

Wednesday night, after over two hours of presentations and discussion, Regina Planning Commission decided to approve the application to convert the Viva Apartments on 2141 Rae Street into condominiums.

The recommendation for approval comes despite the fact that city staff drafted a strongly-worded report recommending denial; and despite the fact that city policy and provincial legislation indicate that conversions should be denied when the vacancy rate drops below 3% (as reported on this blog back on Dec 11, the present vacancy rate is 0.5%); and despite the fact that five tenants appeared before RPC to express their opposition to the conversion; and despite the fact that according to the city's survey of tenants, 64% of them are opposed to the conversion (when vacancy rates drop below 3%, city policy requires 75% of tenants be in agreement with an application); and despite the fact that two members of the Cathedral Area Community Association and one from the Regina Anti-Poverty Ministry appeared before RPC to oppose the conversion.

In short, the 2141 Rae application has failed every test put before it, official and unofficial, and yet the RPC has recommended approval.

The reasons for the approval? There seem to be two.

On one hand, it was pointed out that at the time the application was made (early last year) the vacancy rate for the central area was 3.5% (the citywide rate was around 1.5%). It was felt by some that because the 2141 Rae application has taken so long (this its third time before RPC) the applicant shouldn't be punished because of the delay and the older area rate should be used (and the older citywide rate ignored). This, of course, ignores the fact that the old area vacancy figure was based on October 2007 data which was already several months out of date at the time the application was made. Assuming the rate was dropping over that time (it had to have been to get from 3.5% to 0.5% in a year) then it's unlikely the actual vacancy rate for the central area was above 3% at that time.

The second reason cited was that the applicant -- DR Realty which is being represented by property manager, Nicor Developments -- is willing to let tenants who moved in before the application was submitted to stay for up to five years (or for life if the tenant is over 70 years old). Also, those tenants will have rent controls in place while they live there. RPC noted that if the conversion is not approved, the property owner will still go forward with renovations to the building but would be forced to finance those renovations by raising rents. Seeing as there are no rent controls in Saskatchewan, the applicant could simply price the apartments out of reach of the current tenants.

Sound to you like a case of a developer holding its tenants and the RPC hostage with threats of massive rent increases? Yeah, to me too.

After 2141 Rae, there are presently in the neighbourhood of 19 more condo conversion applications to be considered before Councillor Clipsham's conversion moratorium comes into effect. That means there are 500 more rental units that will likely be lost to the market and that's going to be a disaster for anyone who rents in this city --- not only will they find it hard to move if they have to, there's also the problem that, as anyone who has taken Econ 101 will tell you, constricting supply while there's an increase in demand is going to lead to a spike in rents.

When this was pointed out during the Wednesday meeting, RPC chair, Coucillor Fougere, remarked that each of the remaining applications will be judged on its own merits so no one should assume that all of the applications will be recommended for approval.

That's reassuring. Because clearly, considering all the opposition and all the factors working against it, if the RPC couldn't bring itself to say no to 2141 Rae, they'll definitely start rejecting applications any day now.

And, as if to put that to the test: shortly after the 2141 Rae conversion was approved, RPC voted to approve another condo conversion on 15 Coventry Road with hardly any debate whatsoever (and that despite the fact that city staff again recommended it be denied on account of the low vacancy rate).

Both the 2141 Rae and 15 Coventry Road conversions will go before city council on Monday January 26 for final approval.


Anonymous said...

City council f*ckheads. Regina voters are so braindead stupid.

Anonymous said...

I don't know if the voters really are that dumb. Think about it: the FEDERAL election barely generated any interest. There is also a perception that municipal-level governments are powerless and useless. Also, when you do go to vote for city council, do you know who the heck you're voting for unless you (a) go out of your way to know, (b) heard about one of the candidates in the news, or (c) recognize their name because they've been on city council since the beginning of time? Seriously. You could argue that the voters are LAZY, but not necessarily dumb. Then again, I do remember Fiacco becoming mayor because he put up a bunch of billboards around town that said "it's time for a change". Even though it kind of wasn't really time for a change. Everybody just kind of went, "yeah, it IS time for a change! We've had the same mayor for too long!" Hm. OK, maybe the voters ARE dumb.

Anonymous said...

holy sh*t, were you hanging out with me in Oct. 2000? we drove around making fun of those "time for a change" slogans as more neo-lib drivel. fiacco/bush...seemed like the '80s were happening all over again. I think Cretien keeping us out of Iraq was more sovereign than Pearson/Trudeau keeping us out of Viet.