You read that right. According to CMHC's October 2009 survey of the nation's rental market (released yesterday), the average vacancy rate in Regina is now a whopping 0.6 per cent.
0.6 per cent.
We are tied with Quebec City for the lowest vacancy rate in the country.
You will remember from our June coverage, CMHC reported that vacancies in Regina had reached 0.7 per cent in April, up from 0.5 per cent over October of 2008. CMHC predicted at the time that vacancy rates would continue to slowly climb.
They didn't.
You may also remember that back in the summer, developers who were hoping to speed along their condo conversions pointed to CMHC's somewhat rosy outlook for the rental market and argued that there is nothing more to worry about as the market is headed in the right direction.
It isn't.
We've been waiting on the provincial and the federal government for over a year now to do something about the appalling housing situation in this city. Well, the province's purse strings just cinched up tight. And housing is going to be the last thing on the minds of Harper's scandal plagued Conservatives.
It's looking like we're on our own here.
And 22 people were recently turfed from their homes in an office building and tasked with finding a place to live this winter. Expect to see more people living in hastily-converted and not-up-to-fire-code office buildings and other inappropriate structures. That's what happens when your vacancy rate essentially zero.
I'll write more on this when I've had time to go over the report in detail.
Showing posts with label housing. Show all posts
Showing posts with label housing. Show all posts
12.17.2009
6.24.2009
The Imperiled Municipal Policy Puzzle
Monday night's council meeting taught me one thing -- and it's something I've suspected for a while -- no matter how carefully and wisely drafted a municipal policy is, without constant vigilance (and occasional outrage and fury) from the community, politicians will happily allow developers to rewrite any parts they find inconvenient.
In the case of condominium conversions (backgrounder here), we have a policy that says they shouldn't be approved when the vacancy rate falls below three per cent. An exception clause is provided which says that the three per cent provision may be waived if 75 per cent of residents support the conversion and none of the residents feel they will suffer hardship as a result of it.
By passing so many condo conversions, council will argue (and has argued) that they are adhering to this policy. With each new conversion, they carefully make certain that they have the needed tenant support and that there are no outstanding letters of outrage from them. Fair enough. And yet, no one seems to recognize that the policy says that they "may" approve a conversion under certain circumstances. Not that they "must" or "will" or even "should." The suggestion in this language is that when the vacancy rate gets perilously low, conversions should be an occasional thing that happen only under extraordinary circumstances. Meanwhile, the stronger language in the policy is used to refer to the council's power to deny a conversion, saying that if the vacancy rate as determined by CMHC falls below three per cent, "a conversion application is to be denied" [my emphasis].
Can't get clearer than that.
And yet, while we have had a vacancy rate well below three per cent for the last two years at least, all but one condo conversion has been approved over that time.
Seems that in the mind of council that "may" and that "is to be" have been swapped around.
Be that as it may, in light of council's failure to protect Regina's rental stock, a community has gathered to oppose these conversions. Angry citizens have appeared before Regina Planning Commission and city council to express their concerns about affordable housing and the loss of rental suites to the tide of conversions sweeping the city's inner neighbourhoods. The opposition has even become more organized of late as the Regina Anti-Poverty Network has struck a housing subcommittee, its first order of business being to raise the alarm about condo conversions.
And while all this activism has only managed to stop one conversion, it has succeeded in improving the lot of those tenants who live in buildings that have been converted. To assuage the troubled conscience of council by mitigating any possible hardship their tenants could suffer, developers have been encouraged to include ever more progressive provisions in their tenancy agreements. To get to that magic "75 per cent of tenants approve of this conversion", they are now regularly offering lifetime tenancy to residents 70 years of age or older, three or five years of guaranteed tenancy, and -- remarkably -- rent controls ensuring tenants won't have to pay more than 85 per cent of market rent for a comparable suite. Lately, developers are being expected to guarantee that 75 per cent of their units will remain rentals. And a few developers are even offering rent-to own schemes and lifetime tenancy for long term residents.
There are problems with all this, obviously (and they're fodder for another blog post) but without a doubt, the tenants who face condominium conversion today are far better off than those who went through this a year ago.
Council and RPC can likely take some of the credit here for waving their power to deny a conversion in the face of the development community. And I've heard council repeatedly give credit to certain developers for coming forward with such generous residency packages.
But none of this would have happened if community organizers like Christina Luberti, Peter Gilmer and all the people who've protested and spoken out hadn't been constant thorns in the side of council.
So, while the condo policy isn't succeeding -- as written -- to protect the rental supply, it has been put to good purpose in protecting tenants.
Meanwhile, more than four hours into the same meeting, after most of the gallery had (understandably) emptied, council approved a 70 unit apartment building on E Quance Street.
Sounds swell. More rental stock on it way. Councillor O'Donnel even said of this development "this is wonderful, this is the way it should be."
As we blogged before, city administration had recommended denial for this apartment because it was planned for a commercially zoned area. They pointed out that putting a residential development there violated the Official Community Plan and that area's neighbourhood plan.
It has been argued (in this Leader Post article) by Garth Frederickson, the Bison Properties developer behind this apartment plan, that this is the "right project in the right place." He said that he doesn't adhere to "the old view that here's where this stops and this starts, and it's going to be homogeneous until we get to that point."
He makes the OCP sound like some kind of antiquated, social engineering document. But there are good reasons for zoning the east of the city the way it is. Not only does it protect the interests of businesses along the highway who set up shop expecting the area to be a commerical zone busy with car traffic lured off the highway, but it also serves to discourage the sprawl of residential out to the fringe of the city.
In their report on the Quance proposal, city staff even note, "there is not a current shortage of lands appropriate for high density residential development.... Vacant lands framing the downtown are specifically identified for such high density residential development in the draft downtown plan. Within various built-up communities there are various areas in transition where high density residential re-development would aid in revitalization of aged housing stock and mitigate population decline."
Mayor Fiacco, during discussion of this application, noted, "It would be different if we had ten applications before us... then we could be a bit more picky about which areas we want apartment's built, but that's not the case here."
Of course, one could argue that the whole point of having an Official Community Plan that outlines where residential developments should and shouldn't be built is so that when developers are casting their eyes about Regina and looking for lots on which to build apartments, they'll choose places that the city feels are more desirable while avoiding places that don't fit with our vision of what kind of city we want to become.
If it were to deny applications such this one on Quance Street, council would be telling the development community that we do not want Regina to become one of those cities that sprawls off ad nauseum toward the horizon. That we want to increase our density and build up population in areas that are already served by infrastructure.
Instead, at the end of discussion on the Quance Street development, council directed city staff to look into rezoning the area around it to accomdate more residential.
A perusal of apartment applications that have come in over the last 11 months suggests that developers have been trying to build such apartments on the eastern fringe of the city since 2003 at least. Now, thanks to a rental squeeze that makes any proposal to build apartments look apetizing, not only have they been granted their wish to build there, but the OCP will be changed so that no future applications of this sort will be breaking the rules. In essence, the developers have been allowed to rewrite the Official Community Plan.
And all this happened because of a lack of media scrutiny and community activism against such actions.
But don't get me wrong. I'm not blaming anyone in the community or the media even. It's hard to get upset about new rental units being built in the city, no matter where it is. But that doesn't change the fact that, thanks to projects like this one being encouraged, more and more of Regina's lower and middle income renters will be shunted off to the fringe of the city. And, more ominously, council has demonstrated that they are unwilling to enforce plans and policies that, when the chips are down, become inconvenient for the development community.
If you care about the vision for this city that's being laid out in things like the Downtown Plan and the Core Community plan, then this should be a worrying development. In the draft Downtown Plan, for instance -- and especially in the Built Form Framework -- there are many provisions that over time may be seen by developers as too restrictive.
One wonders if this council will have the stones to hold developers to the high standards this plan is trying to set.
In the case of condominium conversions (backgrounder here), we have a policy that says they shouldn't be approved when the vacancy rate falls below three per cent. An exception clause is provided which says that the three per cent provision may be waived if 75 per cent of residents support the conversion and none of the residents feel they will suffer hardship as a result of it.
By passing so many condo conversions, council will argue (and has argued) that they are adhering to this policy. With each new conversion, they carefully make certain that they have the needed tenant support and that there are no outstanding letters of outrage from them. Fair enough. And yet, no one seems to recognize that the policy says that they "may" approve a conversion under certain circumstances. Not that they "must" or "will" or even "should." The suggestion in this language is that when the vacancy rate gets perilously low, conversions should be an occasional thing that happen only under extraordinary circumstances. Meanwhile, the stronger language in the policy is used to refer to the council's power to deny a conversion, saying that if the vacancy rate as determined by CMHC falls below three per cent, "a conversion application is to be denied" [my emphasis].
Can't get clearer than that.
And yet, while we have had a vacancy rate well below three per cent for the last two years at least, all but one condo conversion has been approved over that time.
Seems that in the mind of council that "may" and that "is to be" have been swapped around.
Be that as it may, in light of council's failure to protect Regina's rental stock, a community has gathered to oppose these conversions. Angry citizens have appeared before Regina Planning Commission and city council to express their concerns about affordable housing and the loss of rental suites to the tide of conversions sweeping the city's inner neighbourhoods. The opposition has even become more organized of late as the Regina Anti-Poverty Network has struck a housing subcommittee, its first order of business being to raise the alarm about condo conversions.
And while all this activism has only managed to stop one conversion, it has succeeded in improving the lot of those tenants who live in buildings that have been converted. To assuage the troubled conscience of council by mitigating any possible hardship their tenants could suffer, developers have been encouraged to include ever more progressive provisions in their tenancy agreements. To get to that magic "75 per cent of tenants approve of this conversion", they are now regularly offering lifetime tenancy to residents 70 years of age or older, three or five years of guaranteed tenancy, and -- remarkably -- rent controls ensuring tenants won't have to pay more than 85 per cent of market rent for a comparable suite. Lately, developers are being expected to guarantee that 75 per cent of their units will remain rentals. And a few developers are even offering rent-to own schemes and lifetime tenancy for long term residents.
There are problems with all this, obviously (and they're fodder for another blog post) but without a doubt, the tenants who face condominium conversion today are far better off than those who went through this a year ago.
Council and RPC can likely take some of the credit here for waving their power to deny a conversion in the face of the development community. And I've heard council repeatedly give credit to certain developers for coming forward with such generous residency packages.
But none of this would have happened if community organizers like Christina Luberti, Peter Gilmer and all the people who've protested and spoken out hadn't been constant thorns in the side of council.
So, while the condo policy isn't succeeding -- as written -- to protect the rental supply, it has been put to good purpose in protecting tenants.
Meanwhile, more than four hours into the same meeting, after most of the gallery had (understandably) emptied, council approved a 70 unit apartment building on E Quance Street.
Sounds swell. More rental stock on it way. Councillor O'Donnel even said of this development "this is wonderful, this is the way it should be."
As we blogged before, city administration had recommended denial for this apartment because it was planned for a commercially zoned area. They pointed out that putting a residential development there violated the Official Community Plan and that area's neighbourhood plan.
It has been argued (in this Leader Post article) by Garth Frederickson, the Bison Properties developer behind this apartment plan, that this is the "right project in the right place." He said that he doesn't adhere to "the old view that here's where this stops and this starts, and it's going to be homogeneous until we get to that point."
He makes the OCP sound like some kind of antiquated, social engineering document. But there are good reasons for zoning the east of the city the way it is. Not only does it protect the interests of businesses along the highway who set up shop expecting the area to be a commerical zone busy with car traffic lured off the highway, but it also serves to discourage the sprawl of residential out to the fringe of the city.
In their report on the Quance proposal, city staff even note, "there is not a current shortage of lands appropriate for high density residential development.... Vacant lands framing the downtown are specifically identified for such high density residential development in the draft downtown plan. Within various built-up communities there are various areas in transition where high density residential re-development would aid in revitalization of aged housing stock and mitigate population decline."
Mayor Fiacco, during discussion of this application, noted, "It would be different if we had ten applications before us... then we could be a bit more picky about which areas we want apartment's built, but that's not the case here."
Of course, one could argue that the whole point of having an Official Community Plan that outlines where residential developments should and shouldn't be built is so that when developers are casting their eyes about Regina and looking for lots on which to build apartments, they'll choose places that the city feels are more desirable while avoiding places that don't fit with our vision of what kind of city we want to become.
If it were to deny applications such this one on Quance Street, council would be telling the development community that we do not want Regina to become one of those cities that sprawls off ad nauseum toward the horizon. That we want to increase our density and build up population in areas that are already served by infrastructure.
Instead, at the end of discussion on the Quance Street development, council directed city staff to look into rezoning the area around it to accomdate more residential.
A perusal of apartment applications that have come in over the last 11 months suggests that developers have been trying to build such apartments on the eastern fringe of the city since 2003 at least. Now, thanks to a rental squeeze that makes any proposal to build apartments look apetizing, not only have they been granted their wish to build there, but the OCP will be changed so that no future applications of this sort will be breaking the rules. In essence, the developers have been allowed to rewrite the Official Community Plan.
And all this happened because of a lack of media scrutiny and community activism against such actions.
But don't get me wrong. I'm not blaming anyone in the community or the media even. It's hard to get upset about new rental units being built in the city, no matter where it is. But that doesn't change the fact that, thanks to projects like this one being encouraged, more and more of Regina's lower and middle income renters will be shunted off to the fringe of the city. And, more ominously, council has demonstrated that they are unwilling to enforce plans and policies that, when the chips are down, become inconvenient for the development community.
If you care about the vision for this city that's being laid out in things like the Downtown Plan and the Core Community plan, then this should be a worrying development. In the draft Downtown Plan, for instance -- and especially in the Built Form Framework -- there are many provisions that over time may be seen by developers as too restrictive.
One wonders if this council will have the stones to hold developers to the high standards this plan is trying to set.
6.23.2009
Pics From Last Night's Council Meeting
Fifty or 60 people turned out for the meeting. In this pic, Nicor president Ross Keith addresses council with gravel-voiced determination.
The Regina Anti Poverty Ministry's Peter Gilmer asks Council to turn down four condo conversions. (Council doesn't.)
Ward 4 Councillor Michael Fougere, who chairs the Regina Planning Commission, which recommended passing the condo conversions council is considering this night.
Regina Mayor Pat Fiacco asks that one conversion application be sent back to City Administration so they can negotiate a better deal for tenants. (It is.)
Nicor president Keith and property owner Jason Diewold, who touts his properties' rent to own option.
City Council Update
Councillors Michael Fougere (Ward 4, southeast Regina), Wade Murray (Ward 6, centre-northeast), Sharron Bryce (Ward 7, north) and Jerry Flegel (Ward 10, north of Regina amid the golden Prairies). Photo by Stephen Whitworth.
It was a six hour council meeting -- Whitworth and I stuck it out to the bitter, bitter end. Apologies if this is shorter than it should be....
Meeting started with four condo conversions. Two were approved (15 Barr Avenue and 125 Froom Cr.) and two were referred back to city administration (230 E Broadway Ave and 2620 5th Ave) because there was some concern that tenant hardship hadn't been completely dealt with there.
The city also approved the expansion of the Prince of Wales library branch, the extension of the contract for Paratransit service, a zone agreement for the Souls Harbour Mission and a zoning exception for an apartment building to be put up out Quance way.
Also approved the purchase of a couple low floor buses, tax exemptions for the food bank and airport authority, a boost in transit fees, and funding of $10,000 for the Folk Fest's 40th anniversary while giving $10,675 to the Science Centre for it's 20th. Don't really much care that the Science Centre got a little extra money, it's such a tiny amount in the grand scheme of things --- but why $675 dollars exactly? Such an odd number.
Oh, also, you want to keep chickens in your backyard? Sorry. It's practically illegal now.
6.21.2009
The Enigma of the Inevitable Apartments
At their Monday night meeting, council will be considering the case of a proposed 73-unit apartment complex to go up at 3725 E Quance Street. If approved, this building will complete a trilogy of rental developments planned for the far east end of Victoria Ave/Highway One. The others are at 3351 E Eastgate Bay and 3730 Eastgate Drive.
The Quance Street development is interesting in that it is going before council with no recommendation from Regina Planning Commission attached to it. At the June 11 RPC meeting, the question of this development resulted in a tied vote. And instead of waiting until a meeting where more committee members could be present who could perhaps break the deadlock, committee chair, Ward 4 Councillor Michael Fougere -- who will be championing this project before council -- chose to move the application through the system. (You can read the Leader Post coverage here.)
City administration recommended denial for this application for a variety of reasons. Among them is the fact that the property is situated in an area zoned Major Arterial Commercial (MAC), which means it's meant for large-format retail that's built for car traffic -- not pedestrians. The road it's on is a feeder onto the highway so the closest thing to residential that's appropriate here is a motel. That's why the Official Community Plan indicates that an apartment building is not an acceptable use of the property. (Hence the need to go before council before turning sod for it.)
The other two apartments in this trio are in similarly inhospitable environs. For instance, the Eastgate Bay development -- which is intended to serve the senior's market -- is more than half a kilometre from the nearest busstop and only two thirds of the route to it has a sidewalk. More alarmingly, it will also be located within 120 metres of the Husky Truck Stop. Not only will the seniors in the Eastgate Bay building have to put up with the sound of idling trucks, the station occasionally serves rigs hauling dangerous goods. According to our traffic bylaws such vehicles are not allowed within 150 metres of residential properties.
Also of note, as all three buildings are poorly served by pedestrian infrastructure, the cost of retrofitting these neighbourhoods to accomodate residential foot traffic will be borne by the city.
Despite the fact that our plans, planners, policies and bylaws indicate that putting up residential in such a residential-unfriendly zone is inadvisable at best, these projects are still making their way through the system and finding favour with many on Regina's council.
In fact, just as Monday's Quance Street application will get before council despite enough opposition on RPC to bring the committee to a stalemate, the 3730 Eastgate Drive project made it before council despite a great deal of official opposition. That project (which was considered last October) was actually voted down by Regina Planning Commission (a rare thing) -- RPC as a body actually agreed with the recommendations of its staff. And yet, the Eastgate Drive project went before council and it was council that approved the project. (Update: Just spoke to Councillor Browne and apparently even reports that RPC votes to deny go before council. Who knew? This might be the first RPC denial I've seen.)
When you think of where these buildings will be built, you have to wonder, who would want to live there? The landscape is dominated by parking lots that are nearly always almost empty and only completely full one day out of the year. Streets are wide. Sidewalks are few. It is a land of asphalt, exhaust and howling wind. It's territory ceded to the automobile.
Thing is, no one wants to live there. I certainly don't. I'd wager none of the people on council and RPC who are pushing these buildings through despite the fact that they contradict the vision of our Official Community Plan would want to live there either.
But with our perilously low vacancy rate, many in Regina will find they have nowhere else to go.
The Quance Street development is interesting in that it is going before council with no recommendation from Regina Planning Commission attached to it. At the June 11 RPC meeting, the question of this development resulted in a tied vote. And instead of waiting until a meeting where more committee members could be present who could perhaps break the deadlock, committee chair, Ward 4 Councillor Michael Fougere -- who will be championing this project before council -- chose to move the application through the system. (You can read the Leader Post coverage here.)
City administration recommended denial for this application for a variety of reasons. Among them is the fact that the property is situated in an area zoned Major Arterial Commercial (MAC), which means it's meant for large-format retail that's built for car traffic -- not pedestrians. The road it's on is a feeder onto the highway so the closest thing to residential that's appropriate here is a motel. That's why the Official Community Plan indicates that an apartment building is not an acceptable use of the property. (Hence the need to go before council before turning sod for it.)
The other two apartments in this trio are in similarly inhospitable environs. For instance, the Eastgate Bay development -- which is intended to serve the senior's market -- is more than half a kilometre from the nearest busstop and only two thirds of the route to it has a sidewalk. More alarmingly, it will also be located within 120 metres of the Husky Truck Stop. Not only will the seniors in the Eastgate Bay building have to put up with the sound of idling trucks, the station occasionally serves rigs hauling dangerous goods. According to our traffic bylaws such vehicles are not allowed within 150 metres of residential properties.
Also of note, as all three buildings are poorly served by pedestrian infrastructure, the cost of retrofitting these neighbourhoods to accomodate residential foot traffic will be borne by the city.
Despite the fact that our plans, planners, policies and bylaws indicate that putting up residential in such a residential-unfriendly zone is inadvisable at best, these projects are still making their way through the system and finding favour with many on Regina's council.
In fact, just as Monday's Quance Street application will get before council despite enough opposition on RPC to bring the committee to a stalemate, the 3730 Eastgate Drive project made it before council despite a great deal of official opposition. That project (which was considered last October) was actually voted down by Regina Planning Commission (a rare thing) -- RPC as a body actually agreed with the recommendations of its staff. And yet, the Eastgate Drive project went before council and it was council that approved the project. (Update: Just spoke to Councillor Browne and apparently even reports that RPC votes to deny go before council. Who knew? This might be the first RPC denial I've seen.)
When you think of where these buildings will be built, you have to wonder, who would want to live there? The landscape is dominated by parking lots that are nearly always almost empty and only completely full one day out of the year. Streets are wide. Sidewalks are few. It is a land of asphalt, exhaust and howling wind. It's territory ceded to the automobile.
Thing is, no one wants to live there. I certainly don't. I'd wager none of the people on council and RPC who are pushing these buildings through despite the fact that they contradict the vision of our Official Community Plan would want to live there either.
But with our perilously low vacancy rate, many in Regina will find they have nowhere else to go.
6.20.2009
Regina Rental Scorecard
With housing likely to be the focus of much debate during Monday's council meeting, it seemed a good time to look at how Regina is doing in its struggle to alleviate the rental crunch.
Do you like numbers? Yeah, me neither. Still, I went back over city council decisions from July 2008 (the oldest up on the city's website) through to now and tallied up how many rental units have been lost to condo conversions and how many new rental suites have been supported by council in some way.
(I should note, the numbers here include the applications being considered Monday as though council approves them -- which, I will venture to say, is a fair assumption. If, however, it turns out that some are denied, these numbers will need to be adjusted.)
Anyway, here we go....
Between July 2008 and June 2009, 239 rental units were in buildings which Regina Planning Commission (RPC) greenlit for conversion to condominiums. (101 of those units are being considered by council on Monday.)
179 units were in buildings where an agreement was struck with the city so that 75 per cent of the units would have to remain rental suites.
Assuming the developers abide by that restriction, that means 156 of the 239 rental units can be expected to be turned into condos.
Meanwhile, RPC has supported the construction of 416 rental units (70 of which will be considered Monday).
Most of those are in the form of new apartment complexes for which the city granted discretionary use applications. But, 102 units in development were supported directly by the city through tax cuts and/or grants.
What does this all add up to? Well, if everything goes as planned, Regina should eventually see 210 more rental suites as a result of the last 11 months worth of decisions.
Sounds pretty good, doesn't it? Considering the current rental market consists of around 20,000 units, this represents a little more than a 1 per cent increase in the rental pool. A modest improvement. And, assuming all 210 units stay vacant for a while and don't get snatched up by people moving into the city or people displaced by condo conversions, that could help our vacancy rate creep up to that magic three per cent level.
There are a few things to keep in mind here, though.
First, that 75 per cent provision will only be in effect for five years or until the vacancy rate gets up to three per cent. Once either of those conditions is met, another 179 rental units will become vulnerable.
Second, if the city had followed it's policy to deny condo applications once the vacancy drops below three per cent, instead of only an anticipated net increase of 210 units, the rental pool could have been expected to grow by 416 units.
Third, considering how much the city has grown and is hoping to grow over the next couple years, it seems likely that 210 units (or 416, for that matter) will be insufficient to satisfy the city's need for new rental accomodation. Sure, there will probably be more rental built in the future. But there are also a few more condo conversions in the queue. What that adds up to is we're seeing the amount of rental space increase at a crawling pace when what the market needs is a brisk walk at the very least.
And fourth, a large portion of the new rental suites under development are to be built on the edge of the city. 191 of them, in fact. Those'll be going up around E Eastgate Dr and Quance St. (Another 70 units are slated for 110 N Broad St. While that's pretty far north, it seems to be a more residential-friendly area and not isolated among big box stores and parking lagoons like the Eastgate and Quance developments.)
Thus, as the bulk of the conversion applications have come from the city's centre, the 156 households that have been displaced by condos will likely find themselves hunting for a home on the fringe of the city.
Do you like numbers? Yeah, me neither. Still, I went back over city council decisions from July 2008 (the oldest up on the city's website) through to now and tallied up how many rental units have been lost to condo conversions and how many new rental suites have been supported by council in some way.
(I should note, the numbers here include the applications being considered Monday as though council approves them -- which, I will venture to say, is a fair assumption. If, however, it turns out that some are denied, these numbers will need to be adjusted.)
Anyway, here we go....
Between July 2008 and June 2009, 239 rental units were in buildings which Regina Planning Commission (RPC) greenlit for conversion to condominiums. (101 of those units are being considered by council on Monday.)
179 units were in buildings where an agreement was struck with the city so that 75 per cent of the units would have to remain rental suites.
Assuming the developers abide by that restriction, that means 156 of the 239 rental units can be expected to be turned into condos.
Meanwhile, RPC has supported the construction of 416 rental units (70 of which will be considered Monday).
Most of those are in the form of new apartment complexes for which the city granted discretionary use applications. But, 102 units in development were supported directly by the city through tax cuts and/or grants.
What does this all add up to? Well, if everything goes as planned, Regina should eventually see 210 more rental suites as a result of the last 11 months worth of decisions.
Sounds pretty good, doesn't it? Considering the current rental market consists of around 20,000 units, this represents a little more than a 1 per cent increase in the rental pool. A modest improvement. And, assuming all 210 units stay vacant for a while and don't get snatched up by people moving into the city or people displaced by condo conversions, that could help our vacancy rate creep up to that magic three per cent level.
There are a few things to keep in mind here, though.
First, that 75 per cent provision will only be in effect for five years or until the vacancy rate gets up to three per cent. Once either of those conditions is met, another 179 rental units will become vulnerable.
Second, if the city had followed it's policy to deny condo applications once the vacancy drops below three per cent, instead of only an anticipated net increase of 210 units, the rental pool could have been expected to grow by 416 units.
Third, considering how much the city has grown and is hoping to grow over the next couple years, it seems likely that 210 units (or 416, for that matter) will be insufficient to satisfy the city's need for new rental accomodation. Sure, there will probably be more rental built in the future. But there are also a few more condo conversions in the queue. What that adds up to is we're seeing the amount of rental space increase at a crawling pace when what the market needs is a brisk walk at the very least.
And fourth, a large portion of the new rental suites under development are to be built on the edge of the city. 191 of them, in fact. Those'll be going up around E Eastgate Dr and Quance St. (Another 70 units are slated for 110 N Broad St. While that's pretty far north, it seems to be a more residential-friendly area and not isolated among big box stores and parking lagoons like the Eastgate and Quance developments.)
Thus, as the bulk of the conversion applications have come from the city's centre, the 156 households that have been displaced by condos will likely find themselves hunting for a home on the fringe of the city.
6.19.2009
The Curious Case of (Continued) Condo Conversions
Monday's city council meeting agenda has just come out and I don't know if I've ever seen one quite so long. Looks like the the largest chunk of the meeting will be taken up by four condominium conversion applications and the delegations that are coming out to speak for and (mostly) against them.
Alongside them, council will also be considering an apartment complex that is slated to go up at 3275 E Quance Street -- that's way out on the eastern edge of the city.
Taken together, these five items are significant in that they show how, where housing is concerned, the decisions of Regina Planning Commision are completely at odds with the recommendations of the city's Department of Planning and Sustainability. Have to wonder if this doesn't make for some tense dealings between them.
In the case of the condo conversions, city staff recommended all four be denied due to the city's abyssmally low 0.7 percent vacancy rate -- just up from October's 0.5 percent. Despite this, planning commission recommends all four be approved by council.
(For more on the hows and whys of this, check out this post by Whitworth or the condo writeup from the June 4 prairie dog.)
City staff have argued repeatedly that they have to recommend denial for these applications because city policy indicates that they should not be given approval if the vacancy rate is below three per cent. An exemption is granted under the policy if 75 per cent of renters don't object to a conversion and if no one identifies hardship would result from it. The city solicitor's office, however, has advised RPC repeatedly that in their legal opinion that exemption may not be valid under the provincial condominium legislation and they cannot guarantee it would protect the city from litigation.
In an effort to rehabilitate the city's aging multi-unit housing stock, RPC and council continue to approve conversion applications. Considering this track record, it seems pretty likely that the four applications before council on Monday will also be passed -- despite the fact that six community delegations will be coming out speak against them. (Plus, the gallery is expected to be pretty close to full with people alarmed by the conversions.)
At the same time, these could be among the last conversions to come to council before Councillor Clipsham's condo conversion moratorium takes effect. (There are two more applications that are still being negotiated between city staff and the developers.)
As has been pointed out to me by a couple councillors, this moratorium on condo conversions is an unprecedented move for our city council. And, they claim, it should be seen as a decisive move to deal with the affordable housing crunch in the city.
Now, when that conversion moratorium was passed, there were over 20 applications in the queue that the moratorium did not apply to. That represented several hundred rental units. When I pointed this out (seperately) to Councillors Fougere and Flegel, and spoke somewhat preemptively of those units being "lost to the market", both councillors pointed out that each conversion application would be considered on its own merits and there were no guarantees that all or even the majority of them would be approved.
It's worth pointing out now that in the last year and a half, only one condo conversion application has been turned down. (That was the Viva Apartment application. And you can read about the fallout from that here.)
Meanwhile, there's this apartment building that's to be built out on Quance Street. City administration recommended denial on this because of its isolated location (it is faced by a big box store's loading dock on one side, a strip mall parking lot on another, and empty land/Prairie on the other two).
It could be argued that the need for 70 new rental units should override any concerns about building placement. And if this building is approved, that is likely how it will be spun by council.
But by recommending denial, city staff are following the Official Community Plan which states that housing shouldn't be placed scattershot around the city. You shouldn't have lonely apartment buildings surrounded by big box stores and parking lagoons. It doesn't make for a cohesive city.
Moreover, one could argue that this building and another similar complex at 3351 Eastgate Bay which was approved by council back in May are the worst concerns of conversion opponents coming to fruition: namely, that affordable housing in the core of the city will be lost to condo conversion, while new affordable housing -- along with the low income people who rent them -- will be shuffled off to the edge of the city.
Taken altogether -- the condo conversions while the vacancy rate is so low, the new apartments on the edge of the city (and don't get me started on a New Housing Incentives Policy which staff have prepared but Executive Committee has let languish in limbo) -- we have a worrying situation developing where policies are put together, city staff makes recommendations based on those policies but committees and council ignore those policies when it's convenient.
As Diane Delaney, co-ordinator of the Provincial Association of Transition Houses and Services of Saskatchewan, said of the last round of condo conversions:
"The city administration people are recommending not to do this. And these are people who are well educated, experienced professionals that they’ve hired to give them advice and then they consistently ignore what their own administration advises them. And it’s not even like they could replace them with a whole group of other people because any competent city planner would give them the same advice. But for some reason they seem to think they know better. Then one would have to ask, why is that? Why are they making decisions that fly in the face of what their own city planners are recommending? You can leave that open to people to speculate on why that may be."
That city policy and staff recommendations can be overridden so often does not bode well for, say, the Downtown Neighbourhood Plan. It may outline an exciting direction for the city. But it seems there's no guarantee council has to follow it.
Alongside them, council will also be considering an apartment complex that is slated to go up at 3275 E Quance Street -- that's way out on the eastern edge of the city.
Taken together, these five items are significant in that they show how, where housing is concerned, the decisions of Regina Planning Commision are completely at odds with the recommendations of the city's Department of Planning and Sustainability. Have to wonder if this doesn't make for some tense dealings between them.
In the case of the condo conversions, city staff recommended all four be denied due to the city's abyssmally low 0.7 percent vacancy rate -- just up from October's 0.5 percent. Despite this, planning commission recommends all four be approved by council.
(For more on the hows and whys of this, check out this post by Whitworth or the condo writeup from the June 4 prairie dog.)
City staff have argued repeatedly that they have to recommend denial for these applications because city policy indicates that they should not be given approval if the vacancy rate is below three per cent. An exemption is granted under the policy if 75 per cent of renters don't object to a conversion and if no one identifies hardship would result from it. The city solicitor's office, however, has advised RPC repeatedly that in their legal opinion that exemption may not be valid under the provincial condominium legislation and they cannot guarantee it would protect the city from litigation.
In an effort to rehabilitate the city's aging multi-unit housing stock, RPC and council continue to approve conversion applications. Considering this track record, it seems pretty likely that the four applications before council on Monday will also be passed -- despite the fact that six community delegations will be coming out speak against them. (Plus, the gallery is expected to be pretty close to full with people alarmed by the conversions.)
At the same time, these could be among the last conversions to come to council before Councillor Clipsham's condo conversion moratorium takes effect. (There are two more applications that are still being negotiated between city staff and the developers.)
As has been pointed out to me by a couple councillors, this moratorium on condo conversions is an unprecedented move for our city council. And, they claim, it should be seen as a decisive move to deal with the affordable housing crunch in the city.
Now, when that conversion moratorium was passed, there were over 20 applications in the queue that the moratorium did not apply to. That represented several hundred rental units. When I pointed this out (seperately) to Councillors Fougere and Flegel, and spoke somewhat preemptively of those units being "lost to the market", both councillors pointed out that each conversion application would be considered on its own merits and there were no guarantees that all or even the majority of them would be approved.
It's worth pointing out now that in the last year and a half, only one condo conversion application has been turned down. (That was the Viva Apartment application. And you can read about the fallout from that here.)
Meanwhile, there's this apartment building that's to be built out on Quance Street. City administration recommended denial on this because of its isolated location (it is faced by a big box store's loading dock on one side, a strip mall parking lot on another, and empty land/Prairie on the other two).
It could be argued that the need for 70 new rental units should override any concerns about building placement. And if this building is approved, that is likely how it will be spun by council.
But by recommending denial, city staff are following the Official Community Plan which states that housing shouldn't be placed scattershot around the city. You shouldn't have lonely apartment buildings surrounded by big box stores and parking lagoons. It doesn't make for a cohesive city.
Moreover, one could argue that this building and another similar complex at 3351 Eastgate Bay which was approved by council back in May are the worst concerns of conversion opponents coming to fruition: namely, that affordable housing in the core of the city will be lost to condo conversion, while new affordable housing -- along with the low income people who rent them -- will be shuffled off to the edge of the city.
Taken altogether -- the condo conversions while the vacancy rate is so low, the new apartments on the edge of the city (and don't get me started on a New Housing Incentives Policy which staff have prepared but Executive Committee has let languish in limbo) -- we have a worrying situation developing where policies are put together, city staff makes recommendations based on those policies but committees and council ignore those policies when it's convenient.
As Diane Delaney, co-ordinator of the Provincial Association of Transition Houses and Services of Saskatchewan, said of the last round of condo conversions:
"The city administration people are recommending not to do this. And these are people who are well educated, experienced professionals that they’ve hired to give them advice and then they consistently ignore what their own administration advises them. And it’s not even like they could replace them with a whole group of other people because any competent city planner would give them the same advice. But for some reason they seem to think they know better. Then one would have to ask, why is that? Why are they making decisions that fly in the face of what their own city planners are recommending? You can leave that open to people to speculate on why that may be."
That city policy and staff recommendations can be overridden so often does not bode well for, say, the Downtown Neighbourhood Plan. It may outline an exciting direction for the city. But it seems there's no guarantee council has to follow it.
6.11.2009
Regina Rental Market Improves! Ever... So... Slightly
The Leader Post is reporting on recently released CMHC numbers that indicate that Regina's April 2009 vacancy rate has shot up to an astonishing 0.7 percent! Granted, that's down from 1.4 per cent in April of last year. But it veritably towers over the 0.5 percent we had in October. That's a 0.2 percent climb in a mere six months. That means we could have as many as FOUR MORE vacant apartments in the city!
Now, during the latest round of condo conversion applications, it has been argued that conversions should be allowed to go forward because Regina's rental market is recovering. That argument has been based on a fall prediction by the CMHC that we'd reach a 1.2 per cent vacancy rate this year.
But, it would seem that if vacancies keep opening up at the rate these most recent numbers indicate, we'll probably fall short of that. In the office pool, the smart money's on a 1 per cent vacancy rate in CMHC's October report.
Regardless, there is no indication that Regina's vacancy rate will in the near future hit the magic 3 percent that city administration considers the minimum for a healthy rental market.
And yet, the condo conversions continue.
Meanwhile, claiming they have nothing to do with affordable housing, city council refuses to stauch the loss of rental units to condo conversion until a moratorium introduced late last year comes into effect.
Maybe they don't or shouldn't have anything to do with affordable housing. But judging by CMHC numbers, city council policy has a great deal to do with the affordability of housing: the average rent for a two-bedroom apartment has risen from $756 in October 2008 to $786 this April.
Now, during the latest round of condo conversion applications, it has been argued that conversions should be allowed to go forward because Regina's rental market is recovering. That argument has been based on a fall prediction by the CMHC that we'd reach a 1.2 per cent vacancy rate this year.
But, it would seem that if vacancies keep opening up at the rate these most recent numbers indicate, we'll probably fall short of that. In the office pool, the smart money's on a 1 per cent vacancy rate in CMHC's October report.
Regardless, there is no indication that Regina's vacancy rate will in the near future hit the magic 3 percent that city administration considers the minimum for a healthy rental market.
And yet, the condo conversions continue.
Meanwhile, claiming they have nothing to do with affordable housing, city council refuses to stauch the loss of rental units to condo conversion until a moratorium introduced late last year comes into effect.
Maybe they don't or shouldn't have anything to do with affordable housing. But judging by CMHC numbers, city council policy has a great deal to do with the affordability of housing: the average rent for a two-bedroom apartment has risen from $756 in October 2008 to $786 this April.
6.09.2009
Planning Commission: Revenge Of The Condos
Cody Craswel, condo-agitatorWhitworth here, pinch-hitting for Dechene whose plane left this morning.
So I was out for the first two hours of last night's five-hour planning commission meeting. On the agenda: a schwack of applications by developers to convert rental units to condos. The procedure: Regina Planning Commission looks at each application, hears a recommendation from City administration, then comes up with a recommendation--approve or deny--for Council.
The controversy: Regina has in the ballpark of 100 rental suites available for the entire city right now, and taking more off the market is a blow to tenants who subsequently may or may not be forced/pressured/etc. out of these suites. Actually it's a problem for renters throughout the city, because with fewer rental suites available the rents go up. Supply and demand!
The drama: lots. First, there's the fact that there's fewer than 100 rental suites in the city (repeated for emphasis), which is a dangerous situation given that not everyone can afford a place to sleep as it is. When residency is like a high-stakes game of musical chairs, some are inevitably going to be left without an apartment when the music stops playing.
And so Peter Gilmer of the Regina Anti-Poverty Ministry (RAPM) was on hand to argue against the conversion (there were six seeking approval) because taken in total they create serious problems for lower-income individuals and families.
Also, there was pre-meeting protest held outside by some young adults who need affordable rental suites because they're not at the stage of their lives where they can afford to buy overpriced converted condominiums.
Council, meanwhile, has rarely met a conversion application it doesn't like. And while there's a moratorium on conversions, it doesn't apply to applications that were in the queue before the moratorium was approved. Like these ones.
Which brings us to the meeting.
I sat through the first two applications and the presentations before them. The first was kicked off with Gilmer's presentation against allowing any further conversions.
Gilmer spoke eloquently and passionately against the conversions, and stood firm when questioned by councillors. Did he recognize that the Province and the federal government have substantially more resources to address housing issues? they asked. Yes, said Gilmer, but the City has tools for this as well--like turning down conversion applications in a tight market--and it should use them.
But weren't these proposed conversions out of the price range of the people RAPM is trying to help anyway? Surely converting them to condominiums won't alleviate their housing issues? Well, said Gilmer, actually, taking more rental units off the market makes the remaining units more valuable in the rental market, and would likely cause rents to go up through the city--which would affect the people who come to RAPM for help.
City administration (civil servants) also recommended all the conversion applications be denied.
Well, to make a really long story shorter, planning commission recommended Council approve all six applications, although two were directed back to property owners who will be asked to improve protections for renters and address hardship issues.
You can read today's Leader-Post story here. I'm sure we'll have more in the next prairie dog (June 22).
The recommendations go before council on Monday, June 22. You know what would be fun? Giving City Council a huge audience that night.
Who's in? It'll be festive!
HIGHLIGHT OF THE NIGHT: So a lot of these condo conversions are supposedly being approved partly because they keep rental property on the market. This is because many of the conversion agreements state that 75 per cent of suites are to remain rental property--and if they're sold, then owners are hit with a $2500 fine.
Now, some critical, miserable, wet blanket-types might suggest a $2500 fine is nothing if you can flip a unit and make a huge profit. It's just a fee on doing business. It's not enough of a disincentive.
In fact, Councillor Louis Brown (Ward 1--south end and university), in a show of solidarity with the wet blanket crowd, said that he'd be more comfortable with conversions if the penalty was raised. He said that shouldn't be a problem, since the property owners have all promised not to sell the rental-only condo units, so they shouldn't mind a higher penalty that they'd never have to pay anyway because they're all honest businessmen.
And so Brown proposed raising the fine to $10,000. And said he was going to make a formal motion on that.
But, he warned, if RPC refused to go for that, he'd make another motion. For a lower fine: $7500.
But, he threatened, if RPC wouldn't pass that motion, then the gloves would really come off. And he'd make a motion to raise the fine to $5000.
Take that, RPC!
And here's what happened: Having successfully telegraphed his "this is how low I will go" negotiating position, Counc. Brown made all three motions--which were near-unanimously voted down, one after the other.
And the piddly $2500 fine stood.
Counc. Michael Fougere (Ward 4--south-west Regina), who is the chair of Regina Planning Commission, said the $2500 penalty could always be raised later if protected condos start being sold from the rental market.
Cody Craswel, the 21 year-old condo protestor in the photo on this page, was sitting in front of me and was not impressed.
"By then it will be too late!" he chirped to his roommate and fellow activist, Melissa Hassima.
The kid's got a point.
5.29.2009
What Will An Extra $300 A Month Get You?
A piece of angle iron. But I'll get back to that in a minute.
Several months ago prairie dog ran a story about the Viva Apartments. In case you didn't read it, the Viva was another of those three-story walk-up apartments that was up for condo conversion. Thanks in large part to dogged activism of one of its tenants, Christina Luberti, that condo conversion was stopped. The only condo conversion to have been denied by city council in... well... ever, despite the city's vacancy rate plunging from 1.5 percent to 0.5 percent in the last year. And despite the fact that city policy states that condo coversions are supposed to be denied if the citywide vacancy rate drops below 3 percent unless 75 per cent of tenants support the conversion and none of them indicate they will face substantial hardship as a result of it.
The Viva conversion was halted not because of the vacancy rate being 0.5 percent, by the way. Council has passed several condo conversions while the rate was that low, both before and after and the Viva controversy. No, the conversion was halted because Luberti was able to demonstrate to council that there was not 75 percent support for it among Viva residents.
Throughout the process, representatives for Viva's property manager, Nicor, warned that rents in the building were below market and that to finance the substantial renovations the Viva needed, rents would have to go up dramatically if the conversion was not approved. Some saw this as a threat. On more than one occasion, I even heard it described as the developer was holding city council hostage.
To soften things, Nicor came forward with a seven-point tenancy agreement for residents in their apartment buildings that were facing condo conversion. It guaranteed them multi-year tenancy along with rent controls. And while Nicor was lauded repeatedly for coming forth with such a generous agreement, it's worth noting that the agreement council saw is very different from Nicor's original offer to tenants. It was thanks to negotiations and pressure from the city and thanks to tenant activism and the threat that several Nicor-managed conversions were imperiled that the property manager relented.
Anyway, around the time Viva was being considered, Nicor had four other buildings up for conversion. All were passed and those tenants were protected by some version of the seven-point agreement. As the Viva conversion was denied, those tenants are not protected at all.
And I had a chance to talk to Christina Luberti recently and found out that her rent will rise from the low-$500 range when Nicor took over management of the Viva to the mid $800 range.
"It feels kind of punitive," she remarked.
She says that in her discussions with the Nicor-employed building manager the rent hike is to finance work on the facade and the common areas. She says she doesn't know what kind of work the building needs that's so expensive it would require such a substantial hike in tenants' rents.
I asked her what work had been done so far. She pointed to a piece of angle iron bolted to a post alongside the front steps -- the piece of angle iron in the picture above. Several of the buildings tenants are elderly, she says -- one being in her 80s -- and they've been asking for a railing out front for years. That angle iron is Nicor's solution. You'll note that it is only secured on one end and waves freely at the other. The ends were left cut sharp until Luberti wrapped them in electrician's tape so none of the neighbourhood kids would get injured on them.
The lesson to developers in the Viva should have been that the city's condo conversion policy had teeth -- if a conversion didn't meet city standards then it could get turned down. It could be argued that the example of the Viva is why so few conversions were brought to council in its immediate wake, and why developers have been so ready of late to accept a restriction included with the latest wave of conversion approvals that any building converted to condos must remain 75 percent rental.
But the example of the Viva also shows that in the absence of any provincial rent-control scheme or some kind of independent tenants' rights group, the developers really do hold all the cards in this game.
As reported earlier on Dog Blog, city council approved three more condo conversions on Hamilton Street.
4.03.2009
Crowdsourcing to Monitor Sask Rents
For those who don't know what "crowdsourcing" is, it's when you get the public (via the web) to do some job for you. In a good way.
In this case, ActUpInSask.org is asking Saskatchewan renters who faced rent increases in our tight housing market to submit their rent increases.
In this case, ActUpInSask.org is asking Saskatchewan renters who faced rent increases in our tight housing market to submit their rent increases.
1.27.2009
Council Cancels Condo Conversion
Following up on this post... At last night's meeting, city council voted unanimously to deny the application to convert 2141 Rae Street, the Viva Apartments, into condominiums. Councillors cited the appallingly low vacancy rate (o.5%) as one of the reasons driving their decision. Beyond that, the key factor was likely a petition presented by a Viva resident indicating that 17 residents from the 24-unit building were still opposed to the conversion and felt it would cause them significant hardship.
Council did approve the 15 Coventry Road conversion. However, the building owner, PR Investments, indicated they intended to only convert four of the building's 12 units into condos. The remaining eight would remain as rental suites, with funds raised from the sold suites going into building maintenance. Also, PR Investments indicated that they were offering all of their tenants lifetime tenancy agreements and would continue to rent out their units at below market rates. Coucillors felt that under these particular circumstances -- i.e., that the bulk of the units would remain affordable rental units -- they could in good conscience approve the conversion.
Expect more detail on the condo conversion issue in the next prairie dog.
Council did approve the 15 Coventry Road conversion. However, the building owner, PR Investments, indicated they intended to only convert four of the building's 12 units into condos. The remaining eight would remain as rental suites, with funds raised from the sold suites going into building maintenance. Also, PR Investments indicated that they were offering all of their tenants lifetime tenancy agreements and would continue to rent out their units at below market rates. Coucillors felt that under these particular circumstances -- i.e., that the bulk of the units would remain affordable rental units -- they could in good conscience approve the conversion.
Expect more detail on the condo conversion issue in the next prairie dog.
1.16.2009
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.
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.
12.11.2008
Renters Beware: Vacancies Down, Rents Up (Way Up)
The Canadian Mortgage and Housing Corporation just released their 2008 Rental Market Reports for Saskatchewan. (You'll have to subscribe to get the free pdfs.) Things are looking pretty bad for Regina.
In the Queen City, the citywide vacancy rate is presently 0.5%, which is a 10-year low. (Down from last year's already very tight 1.7%.) Zones of note include the central zone which sits at 0.5% and the university area which is a grim 0.1%.
Rental rates have increased on average by $87 a month.
Up until now, city hall has been basing its decision making on the old figures, so it'll be interesting to see how this survey changes things in the days to come. A major shift in housing strategy maybe?
On the up side, the CMHC is predicting the citywide rate to go up next year as in-migration slows, but only to 1.2%.
In Saskatoon, meanwhile, things look a tiny bit better on the vacancy front. The citywide vacancy rate increased to 1.9% this year up from 0.6% last. This was achieved, however, while rental rates shot up by $129 monthly.
In the Queen City, the citywide vacancy rate is presently 0.5%, which is a 10-year low. (Down from last year's already very tight 1.7%.) Zones of note include the central zone which sits at 0.5% and the university area which is a grim 0.1%.
Rental rates have increased on average by $87 a month.
Up until now, city hall has been basing its decision making on the old figures, so it'll be interesting to see how this survey changes things in the days to come. A major shift in housing strategy maybe?
On the up side, the CMHC is predicting the citywide rate to go up next year as in-migration slows, but only to 1.2%.
In Saskatoon, meanwhile, things look a tiny bit better on the vacancy front. The citywide vacancy rate increased to 1.9% this year up from 0.6% last. This was achieved, however, while rental rates shot up by $129 monthly.
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