Limits on rent increases for private SROs have been approved by the Vancouver City Council

Vancouver Island

Vancouver City Council has approved new protections for privately operated single room occupancy (SRO) hotels and the affordability of the units.

After being asked by city council to address substantial rent spikes by investors who acquire SRO buildings and then conduct modest modifications, city administration suggested the new regulations agreed on Thursday. Such purchases are considered speculative in nature, as they profit from the market revenue generated by ground-level retail and restaurant areas.

SROs are one of the key housing supply tenures for low-income and vulnerable residents, and are primarily found in and near the Downtown Eastside, as well as a pocket within the Granville Entertainment District.

Rooms that now rent for more than $500 per month can only increase at a rate of around 2% each year under the new restrictions. Additionally, rooms that rent for less than $500 per month can now only increase at the rate of inflation plus an additional 5%, for a total increase restriction of nearly 7%.

Rents for rooms that rent for less than $375 per month — the present shelter component of income assistance — could be raised to $375.

Additionally, the measures allow for the possibility of additional rent relaxation on a case-by-case basis to fund renovations and upgrades of vital building services as well as “exceptional operating costs.” The goal of this regulation is to allow SRO building owners to apply to the municipal government for a rent relaxation between leases after obtaining approval from the provincial government’s Residential Tenancy Branch to raise rents on the building’s tenanted rooms.

Many SROs are housed in buildings that are over a century old, making it difficult for private owners to modernize without additional revenue from rent or government subsidies.

SRO owners will be forced to provide rent rolls as part of their business licence renewal in the future so that the municipal government can monitor and enforce the rent increase regulations.

The approved measures also include $500,000 in annual municipal money to support the city’s monitoring and enforcement operations, which will be carried out by three full-time employees. In 2022, this will include a $125,000 planner and two $200,000 compliance officers for SROs, as well as $160,000 for community involvement and education and $15,000 for legal and IT implementation support.

This is considered a “stopgap” strategy by the local government, which hopes to eventually replace all SROs with self-contained social housing. The city council established a long-term strategy in October 2020 to acquire and secure up to 105 privately held SRO buildings for use as secured social housing. Around 2,500 rooms would be refurbished or transformed into social housing, while roughly 1,300 private owners would be given help to improve the physical condition of their properties and ensure affordability. All of this, however, is contingent on a partnership between the provincial and federal governments, as the acquisition of private assets alone is anticipated to cost $1 billion.

Many SROs are housed in 100-year-old heritage buildings that may be too expensive to renovate for private owners. Private investors have increasingly increased their purchases of SROs in advantageous areas, either for speculative purposes or to maximise earnings from the commercial or retail space.

In 2019, the downtown Vancouver peninsula has 6,681 open SRO rooms, with 55 percent of them privately owned and 45 percent owned and administered by the government or a non-profit. There were also approximately 700 rooms that were now closed across ten buildings.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts