Metrotown – A developer’s Heaven: By Rick McGowan

Condo towers loom over rental housing in Metrotown
Condo towers loom over rental housing in Metrotown

Metrotown is one of the fastest growing, densest areas in Canada. It includes the spectacular Central Park, Western Canada’s second largest shopping center, Metropolis, and one of the most culturally diverse neighbourhood in the nation. It is in the City of Burnaby, which was ranked by MacLeans Magazine in 2009 as the “Best Run City in Canada”.

Among the reasons that Burnaby earned the MacLeans title were the fact that Burnaby had amassed a huge financial reserve from repeated annual surpluses, and it uses the RCMP rather than a municipal force, which keeps policing costs down considerably. However, one of the factors that Burnaby faltered on was “democratic governance.” In this often overlooked criterion, Burnaby got a “D”.

A lot has happened since 2009. The reserve grew to $827,411,505 in 2014, and the City has posted a record “surprise” surplus of about  $158 million. While much of the surplus is the result of annual tax increases of between 1.5 and 3 percent, much is derived from the City’s “supplementary density bonusing” which came into effect in 2011. The change was described as a “text amendment” to an existing bylaw, but what it really meant was that developers could buy extra storeys in high rises, well beyond what the bylaws prescribed.

Protest against the demolition of rental housing in favor of new development, June 10, 2015
Protest against the demolition of rental housing in favor of new development, June 10, 2015

Higher towers equal higher profits. This alone has been enough to stimulate the high-rise condo boom we see today. While the cost of adding an additional floor does not increase, the improved view will fetch a higher price from wealthy investors.

According to the Canada Mortgage and Housing Corporation (CMHC), there were 6,425 private apartment units in the Metrotown/Central Park Zone in 2009. In 2014, that number declined to 6,158 units – a loss of 267 units. In 2014, the BC Non Profit Housing Association ranked Burnaby worst overall on its province-wide Rental Housing Index of affordability and accessibility.

Modello copyA few weeks ago, Business in Vancouver and the Vancouver Observer printed a story highlighting the important influence of speculation in Metrotown. Unlike other media reports on the influence of massive amounts of international capital on prices where realtors and governments are deliberately vague, this story had a few startling numbers

“I have 1,000 buyers looking for apartment sites,” said Ben Williams, a specialist in multi-family sales. “It is not uncommon to have 15 buyers lined up for an open house. We are seeing multiple bids.” He went on, “One buyer… paid $40 million cash for a Metrotown site.”

Clearly, there are people with a great deal of wealth – investors, developers and realtors, without any connection to this community, counting on the City to bend to their wishes and rezone these properties to maximize profits. The City has failed to protect affordable housing. It has already allowed the displacement of scores of families in the Metrotown area. They are making up the community plan on the fly.

While this story sounds pretty bleak, advocacy by the Metrotown Residents’ Association and the involvement of the Social Housing Alliance has brought attention to the issue and put pressure on the City.

The City was forced to unveil a renters’ protection plan. Under the plan, if the rezoning involves a demolition of an apartment with six or more suites, the developer will need to give tenants three months’ notice and three months’ rental compensation. This is better than the provincial legislation, which requires that tenants receive two months’ notice, and the landlord must give the tenant the equivalent of one month’s rent on or before the effective date of the notice.

In a preemptive attempt to minimize the backlash to the bad press, the City has gone to the media claiming that its hands are tied when it comes to redevelopment. This is not true. They have the power to prevent rezoning. It was this mayor and council who added the “S” (popularly known as “super-size”) provisions to the Burnaby zoning code in Burnaby town centers. This bylaw sharply increased urban land values thus increasing the profit potential in the land assembly process. It is the current council who authorizes each and every building and demolition permit, holding sole jurisdiction over the public hearings and approval process. It is this council that refuses to invest those density bonuses and other civic funds into a robust social housing program. It is the current council that pocketed tens of thousands of dollars in developer contributions for its re-election campaign in 2014.

For years Council has avoided scrutiny on this issue. But times are changing. The local press has run an editorial on Metrotown’s rental crisis and further news stories about the displacement that is occurring. There are letters to the editor questioning the City’s rezoning policies. The local MP is weighing in on the issue and calling for Statistics Canada and the CMHC to conduct a housing study, which would include data on property ownership. We need to keep up the pressure on our local leaders. This is a fight we can’t afford to lose.

Rick McGowan is a founder and chair of the Metrotown Residents Association, which is leading the struggle to STOP DEMOLITIONS in Burnaby. To get involved see the Social Housing Alliance website at http://socialhousingbc.com.

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