Property owners say they are changing their ‘whole model,’ after eviction complaints
A group of Vancouver companies is looking to change the way they do business, a representative said this week in response to questions about their practice of buying old apartment buildings and either paying longtime tenants to leave or evicting them.
This week, as Vancouver city council considers measures to protect tenants from the practice of “renovictions” and “aggressive buyouts,” dozens of renters visited council chambers to share sometimes-painful stories, and one group of landlords was raised repeatedly.
Advocates say these cases provide a prime example of the need for tougher laws and better enforcement in a city with a near-zero vacancy rate and soaring rents.
And with Vancouver council and the B.C. government both weighing measures that could make it harder to evict tenants for renovations, a representative for these firms, which include Coltric Properties and VS Rentals, said Wednesday they are already finding it more difficult, and are “changing our whole model.”
Tuesday night at council, Valerie Farina shared the story of her 23-unit Kitsilano apartment building, called Manoa Yew, which a Coltric-related company bought in September and immediately began offering cash to tenants to entice them to leave. Green Coun. Pete Fry asked questions of Farina, seemingly surprised that out of all the complaints he’d received recently about Coltric and VS, Farina’s building wasn’t even on his radar.
“I’m adding it to my list of reports I’ve got on VS-slashColtric,” Fry said. “It’s not even on my list.”
Since September, Farina’s new landlords have offered tenants three escalating buyout offers, with the latest coming Monday night.
“It is a pleasure for us to inform all tenants. To help them in this transition be easier for you, we made a new offer,” the written offer states, before outlining what’s on offer: a $5,000 “buyout bonus,” three months’ rent, $500 for moving expenses, the security deposit returned, and a reference letter.
Farina has told the property manager she’s willing to move out temporarily to allow renovations to be carried out, so she can return afterwards, she said, but she felt she was being pressured to take the money and leave to allow a new tenant to move in.
“Their focus is completely on pushing people toward a buyout,” Farina said. “There’s just been this real push and this constant arguing to get us to leave.”
But when Postmedia News contacted VS Rentals on Wednesday, vice-president Christopher R. Evans said he planned to let Farina and other tenants know they could either stay during renovations or return afterwards.
When Postmedia passed that message along to Farina later in the day, she said: “Wow. That is completely not anything near what we’ve been told . ... Up until this point, we have not had anything other than: ‘Sooner or later, you are going to be gone.’”
While property owners often say renovations are needed to keep much of the region’s aging rental housing inhabitable, tenants’ advocates say evictions are often a tool for landlords to oust long-term residents and jack up rents to boost profits. Senior Vancouver staff suggested in a recent memo that these kinds of blanket eviction notices often follow new owners buying a building.
“The significant increase in market rents in recent years has created an environment where unit turnover can mean significant yield for owners, and low rental vacancy rates make for relative ease in finding new tenants willing to pay new, higher rents,” said a recent letter from Dan Garrison, Vancouver’s assistant director for housing policy and regulation, addressed to the B.C. government’s rental housing task force. “We hear about these cases most often when a rental property is sold to a new owner. Whereas long-term property owners typically favour maintaining stable tenancies, new owners may look to unit turnover as a way to raise revenues on a new investment.”
When the 90-year-old Manoa Yew was listed for sale earlier this year, a sales brochure said the building cleared between $170,000 and $175,000 per year in net operating income after subtracting the costs of repairs, maintenance, property taxes, insurance, utilities and elevator, and other “miscellaneous” operating costs.
The sales brochure also noted: “The roof and plumbing have already been replaced reducing capital required.”
Evans said the operating costs listed in the sales brochure didn’t include the costs of mortgage financing, which are substantial. But Evans did not dispute the other details listed in the sales brochure, such as maintenance costs and the fact the roof and plumbing had been replaced. In fact, the agent whose name is listed in the Manoa Yew sales brochure, Terrence Harding, now has an interest in the property.
Harding, who confirmed Wednesday he was the listing agent on the sale, is one of two directors of 1875 Yew Street Nominee Ltd., the B.C. company that purchased the property on Sept. 17, for $10.5 million, about $1.5 million below the brochure’s listed price of $12 million. The company’s other director, Zvonimir Duric, is a director of Coltric Properties.
Coltric, which does property acquisition, and its “sister company” VS Rentals, a property management firm, are part of a network of related companies that have acquired a number of rental properties throughout Metro Vancouver recently, Evans explained.
Part of the companies’ business model has involved, like at Manoa Yew, buying “underperforming ” buildings, improving them, and renting to new tenants at higher rents, Evans said, “but now it’s getting to a point where it’s difficult.”
“We’re changing our whole model, it’s getting tougher,” he said. “The reason is, I guess, with all the media attention, most tenants aren’t willing to leave.”
“I don’t feel good about doing what I’m doing,” Evans said. “We’re community people, we feel bad about what’s going on.”
David Hutniak, CEO of Landlord B.C. which represents the rental housing industry, said: “I personally do not know the com- panies or the principals so I cannot speak to their involvement in the industry. I will say that Landlord B.C. does not support ‘renovictions’ and doing so is certainly not industry best practices ... We are of the view that in most circumstances a landlord should not need to end a tenancy for renovations or repairs, even if doing so would be easier or perhaps slightly more economical to complete the work. Landlords who take this course of action are unnecessarily inconveniencing tenants and, frankly, harming the broader industry.”
Earlier this week, The Vancouver Sun reported that at another VS Rentals-owned building in the West End, tenants had fought their eviction notices and won a decision last month from the Residential Tenancy Branch, only to receive a second eviction notice weeks later.
Evans declined to answer how many properties the companies own. But Coun. Fry said he’s received complaints involving about a dozen Metro Vancouver buildings owned by the companies.
“It’s extremely concerning to me,” said Fry, who earlier this month introduced a motion to create a renter’s advocacy office at the City of Vancouver.
“Not to begrudge anybody making money, but we need to be fair and non-exploitative,” Fry said. The practice of renovictions appears to have been profitable in Vancouver, Fry said.