B.C. Court of Appeal upholds New Westminster's rental-only zoning bylaw

The B.C. Court of Appeal has ruled that a Metro Vancouver city's rental-only zoning bylaw will be allowed to stand, dismissing a petition from a group of developers.

In a decision released Monday, the court sided with the City of New Westminster in a dispute that has been in the courts since 2019.

The judgment concerns the city's rezoning of six apartment buildings in January 2019, using a bylaw that made it so the buildings have to remain rental-only and cannot be owner-occupied.

The six owners of the buildings, nearly all of which were corporations that "had no ability to occupy premises for residential purposes," sued the city and claimed the bylaw went beyond municipal responsibilities and was contradictory.

However, a three-judge panel disagreed with them and found the city was within its rights to impose the bylaw and rezone the buildings.

In doing so, the judgment likely set a precedent that could pose major questions for cities and renters, according to both New Westminster's mayor and the lawyer for the petitioners.

"The City of New Westminster has never shied away from doing what's right to protect residents during the ongoing regional housing crisis," Mayor Patrick Johnstone said in a statement. "Protecting renters and preserving rental housing means more residents sleep secure tonight in homes they can afford."

The city's statement goes on to say the judgment confirmed that cities' zoning power "may lawfully be used to preserve existing rental stock, even if the subject units are stratified."

Lawyer for petitioners 'disappointed'

The appeal court heard the developers' application after the B.C. Supreme Court dismissed their petition in 2021.

New Westminster's bylaw had come into force after the province had made changes to local government statutes in 2018 to allow for rental-only zoning.

At the time of the 2019 court action, New Westminster was the first municipality in the province to introduce rental-only bylaws.

The developers argued that the bylaw was contradictory, saying the Residential Tenancy Act gave landlords the right to live in their own homes, but the bylaw contravened the act by limiting the rezoned units to renters alone.

However, in the written decision, Justice Harvey Groberman wrote that the act did not establish a landlord's right to live in their property — but that it served to restrict it.

"The right of a landlord to occupy premises derives from common law incidents of ownership, not from the Residential Tenancy Act," the judgment read.

It goes on to say that landlords or their family members could only occupy a unit if the tenancy agreement was ended, and that the bylaw "augmented" the restrictions placed on landlords by the Residential Tenancy Act when it zoned units as rental-only.

Howard Shapray, the lawyer who represented the developers, said he was "disappointed" with the decision.

"I think it sets a very bad precedent," Shapray told CBC News, arguing that the bylaw had confiscated B.C. landlords' rights to live in their own property and that municipalities should compensate owners if similar bylaws went through.

"I think there's a tension there that the court didn't really deal with."

Shapray said he would be concerned as a property owner if other municipalities adopted similar bylaws.

"It's [currently] politically popular to increase rental housing and to give security of tenure to a tenant at the expense of the landlord," he said.

According to the City of New Westminster, the bylaws were passed in 2019 to protect over 200 households that weren't covered by existing renters' rights legislation.

The victory in the zoning bylaw case comes two years after the B.C. Court of Appeal upheld an anti-renoviction bylaw in the city.

When asked if the case will be taken to the Supreme Court of Canada, Shapray said it was too early to say.