B.C. government to give cities power to create rental-only zoning, cracks down on presale flipping

Local governments in B.C. could soon have the power to zone areas for rental housing. 

Municipal Affairs Minister Selina Robinson introduced the Local Government Statutes (Residential Rental Tenure Zoning) Amendment Act in the legislature Tuesday, which would give municipalities the following powers:

• Zone undeveloped land for rental housing, or mandate a certain percentage of units on the land be rental.
• Force existing rental properties to remain rental only after redevelopment.

The changes were promised by the government in February's budget, as part of its 30-point housing plan.

"We are committed to ensuring that local governments have the supports, the resources and information they require to decide how they can best address the housing needs in their community," said Robinson. 

However, municipalities can choose not to use the new zoning tools, or only mandate a small percentage of units in rental areas actually be rentals. 

"Local governments have to have autonomy. What might work here in Victoria might not work in Merritt," said Robinson. 

"They're facing this housing affordability crisis along with us ... so I expect local government will continue to work [with us] in making sure there's the kind of housing people need."

Cracking down on flipping of presales

The government also brought forward two other pieces of legislation on Tuesday related to housing.

One amends the Real Estate Development Marketing Act, forcing real estate developers to report when a condo unit is flipped prior to the completion of construction, and allowing the Office of the Superintendent of Real Estate to investigate if there is evidence that such information is not being disclosed.

Penalties have also been increased by more than 1,000 per cent — up to $250,000 fines for individuals and $500,000 for corporations not complying with a requirement. If criminal charges are laid, fines will be up to $1.25 million for individuals or corporations in a first conviction, and up to $2.5 million for a second conviction.  

"It will be significant. We know how important it is, and that British Columbians expect that everyone pay their fair share of taxes, and if someone is avoiding their taxes ... on a condo presale on a contract flip, then they're not following the law," said finance minister Carole James. 

The final bill will force municipalities to put out a report on housing needs every five years to help with community planning. The government is providing $5 million over the next three years to assist with the data collection. 

Will take time for impact 

Victoria Mayor Lisa Helps said she was optimistic the changes to rental zoning would spur action. 

"I think this will also be welcomed by the development community interested already in building rental housing," she said.  

"They know if they build on that land, and they build rental, they don't have to jump through any hoops, they just have to get their shovels in the ground."

Urban Development Institute CEO Anne McMullin agreed, and was generally complimentary of the multiple pieces of new legislation. But she cautioned that the onus was on municipal governments to quickly prezone for rental — and said permitting times in many cities was onerous for a type of housing that generates less revenue than condominiums. 

"We've got to work through this quickly. It can take four to five years to approve projects in the City of Vancouver, and then it's got to get built. So we're eight, 10, 12 years from any relief, so we've got to move fast."