Strong renter protections make it harder to redevelop where there's displacement

This is an explicit goal of the Broadway Plan

The Broadway Plan requires that all rental high-rises have to include 20% below-market rentals, with the market rentals cross-subsidizing the below-market rentals. There’s a lot of renters living in low-rise rental buildings in the Broadway area, built back in the 1960s and 1970s, and planners wanted to make sure that they’re protected and don’t end up getting displaced (as happened at Metrotown before 2018). That would be really hard to do if all the cheaper rentals are replaced with new, more expensive rentals.

To summarize the renter protections: a project that replaces a low-rise rental building with a new high-rise has to include 20% below-market apartments, it has to cover any increase in rent while people are living in interim housing, and when the new building is complete they have to be able to return at their previous rent (plus any legal annual increases) as if they never left.

The plan is designed to make it harder to build housing where there’s displacement of renters, and make it easier to build housing where there’s little or no displacement.

From the Broadway Plan staff report, page 23:

In the RM districts [multifamily zoned with existing older low-rise rental buildings], the pace of development will likely be modest as a relatively small share of existing buildings in these areas will be financially viable for redevelopment to rental (with 20% below market) at the densities envisioned in the Plan. Constraints include:

• Most of the RM properties have a high value under existing use so many will not be financially attractive for redevelopment.

• The required below market units have a low value in comparison to creation costs.

• Rental development with below market rental units is unlikely to be viable at the eastern end of Plan area, so any development will likely be focused to the west.

• The enhanced tenant protection approach proposed for the Plan area creates additional complexity, uncertainty, and risk for developers.

The additional expense, complexity, uncertainty, and risk aren’t a bug, they’re a feature.

More

• Protecting renters in the Broadway Plan area, from June 2022

• CityDuo on Twitter: “Rumours are flying that some on city council will try to eliminate the Broadway Plan’s enhanced tenant protections (TRPP) on December 11th. This goes far further than the planned updates by city staff, & has made many in the development industry uncomfortable.” If ABC tries to do this, they’re going to run into a firestorm of opposition, including from pro-housing people. For the many renters in older low-rise rental buildings in the Broadway corridor, there’s a big difference between getting an apartment that’s smaller but brand-new, and being displaced with nowhere to go.