It is no surprise that housing affordability in British Columbia is in a state of crisis, despite the efforts made by the provincial and local governments to address the problem. This is why we in the Housing Research Collaborative (HRC) are constantly exploring new tools and methods to alleviate the housing situation.
As part of our efforts to find new solutions, we organized a workshop to discuss a new zoning tool called Residential Rental Tenure Zoning (RRTZ). The event had the participation of representatives from provincial and local government agencies, civic organizations, advocacy groups, private developers, independent consultants, and development industry representatives which helped us capture a broader understanding of the tool.
BUT, WHAT IS RRTZ?
Our panelist, Naomi Reichstein, explained that it is a type of zoning aimed to preserve the existing rental stock and to enable new rental supply. It can be implemented in different scales: to entire sites, individual buildings in those sites, and even to portions of units of a building. The tool can be applied to existing properties as a result of the local government’s initiative, or to new constructions driven by the applicant’s initiative.
RRTZ has some limitations. Contracts or regulations cannot specify the type of tenant or the value of the rent and it is also unable to prevent demolitions or address affordability in the housing market by itself.
We learned that some cities in the province are already using this tool. Senior Planner for the City of Victoria, Robert Batallas, talked about the City’s approach to implementing RRTZ in Victoria in the second presentation.
The last panelist was David Sander, Hollyburn Properties Director who represented Landlord BC introduced a property developer’s perspectives on the application of RRTZ and other tools to encourage new residential rental development.
WHAT ARE THE BENEFITS OF RRTZ?
Some of the benefits perceived by participants were as follows:
• RRTZ is good for non-profit housing groups and could be effective in publicly owned land.
• It can reduce uncertainty for developers if implemented through pre-zoning.
• It can improve the consistency around governmental decisions regarding housing development.
• It could provide an opportunity for commercial properties to incorporate residential rental by providing an opportunity for developers and business owners to diversify their portfolios.
• It is flexible to some degree.
• RRTZ has the potential to be successful if used in the planning process of a predominantly single-family area or in master-planned communities.
• Pre-zoning could be an appropriate way to implement RRTZ if it is introduced in the planning phase during community engagement.
It is fair to say that, for the participants, RRTZ has limited benefits and few clear beneficiaries. One key benefit worth noting is its potential to improve the relationship between government and stakeholders by reducing uncertainty and improving consistency in decision-making regarding affordable housing policies.
BUT, HOW ABOUT ITS DRAWBACKS?
In general, there was a common sentiment that RRTZ was redundant as the existing regulations and policies currently aimed to preserve rentals were effective. Some of the drawbacks identified are as follows:
- The tool was perceived as top-down, heavy-handed government action.
- It can lead to difficult and costly legal proceedings if it infringed on property rights (should property owners be subject to a ‘downzoning’ by only allowing rental).
- Generally, rentals need more financial incentives because they are often not profitable enough for developers.
- RRTZ could impact property values.
- It can scare developers away, encouraging sprawl elsewhere.
- The tool limits the flexibility needed for future market changes on the tenancy preferences or capacities of the citizens.
- The mixture of tenures creates complexity, especially if there are multiple owners or managers for each type of tenure.
- It could also have an impact on legal non-conforming buildings. In the case of catastrophic loss like earthquakes or fires, RRTZ would keep them from immediately going through a redevelopment permit process.
WOULD IT BE POSSIBLE TO IMPLEMENT IT?
To make RRTZ a feasible tool, it would need to get support from the many sectors involved in land development. Therefore, after discussing the benefits and drawbacks, as well as a long discussion about what public engagement for RRTZ would entail, we asked participants to identify the conditions under which they would support the implementation of this tool. In response, they pointed out the following conditions.
- If density incentives were included in the zoning/pre-zoning stages to create an appealing and obvious package from the beginning.
- If much of the information mentioned above were available.
- If it started in master-planned communities or local area planning processes.
- If it had sufficient public consultation.
- If it includes or allows housing agreements.
- If it was applied to city-owned properties.
Under these conditions, it would be very difficult to effectively implement RRTZ.
WHAT DID WE LEARN?
For many participants, RRTZ did not seem to be the right tool to address the housing crisis, and although it looks promising under particular circumstances, it adds another layer of complexity and difficulty for developing projects without actually introducing new solutions that can’t already be delivered through housing agreements and pre-zoning. Additionally, the list of possible unintended consequences overshadows the list of clear benefits and beneficiaries.
So, is rental zoning the key to solving the housing crisis in BC? the answer is probably not, at least for now.
You can read the complete report of this event in the following link “Residential Rental Tenure Zoning (RRTZ) in the Capital Region“