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BC Court of Appeal upholds New West rental housing action

Court dismisses challenge of New Westminster’s right to use zoning to protect existing rental stock
Court rules: Geordie Place on 12th Street is one of six strata buildings that operated rentals for many years and took the City of New Westminster to court asking it to quash a bylaw regarding rental tenure. Photo The Record

New Westminster Mayor Patrick Johnstone is hailing a B.C. Court of Appeal decision as a win for renters across the province.

The City of New Westminster has announced the British Columbia Court of Appeal released a decision today upholding its use of the residential rental tenure zoning power. In March 2021, the Supreme Court of British Columbia upheld the same challenged bylaws, which were enacted with the intention of preserving six stratified apartment buildings, which had long been part of the city’s rental stock, as rental units.

“I’m glad the B.C. Court of Appeal has upheld the city’s residential rental tenure zoning bylaw,” Johnstone said in a news release. “The City of New Westminster has never shied away from doing what’s right to protect residents during the ongoing regional housing crisis. Protecting renters and preserving rental housing means more residents sleep secure tonight in homes they can afford.”

In July 2018, the province enacted rental tenure zoning authority to enable local governments to expand and preserve rental stock.

In January 2019, New Westminster became the first B.C. city to apply new rental residential tenure zoning to existing rental housing stock. In addition to 12 city-owned properties that could be used for future municipal housing projects, the city also applied the bylaw to six existing stratified buildings that have been operating as rental buildings for many years.

In a May 1 decision, the BC Court of Appeal dismissed the appeal.

“Nothing in the bylaw in any way contravenes or is inconsistent with the provisions of the Residential Tenancies Act, nor was it unreasonable for the City of New Westminster to consider the Local Government Act to authorize its adoption,” said the BC Court of Appeal ruling. “The chambers judge correctly dismissed the petition.”

The registered owners of all six strata properties – V.I.T Estates Ltd., VIAM Holdings Ltd., Elmwood Apartments, 0730794 B.C. Ltd., Geordie Holdings Ltd. and 0964956 B.C. – initiated legal action against the city and asked the Supreme Court of British Columbia to declare bylaw to be illegal and/or void, to impose an order quashing the bylaw and to pay costs of the legal action.

When the Supreme Court of BC ruled in the city’s favour, the building owners took the matter to the B.C. Court of Appeal.

According to the city’s press release, New Westminster sought to protect more than 200 households whose tenancies could not adequately be protected by any of the other existing legislative tools found in the Local Government Act and the Community Charter.

“The City of New Westminster has taken several bold and novel actions to protect renters and to ensure affordable housing options are available for all,” said Jackie Teed, the city’s acting director of climate action planning and development. “Today’s decision, along with previous rulings supporting the City of New Westminster’s former business regulation (rental units) bylaw, affirms that our city is a leader in advancing rental protection policy.”

Now that the city’s bylaw has been upheld by the courts, zoning amendment bylaw No. 8123 will continue residential rental tenure restrictions for six stratified rental properties. These units must remain rental-only and cannot be owner-occupied, whether wholly owned by one entity or as units that are separately sold and held by individual entities.

The city states that the court’s decision has broad-ranging implications for other municipalities, as it confirms that the residential rental zoning power may lawfully be used to preserve existing rental stock, even if the subject units are stratified.

Johnstone said the city has taken “some very bold steps” in the last couple of years to protect renters during the ongoing housing crisis, and he’s pleased with the court’s decision.

“It’s a big victory for us. And actually, it’s a victory for the region; it’s a victory for other cities who are going to be bolder now in protecting rental that’s available.”

Johnstone said the case involved purpose-built rental buildings that were already stratified.

“We were concerned they were going to get sold off as condo units, and they could be,” he said. “So we changed the rental only tenure, and they challenged us.”

Johnstone said there’s always a risk when an issue goes to court, but he was confident in the city’s case.

“You never know where the courts are going to go, and this is a little bit of new law. So it’s important that it got tested,” he said. “We knew theres was a risk, but I think we were confident that we had legal advice that we thought we were going to be fine.”

These buildings are zoned as rental and will remain that way, unless a future council decides otherwise, Johnstone said.

“Obviously, a future council could come along and change that rental tenure in the zoning if they want to. But we’ve had a long tradition in New Westminster of protecting rental property,” he said. “So now that we have the zoning bylaw that protects it, that’s going to give us one more tool in our toolbox.”