More than 100 tenants from four 1960 era, concrete multi-storey apartment buildings (in James Bay, Victoria, B.C.) owned by Starlight Investments. recently gathered to file formal complaints with the Residential Tenancy Branch.
Although none have received eviction notices, they have nevertheless felt the negative impact of renovations which have been going on for several years. Whether they were about asbestos abatement measures, sustained high noise and vibration levels from jackhammers, or security issues, many tenants had no option but to vacate their units; whereas others, unable to find accommodation elsewhere, stayed and faced unbearable living conditions.
Tenants seek a 50-per-cent rent reduction, retroactive to the beginning of the reconstruction, and a guarantee they will not be evicted once renovations are completed.
It is estimated that the present building occupancy rate is between 25 to 50 per cent. Rents have gone from a range of $800 (studio), $1,000 (1 BR), and $1,200 (2BR) pre-Starlight acquisition, to new renovated rental rates of $1,300 (studio), $1,500+ (1BR) and $2,000+ (2BR).
Starlight Investments currently owns: seven rental multi-family properties in the Lower Mainland, six multi-storey residential properties and a commercial property in Victoria. In December, 2015 Starlight purchased for $73.7 million the four apartment blocks in James Bay whose tenants are now contesting their rents. Last July, BC Assessment rolls indicate the value of these properties has increased to $83,7 million, this despite the fact that most of these properties are currently under renovation and only partially occupied.
In early November, 2017 Starlight Investments presented a proposal for a new three-story complex comprised of 24-units of purpose-built rental housing (studios and townhomes with terraces) on vacant land between the multi-storey Charter House and Regent Towers (two of its properties in James Bay).
This development is not surprising, given the 40 year-record of new housing starts in the Capital Region, most of which are high-end condominiums. James Bay, is becoming an exclusive enclave where one finds 34% of Vancouver Island’s highest valued residential strata properties (2018). They are assessed between one and over $6 million (many are located at 21 Dallas Road – Shoal Point and 636 Montreal Street). All are a stone’s throw away from Starlight’s existing rental properties.
A Vancouver-based urban planner recently noted that the economics of the new “build, rent, and sell” market rental units represent such an attractive cash flow and net value, that a number of municipalities are adjusting their Community Amenity Contributions to deal with the net windfall they represent to developers and stable investment opportunities for pension funds and foreign investors.
Rather than being considered an unwanted child of development, as investment vehicles, these rental projects present higher net profitability than selling as retail condos.
Interesting to note that Starlight Investments is one of Canada’s largest landlords: 24,000 multi-family units across the country most of which are under rent control valued at $4.1 billion; as well as 4.6 million square feet of commercial property across Canada and $1.1 billion assets under management, and another 11,000 multi-family units in 8 U.S. sun-belt States valued at $2.3 billion. It is currently creating a US $1.3 billion partnership with two of the largest pension funds in Canada to seek additional multi-family assets in the U.S. south, a region predominantly free of rent control.
Mile Zero Mirror 