Co-op residents fear uncertain future as 41-year lease comes to an end
Residents are resigned to the possibility of rents going up with a private owner and are concerned they won’t be able to afford to stay. They’re also worried about what awaits them in the rental housing market if that’s the case.
Residents of a co-operative housing complex in north Burnaby say they’re uncertain about their future, with their lease from a private pension plan coming to an end and the buildings listed for sale.
Duncan Beaton, who’s a resident at 115 Place on Cardston Court near Lougheed, told the Beacon the majority of his neighbours are seniors who rely on the community of their co-op on a daily basis.
“There’s a lot of close friendships and a lot of stability and a great sense of security because it is a community—I like to call it an urban village. I moved in about nine years ago and it became really apparent this wasn’t just another apartment building … it’s a vibrant community.”
Beaton said some residents have lived here for upwards of 35 years. The co-op itself was established in 1980 on land leased from the Operating Engineers’ Pension Plan, IUOE Local 115, and includes 244 units.
Promises met with skepticism
On July 22, the pension plan informed the co-op’s board of directors in a letter that their lease would be expiring on Oct 31, and that it had decided in the best interest of its pensioners to list the buildings for sale.
“We have been involved in ongoing discussions with BC Housing that were initiated five years ago on the possible sale of the properties to the government agency. Unfortunately, we were unable to reach an agreement with the provincial government on a fair value for the sale of the properties to BC Housing which has left us with no choice but to pursue other avenues,” the pension plan’s administrator wrote.
“We are deeply disappointed by this outcome. Putting the buildings up for sale in the commercial real estate market is not a decision we have made lightly.”
The organization said any offers would have to include a plan from potential buyers outlining how they would limit impacts on co-op residents.
Beaton said that promise has been met with skepticism from the co-op’s community. Residents are resigned to the possibility of rents going up with a private owner and are concerned they won’t be able to afford to stay.
They’re also worried about what awaits them in the rental housing market if that’s the case. Data from rentals.ca showed that Burnaby had the 7th highest average rent for a one-bedroom unit in Canada in August, at $1,765. The average cost for a two-bedroom unit was the third highest in the country, at $2,341.
Compare that to the monthly charges at 115 Place, where you can rent a 2-bedroom corner unit for $1,227.
Institutional problem with the ‘financialization of housing’
The Co-operative Housing Federation of BC is calling on the Operating Engineers’ Pension Plan to come back to the table with the province and the City of Burnaby, and accept a “fair offer”—although association president Thom Armstrong said he had not been privy to the actual number the BC government had offered the pension plan.
“And the city needs to make it clear that if that doesn’t happen, it’ll be very, very difficult for a new owner to either redevelop the property or to increase rents in a way that would cause the economic eviction of the existing members,” Armstrong said.
In BC, landlords are not permitted to increase rent above the cost of inflation (for 2022, that’s 1.5%) and can only increase rent once a year. But that policy doesn’t apply to residents of housing co-operatives.
Neither does the city’s tenant assistance policy, which grants tenants the right to return to a building that’s been redeveloped with the same rent and the same number of bedrooms.
For its part, the Operating Engineers’ Pension Plan said the co-op federation’s communications are based on factual errors and are contributing to making residents feel more anxious about their future. It said it plans to continue working with the municipal and provincial governments to look at various options to sustain housing affordability in the region.
“Our foremost priority remains the fair and respectful treatment of the building’s residents throughout the sale process … we will not entertain offers from prospective purchasers without assurance there will be no evictions or renovictions,” a spokesperson told the Beacon in an email.
“It is not within our mandate as a pension plan to hold investments in perpetuity. We have a fiduciary duty to our pensioners and beneficiaries so that we can continue to sustain present and future pensions for our members.”
Armstrong sees that fiduciary duty as a huge, institutional problem with “the financialization of housing”.
“When housing is treated as an investment that’s meant to deliver a return to an investment portfolio, rather than homes for real people that rents and housing charges they can afford, this is the inevitable consequence,” he said.
‘Nowhere to go’
No matter what happens with 115 Place, the co-op federation will be right back at the same corner this time next year in the Metrotown neighbourhood.
Another co-op called Post 83 will see its lease come to an end exactly 1 year after 115 Place’s lease is terminated. That land, situated on Mayberry St between Patterson Ave and Willingdon Ave, is also owned by the Operating Engineers’ Pension Plan.
“So together, the two co-ops represent 421 homes, many of them low- and fixed-income seniors, low- and fixed-income families, and they will simply have nowhere to go if their rents are increased by anything close to market levels,” Armstrong said.
Meanwhile, Beaton said, residents of 115 Place are worried that they’ll soon be dispersed away from the place they’ve called home.
“The real strain is that some people here, we’re not sure they would handle the transition at all. It’s the breakup of a community, not just the selling of a building. And that’s really the core of it. People are afraid, just literally afraid.”