Vancouver offers to extend leases to residents of 13 buildings in False Creek South

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After years of uncertainty, the owners of 13 strata leasehold buildings in Vancouver’s False Creek South neighbourhood have been offered extensions on their leases with the city.

The local government is offering an additional 20 years on top of the existing leases, which is shorter than the 99-year leases the owners had originally requested – but at least they’re on the path, as one False Creek South resident put it.

City council and the board members of the Strata Leaseholders Society, which is the bargaining agent for the majority of strata leaseholders that formed in 2018, are in support of the extension offer, which is part of a lease renewal package for the stratas on city-owned land.

There are 669 leases for the 13 strata residences that sit along the False Creek shoreline, between Cambie and Burrard Street bridges. The society members will vote on the package on Sept. 21. If the group’s members accept the proposal, then a modified lease that includes the 20-year extension would be offered to the 669 strata leasehold owners who could individually choose to take it or leave it.

Society chair Richard Marchant said his group has been working all year on the proposal after negotiations started with the city staff last fall.

“What’s really important is that we have a proposal in front of us, and that the board of directors for the society supports it, and city council supports it,” he said. “That is a really important step forward from what has been a lengthy process. When you watch the years tick down it’s hard.”

The leases started in the 1970s when the community was built out and most have a term of 60 years. Modern-day leaseholds generally have 99-year terms. Depending on the strata building, the current leases end in 2036, 2040 and 2046, and the offer would add another 20 years onto their lease terms.

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Leasehold owners would pay a lump-sum rent prepayment based on calculated land values, which are part of the negotiations. However, some leaseholders are disputing the land value calculations and the prepayment amounts in a dispute that largely focuses on how the city is calculating floor area.

Cameron Fast, council president for the strata at 658 Leg in Boot Square, wrote a letter to the city to dispute the city floor area calculation. He claims the calculation for payments for each owner in his strata will be, on average, $12,000 more than what they should be paying.

“This is a substantial amount of money for the owners,” he writes.

Robert Renger, a society director, argues that the city’s calculations would overcharge two stratas by an average of $12,000 per unit, while two other stratas would see over-charges of $5,000 and $7,000 on average.

The city did not respond to questions about the dispute over the prepayments.

More than 20 years ago, there was a similar dispute over floor area calculation. In that case, the city eventually paid refunds to 35 leaseholders. Mr. Renger, a former senior planner for the city of Burnaby who has lived in False Creek South since the 1980s, was involved in the original dispute and believes a similar miscalculation has occurred.

The city declined to comment on specifics of the package, which it said in an e-mailed statement was “the result of mutually agreed negotiations with the strata lessees’ negotiation team.”

False Creek South is former industrial land that was acquired by the city and redeveloped in the 1970s as a mix of affordable housing types, including rental co-ops, leasehold strata, non-market rentals and some social housing. The apartments and townhouses have long been a mix of one-third low income, one-third middle income and one-third higher income.

The neighbourhood is targeted for more density and residents have banded together to come up with a plan to add significant infill and population growth, called RePlan. However, the city released its own plan last year to boost market housing and tear down a lot of the existing affordable housing and relocate it to the busy arterial along 6th Avenue, away from the shoreline. That plan received significant community opposition and council rejected it in favour of something more in line with False Creek South’s spirit of affordability and community. Staff is expected to report back to council in early 2023.

But for the stratas and the co-ops, life has felt precarious as the end of their leases approach without renewals. Lease agreements are necessary in order to obtain affordable mortgages and to borrow money to do repairs. The majority of rental co-ops are still without extensions, and many of them expire between 2036 and 2037.

The co-ops have been watching their leasehold strata neighbours work out a deal and they hope this might be a sign that they, too, will obtain extensions. But for many years, the future of the neighbourhood has been up in the air, and the city’s original plan released last fall showed that the co-ops would be torn down and redeveloped. It remains to be seen what the city will plan for them next. Complicating the matter is that the city is both landlord and land-use planner, which has made lease renewals a complicated issue that’s dragged on for years.

The stratas “have a path now – maybe not as long as people wanted, but it’s clarity,” said Nancy Hannum, co-chair of the Co-op Committee of False Creek South Neighbourhood Association’s RePlan. “We don’t have that.”

Ms. Hannum said there are five co-op buildings awaiting renewals, and until then, they have an uncertain future.

“All of us in False Creek wanted extensions of the co-op leases for the life of the building because they are affordable,” said Ms. Hannum. “What we have been told is our housing is going to be displaced for more stratas, and new stratas can be built because they are feasible, whereas non-profit housing is dependent on significant sources of government funding. That’s really high risk for the city, to risk this affordable housing.”

If they could also obtain 20-year extensions, that would bring the co-ops with 40-year leases to 60 years, and the 60-year lease co-ops to a total of 80 years.

“That seems reasonable. It would maintain the housing for at least another 20 to 40 years, and offer good affordable housing, with family sized units.”

The city said in its statement that it had been working on a citywide co-op lease renewal framework that was approved by council in 2021. Co-ops with imminent expiries are a top priority, the city said, pointing to plans to begin negotiations with one False Creek South co-op that has a lease expiring in 2024.

“The remaining co-op leases in False Creek South expire in 2036 or later, and all lease negotiations will be considered in alignment with plans to redevelop False Creek South as they are formed,” said the statement.

Ms. Hannum knows the future challenge will be maintaining the existing tight-knit community, which is more than half non-market housing, including the co-ops.

“That’s the fight that’s going to happen under the planning process, and that’s what we are gearing up for,” says Ms. Hannum, who is a retired librarian. “We know we have to be prepared to have that discussion.

“I’m not opposed to new buildings along 6th Avenue. What I’m opposed to is ripping apart the community and ripping apart affordable housing. Why not work with these buildings that are so viable and the existing communities? These are well-managed co-ops, 40 years of good management. Why not work with that?”

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