ADMINISTRATIVE REPORT Date: February 12, 1997 Dept. File No. GL C.C. File: 5311-1 TO: Vancouver City Council FROM: Director of Land Use and Development SUBJECT: Strata Title Conversion: 2036 York Avenue RECOMMENDATION THAT the application to convert the previously-occupied building at 2036 York Avenue (Lot F, Block 205, D.L. 526, Plan LMP10255) to strata title ownership be approved in principle, but that pursuant to Section 9(1) of the Condominium Act, the Certificate of Approval (Form 10) shall not be issued unless the following conditions have been met within one year of the date of this approval: A. Completion of all work required by the City Building Inspector, under the required permits, at no cost to the City, and issuance of an Occupancy Permit, in order that this previously-occupied building substantially complies with all relevant by-laws; and B. Execution of a Section 215 covenant, to be registered concurrently with the strata plan, prepared to the satisfaction of the Director of Legal Services, to serve notice on title regarding the uncertainty of site redevelopment. GENERAL MANAGER'S COMMENTS The General Manager of Community Services RECOMMENDS of approval of the foregoing. COUNCIL POLICY Council policy is reflected in the City s Strata Title and Cooperative Conversion Guidelines, which outline factors Council will consider in reviewing applications for converting previously-occupied buildings to strata title or cooperative ownership. PURPOSE Council approval is required for an application to convert the previously-occupied building at 2036 York Avenue (Lot F, Block 205, D.L. 526, Plan LMP10255) to strata title ownership. BACKGROUND The site is zoned RM-4 and is developed with a four-storey multiple dwelling building constructed ca. 1930, which is currently being altered under Development Permit Nos. DE214419 and DE401432 and Building Permit No. BU321255 to contain 20 dwelling units. The building is non-conforming with respect to the floor space ratio regulations of the RM-4 District Schedule. Prior to issuance of the permits and commencement of the renovations, the approved use for the building was as a multiple dwelling containing 15 dwelling units. The current owner purchased this property in December, 1996. Although the previous owner, and original applicant for this strata title conversion, indicated that notices to vacate were issued to existing tenants in November, 1992, a Permits and Licenses Department inspection report for the site dated July 16, 1992, indicates that tenants were given eviction notices effective September 30, 1992. A subsequent inspection in early October indicated that the building was vacant and that the interior of the building was being gutted. Since this demolition work was being done without permit, a Stop Work notice was posted on October 7, 1992. The building sat empty until the renovation work began in the summer of 1993, following issuance of a partial building permit for excavation, foundation and structural work. The building has remained vacant since that time. City records substantiate the previous owner s claim that the building was in a state of disrepair at that time and required substantial renovations. File records detail a long history of Standards of Maintenance By-law deficiencies and numerous Electrical and Building By-law contraventions. Further, in April, 1992, the District Property Use Inspector found that the building had been effectively converted to provide for 2 dwelling units, 13 housekeeping units and 33 sleeping units without permit, in contravention of the Zoning and Development and Vancouver Building By-laws. The site location is shown below in Figure 1. Figure 1 DISCUSSION Section 9(2) of the Condominium Act states that Council shall not approve the conversion unless the building substantially complies with applicable City by-laws. In this case, the RM-4 District Schedule allows for multiple dwellings as an outright use on sites which exceed 550 m2 (the area of Lot F is approximately 647 m2). However, the floor space ratio (FSR) of the existing building is approximately 2.35, which exceeds the maximum FSR of 1.45 for multiple dwellings, as contained in the District Schedule. Therefore, there is some uncertainty as to whether twenty dwelling units at the existing density could necessarily be redeveloped under the RM-4 District Schedule, should this building be extensively damaged or destroyed by fire, although the Board of Variance would have jurisdiction. It is doubtful that the market would be cognizant of the uncertainty of redevelopment in these situations. There is no indication of unit prices reflecting this uncertainty. In 1984, in considering an application to convert a 3-unit multiple conversion dwelling in the RS-2 Zoning District (the District Schedule conditionally permitted 2 units), Council opted to approve the conversion subject to a Section 215 covenant being registered against title of the property, advising prospective purchasers of the redevelopment uncertainty. STAFF ANALYSIS In addition to Planning Department staff, the City Engineer, the City Building Inspector and the Manager of the Housing Centre have reviewed this application. The City Engineer has no dedication or servicing requirements for this site. The City Engineer advises, however, that the building encroaches onto the lane abutting this site. Registration of a volumetric easement to contain the encroachment will be required prior to the strata plan being deposited in the Land Title Office. This requirement will be addressed in a concurrent report to Council from the City Engineer. The City Building Inspector reports that when all work has been completed in accordance with the approved plans and permits and an Occupancy Permit has been issued, the building will substantially comply with all relevant City by-laws. The Manager of the Housing Centre reports as follows: "The situation of an owner vacating a rental building and then seeking approval to convert to strata is a matter of real concern. The (strata title conversion) guidelines are intended to ensure that the interests of the tenants are addressed. This is clearly not possible if the tenants have been evicted before the application is made. Normally in these circumstances, the Manager of the Housing Centre would recommend that the applicant be required to make a contribution to the City s Affordable Housing Fund to compensate for the inadequate process. However, given the time that the building has sat vacant, it is doubtful that the former applicant deliberately abused the approval process. It would be unreasonable to penalize the current applicant who has only recently purchased the building. Therefore, the Manager of the Housing Centre is prepared to forego requiring a financial contribution. The latest CMHC rental survey (October, 1996) indicated a vacancy rate of 0.4% in Kitsilano. A vacancy rate of 2% is considered the minimum desired to ensure a balance of supply and demand. Over the past year, there have been 21 residential rental units converted to strata title ownership, only 5 of which were in the Kitsilano area. Although the loss of purpose-built market rental housing in the City has been low, very little purpose-built rental is being built today; most new rental stock consists of condominiums, many of which are rented at some risk of being sold to owner-occupiers and hence less secure. The proposal would increase the housing stock from 15 to 20 units. If the conversion is not approved, it is possible that the applicant would demolish the building and develop the site with new condominiums that would be more expensive than the renovated condominiums. The Manager of the Housing Centre is prepared to support the proposed conversion, but notes the continuing need to monitor the loss of the purpose built market rental stock." CONCLUSION Based on the foregoing, and on the applicant s compliance with the City s Strata Title and Cooperative Conversion Guidelines, the Director of Land Use and Development supports this application. * * * * *