By V Adams

The 13-storey Harbour Towers Hotel (345 Quebec Street), built more than four decades ago as an apartment complex and subsequently converted to a hotel, was sold for $23 million in 2015 to a Vancouver-based property investment group. The new owners haven’t decided whether to continue operating it as a hotel or convert it to a ‘market rental’ residential property.

Omicron, the owner’s architectural consultant for the proposed residential repurposing project, provided limited details at a public meeting last week, following two meetings with the City and the JBNA Executive, but did indicate:

  • an increase in the number of units from 196 to 219 comprised of studio, 1-bedroom, 1.5-bedroom, 2-bedroom and 2-level penthouse suites (ranging in size from 285 sq. ft to 1,310 sq. ft.);
  • retention of the pool and gym;
  • construction of a new landscaped courtyard, and retention of 179 parking stalls;
  • installation of 219 bike racks and storage facilities.

The consultant indicated that the structure would be gutted and upgraded electrical, mechanical and plumbing systems installed. Seismic upgrading is not planned as the BC Building Code upgrading for seismic applies only to change of use or new construction.  

While the project is being touted as a major contribution to expanding rental accommodation pool in the city, no information was provided on the proposed target demographic for these units – families, working people, seniors etc.

Given its location in the ‘transient hotel accommodation’ zone adjacent to the Inner Harbour ferry terminals for the Coho, Victoria Clipper to the US and Riverside Marine’s new V2V fast-ferry service to Vancouver, this facility can serve short-term vacationers, extended-stay corporate users, overseas students, or well-heeled retirees.

In light of the fast growing and highly profitable short-term vacation rental business, condo owners and real estate investors see the value of this asset as a cash-cow commodity which can easily be marketed to the highest bidder, most likely tourists and short-term high-income occupants.

Just as the Harbour Towers currently markets itself as an “upscale full-service facility with amenities”, it is likely to seek the same high-end market segment in terms of short-term or longer-term occupants.

In a tight rental market, where vacancy rates are near zero, there is a now growing trend among residential property landlords toward offering only “fixed-term leases”.  Prospective tenants are often obliged to accept such a lease knowing that at the end date of the lease, they must move out or accept the terms of a new lease – usually a hefty increase in rent well above the restricted annual rent increase permitted in month-to-month tenancy agreements. Note: British Columbia’s maximum residential rental rate, (reflecting rising utility rates and property taxes), will jump to 3.7 percent on January 1, 2017, a 28 per cent surge in this year’s limit of 2.9 percent.

In the absence of any legislation to the contrary, landlords can ‘game the system’ by flipping over leases in order to raise the rent.  While this may be legal, such a business practice on the part of enterprising landlords has little to do with providing necessary and affordable shelter for the vast majority of residents.

The Community Social Planning Council’s Capital Regional Housing Gap Analysis & Data Book published in 2015, pointed out the mismatch between the cost of available housing and household income disparity. Less than 14 percent of homes in Victoria are affordable for 50 percent of its households, i.e. only 22,000 units are priced at 30 percent of the gross income of the city’s 79,000 households.

Upper income groups (those with an annual household income of more than $60,000) represent about half of Victoria’s population. Moderate to high-income housing supply represents 86 percent of all residential units. Therein lies the “sweet spot” for developers to cater to the top end of the market, (see “The quest for affordable housing”, p. 4, Focus Magazine, September, 2016).

It is unlikely that 600 long-term tenants being displaced from Starlight’s “renovated” premium rental towers in James Bay, and other upgraded properties across the city will find affordable rental accommodations at the new Harbour Towers complex.

Those who spoke in favor of the Harbour Towers hotel conversion at the recent public meeting were largely single family and condo private property owners. They represent 30 per cent of James Bay residents whose primary concern is to enhance and protect the value of their real estate assets.

However, the majority of James Bay households, many of whom are seniors, try with great difficulty to retain a roof over their heads in the face of soaring land values compounded by ever-increasing living costs. As the gap between the “haves” and “have-nots” increases with each passing day, this densely-populated exclusive enclave favors the privileged and powerful over people of modest means.