Description

Vancouver city council votes unanimously to authorize the expropriation of the long-neglected Balmoral and Regent Hotels in the Downtown Eastside.

Significance

This was the first time the city has expropriated a property for housing, Deputy City Manager Paul Mochrie said, calling the move “a very extraordinary response to a unique set of circumstances.”

Bringing the buildings under public ownership also was seen as a way to create new low-income housing in the Downtown Eastside.

“The stated purpose for the expropriations was ‘the provision of housing accommodation and the improvement or rehabilitation of areas which have become blighted or substandard areas’,” a staff report said.

The hotels, at 159 East Hastings (Balmoral) and 160 East Hastings (Regent), fall under the Downtown Eastside  plan, which calls for options for increased options for affordable housing and improvement of housing units at the welfare shelter rate.

Background

Council’s unanimous decision on Nov. 6, 2019  to approve expropriation of the hotels, under B.C.’s Expropriation Act,  came after the city attempted unsuccessfully to have the owners improve the properties, which had been considered neglected for years.  Section 532 of the Vancouver Charter provides for the city to expropriate a property if it has been unable to come to an agreement with the owners on the terms of acquiring it.

The buildings were constantly faced with hundreds of city charges for poor standards of maintenance, unstable condition, fire and safety violations and health-related issues. In 2016, the Balmoral was at the top of the city’s list of the 10 worst single-room occupancy hotels, and the Regent was number 2.

The hotels also generated hundreds of calls to police, firefighters and ambulance with reports of intruders, sudden deaths, mental-health concerns, warrants, disturbances suspicious circumstances and abandoned 911 calls. Police statistics showed 845 calls to the Regent Hotel alone between Jan. 1, 2017 and Feb. 22, 2018, The Courier reported.

After repeated attempts to have the buildings’ owners, the Sahota family, bring the hotels to standard and safe condition, Vancouver’s chief building officer in June, 2017 ordered removal of occupancy permits and closure of the buildings for building-code deficiencies and health and safety issues after they were determined to be unfit for occupancy. 

The Balmoral was ordered closed in July, 2017 and the Regent in June 2018. More than 300 low-income residents moved to safer housing, with the help of BC Housing.

Council subsequently authorized the city’s general manager of real estate to negotiate purchase of the buildings with their owners and to report back to council if unsuccessful. The city was unable to negotiate purchase of the buildings in  July, 2018 and moved to expropriate. That same month, a Vancouver charity unsuccessfully made an unsolicited offer for both hotels, conditional on the city dropping expropriation plans.

In August, 2018, the hotels’ owners asked for a court inquiry under the Expropriation Act, saying the city had failed to negotiate in good faith, but later withdrew the request. A number of city bylaw charges against the owners were settled in November, 2018 with payment of a $150,000 fine plus $25,000 to two Downtown Eastside charities.

After council voted to expropriate, city staff were directed to compensate the hotels’ owners $1 per building, with $1,000 towards the lease for the owner of the Regent Pub. The owners were given one year for a court challenge of the validity of the expropriation and the payment.

Council also earmarked $700,000 — $350,000 for each hotel — from the 2018 capital budget for non-market rental for security, including on-site and mobile patrols, building hardware and security systems.

The nine-storey Balmoral Hotel was built in 1912 and contained 171 single-room occupancy unit. The eight-storey Regent Hotel was built around 1913 and had 161 SRO units and a pub. Each hotel had an assessed value of about $3.2 million at the time of closure, although they were assessed much higher while they were still collecting rents. The Globe and Mail reported that the Regent had an assessed value of $12.2 million before it was closed.

Sources

Report to Council: https://council.vancouver.ca/20191106/documents/cfsc2.pdf

Presentation to Council: https://council.vancouver.ca/20191106/documents/cfsc2presentation.pdf

Vancouver will expropriate Balmoral and Regent Hotels, News1130, Nov. 6, 2019. https://www.citynews1130.com/2019/11/06/vancouver-expropriate-balmoral-regent-hotels/

 Vancouver charity makes offer for shuttered, Sahota-owned Regent and Balmoral Hotels, The Globe and Mail, July 15, 2019. https://www.theglobeandmail.com/canada/british-columbia/article-heritage-charitable-foundation-makes-offer-for-shuttered-regent

Police respond to 845 calls in 14 months to Downtown Eastside hotel, Vancouver Courier, April 6, 2018. https://www.vancourier.com/news/police-respond-to-845-calls-in-14-months-to-downtown-eastside-hotel-1.23258619

Prepared by: Karenn Krangle, VCP Commissioner
Last Updated: November 27, 2019