Latest assessments reveal 2 Vancouver SRO hotels dropped millions in value
Published Wednesday, January 6, 2021 6:25AM PST
The Balmoral Hotel is seen in Vancouver on Monday, July 30, 2018.
VANCOUVER -- BC Assessment records show two of Vancouver's most neglected single-room occupancy hotels joined other Downtown Eastside SRO hotel buildings in losing value in 2020.
The Balmoral and Regent hotels lost millions in value after the City of Vancouver deemed them unfit to occupy with orders that came in 2017 for the Balmoral and in 2018 for the Regent. Both buildings had been deteriorating for years.
After starting a process to expropriate the buildings from their owners, the Sahota family, the city bought them both in November for $11.5 million, according to a source with knowledge of the transaction. The 2021 assessment puts their value at $5.1 million. The city intends to redevelop the buildings into social housing.
The two buildings' value fluctuated wildly after the city ordered them emptied.
In 2018, a year after the Balmoral was ordered to close, the assessed value dropped 73 per cent, to $2.6 million in 2018 from $10 million in 2017.
The Regent's value dropped 74 per cent between 2018 and 2019, to $3.1 million in 2019 from $12 million in 2018.
In 2019, the Balmoral was valued at $3.2 million and in 2020 at $3.39 million. But the 2021 valuation for the Balmoral is $2.6 million, down 23 per cent from last year. (BC Assessment's 2021 assessments are based on property values as of July 1, 2020.)
The Regent was valued at $3.3 million in 2020, but that has fallen to $2.5 million for 2021 - like the Balmoral, a 23-per-cent drop.
Other single-room occupancy hotel buildings in the Downtown Eastside also lost value this year. Many of the buildings saw valuations rise until 2019 but dropped in value in 2020 and 2021.
For instance, the Brandiz, a privately-owned SRO hotel on the same East Hastings block as the Regent, is valued at $10.1 million, down from $11.9 million in 2019. The West Hotel at 488 Carrall St., the Empress at 235 East Hastings St. and the Afton at 249 East Hastings St. have experienced similar drops in assessed value.
The Sahotas still own three other SRO buildings: the Astoria at 769 East Hastings St., the Cobalt at 917 Main St. and the Regal at 1046 Granville St.
After peaking at $8.7 million in 2019, the Astoria is now worth $7.9 million. The Cobalt was worth $11.3 million in 2019 but is now valued at $8.8 million. The value of the Regal has fallen to $8.9 million in 2021 from $11 million in 2019.
Typical assessed values for single-family homes in the City of Vancouver rose by 10 per cent between 2020 and 2021, and condominiums rose by three per cent, according to BC Assessment.
The average apartment building price-per-suite in Vancouver rose by 23 per cent in 2020, according to a mid-year review by Goodman Commercial, a real estate firm that specializes in apartment building sales.
In 2020, Vancouver's city council backed an ambitious plan to buy over 100 privately owned SRO buildings in an attempt to protect a dwindling stock of low-income housing.
The city hopes to partner with the provincial and federal government to find the $1 billion needed to buy and renovate the buildings, many of which are in terrible condition.
Other SRO buildings have been bought by investors over the past 15 years, who have then done minor renovations and raised rental rates when tenants move out, meaning they're no longer affordable to people who receive social assistance or disability benefits.
City staff have said they will explore the idea of vacancy control for SROs, tying limits on rent increases to the unit, not the current tenants. Provincial limits on rent increases now only apply as long as the same tenant remains in the unit.
David Eby, B.C.'s attorney general and minister responsible for housing, has said he's supportive of the city's plan to acquire SRO hotels. He's also asked BC Housing to look at vacancy control for SROs.