This new project shows ‘the terrible human cost’ of house-flipping

VANCOUVER-The Berlin Wall hadn't even been down for a full year when Paul Kroeger moved into his small house across the street from a cemetery in Vancouver. For more 32 years, the 67-year-old has paid rent there - $700 a month when he moved in.

Now, standing underneath a patch of plywood on the ceiling left exposed when the finish peeled off, Kroeger is preparing to leave. The weathered house has been sold, for almost $1.6 million, and he's been evicted.

I haven't moved much in my life, so I'm not one to consider homes to be temporary," he says. I've got a certain attachment to the building and property and such."

After three decades in the house, Kroeger is moving into a basement suite a few blocks away he found by leafletting his neighbourhood. He happens to be one of the foremost mushroom experts in the province and with that comes research equipment, specimens and a reference library he now has to move.

Even though he has a new place secured, the experience is stressful, he said, especially because the developer who took the property over initially wanted him out much sooner. The house will soon be torn down.

Housing is becoming temporary for more Vancouverites, and the phenomenon has even started spreading across the country. As landlords seek to cash out amid record-high property values, more people like Kroeger are being told to find somewhere else to live.

The problem is much bigger than people realize, a Vancouver housing activist said. Rohana Rezel's latest research has discovered hundreds of cases in the city in the past year where houses were flipped months after residents were evicted.

The work builds on a previous map Rezel's Open Housing project built showing properties in Metro Vancouver already up for sale after being purchased less than a year prior. Some of the new listings represented a 70 per cent increase over the property's purchase price in the previous listing.

Now, Rezel has taken it a step further.

His project looked at homes recently put up for sale if they had already been sold within the past year. Then, he tracked down their old listings from the first time they were on the market.

If those listings said the home had tenants and the new listings says they do not, Rezel counted them as likely having renters who had been evicted. So far, he's found 372 such homes in Metro Vancouver and mapped them out.

Flipping has a terrible human cost," he said. I'm not even talking about how it's driving up prices and making homes unaffordable, it's throwing people out into the streets."

Rick Pedersen knows the costs.

At the end of the month, Pedersen and his wife have to find a new place to live. They haven't even been in their 1,700-square-foot apartment 18 months.

Before they moved in, they say, they were told the owner wasn't interested in selling anytime soon. When they sought to renew their lease late last year, they were told the owner now wanted to go on a month-to-month basis, but still wasn't planning on selling.

Six weeks later, the couple in their 50s say, they were given an eviction notice.

That's how quickly the scenario changed on us," Pedersen said.

It's not the first time - Pedersen said he's been put out of his home eight times in the past 14 years by landlords who were selling. But this time it stings more as rents in the province have spiked tremendously in recent months.

A recent report from the website Rentals.ca, crunching data from its own postings, found rates in British Columbia for one-bedroom apartments increased 17 per cent year over year as of February.

Similar townhouses in the region here - same sort of square footage, pretty much cookie-cutter - we've seen as high as $3,750," Pedersen said. We're talking about a $1,600-1,700 jump from what we paid just over a year ago."

Now, the couple's next apartment will either be hundreds of dollars a month more each month, or much smaller, which means they will have to off-load some of their possessions, likely at a loss.

My wife and I am sitting here going, What are we going to do?'" he said.

Rezel said his project shows unfettered house flipping in Vancouver isn't just driving up prices, it's displacing people, and all just so flippers can turn around and try to sell them again for big profits within months.

British Columbia's rent-control regime limits annual increases for existing tenants to a modest rate - this year, 1.5 per cent. (A pandemic rent freeze was allowed to expire as of Jan. 1.)

So it's more appealing to sell a house without tenants, Rezel said - if the new owners choose to rent it out they can charge the going rate. Otherwise, a landlord could be getting far less than that if a tenant has been in the unit for a long time.

According to provincial regulations, if the buyer plans in good faith to occupy the unit, or have a close family member occupy it, the tenant can be given an eviction notice effective in two months. If a new owner plans to use the unit for another purpose, like a shop or a caretaker suite, the tenant can get a four-month eviction notice once the title has been transferred. In both cases, the tenant must be compensated one month's rent.

Michael Golden, a lawyer who deals with landlord-tenants disputes, said in a case where a person has been evicted so a new owner or their family member can live there and no one actually moves in (or stays fewer than six months), the former renter can pursue the owner for a year's rent through the province's Residential Tenancy Branch for a $100 fee.

The proceeding is a one-hour hearing which is done by telephone conference," he said. So, if you're a tenant who thinks your landlord hasn't followed through with what they were supposed to do, you pay $100 and a one-hour phone call and you could get a significant judgment."

Golden said often people find out their place is up for rent again by keeping in touch with neighbours, or they see it advertised online. (According to the Residential Tenancy Branch website, the same compensation applies to those given four months notice.)

Rezel said the quick, high yields from flipping homes aren't as abundant in Vancouver anymore and flippers have slowly moved east of the city.

Now that flipping has naturally started to cool in some parts of the Lower Mainland, he expects governments to try to take credit for it. But, he said, they haven't done enough.

Rezel said a new anti-flipping tax proposed by the federal government and meant to apply to all homes bought and sold within a year won't likely won't make a difference unless the rate is immense.

The solution is a real flipping tax to make the situation unprofitable," he said. And we also need vacancy control so that if you evict a person the new owner shouldn't be able to just jack up the rents. If you make evicting unprofitable it's just not going to happen."

In a February poll by Vancouver-based Research Co., 41 per cent of British Columbians aged 18 to 34 said housing, homelessness and poverty are the most important issues in the province. But Pedersen said he doesn't believe the government is serious about curbing housing costs.

He said one reason so much speculation is happening is that landlords can make money off short-term rentals - a phenomenon whose very existence tells him no one in power cares about his troubles.

It is the biggest lie being told to the public, that they want to get a handle on housing. It's absolute rhetoric from government. I don't care which party we're talking about," Pedersen said.

If they had the stones to do it, the first thing that they would do is they would ban Airbnbs."

Jeremy Nuttall is a Vancouver-based investigative reporter for the Star. Follow him on Twitter: @Nuttallreports