Penticton strata moving to 55+ to keep renters out
A Penticton senior is dismayed that her condo building is attempting to move to a 55-plus community in an effort to block renters from the building.
Toni Russell fears that if the largely senior population of the complex votes in favour of changing the building to a 55-plus only strata, it will seriously devalue the price of her unit.
"The $350,000 I paid for this place is being flushed down the toilet because the place has now been devalued," Russell told iNFOnews.ca. "If you want to be in a retirement home, go live there, don't live here."
The 74-year-old currently lives with her 94-year-old mother in a condo unit at Cherry Lane Towers, a large five-building strata complex on Atkinson Street in Penticton.
Strata members vote on the change Jan. 25. While the strata council hasn't given a formal reason for the move, Russell says it's being proposed so the strata can avoid the units being rented out.
The strata's reaction is the backfire many critics predicted when the B.C. government changed the law last fall making all strata buildings available to renters with the exception of 55-plus buildings.
Cherry Lane Towers is currently an 18-and-over building that hasn't allowed renters but the new legislation means owners at Cherry Lane could rent out their condos if they want to.
If the complex moves to 55 plus, those already living at Cherry Lane Towers under 55 will be allowed to stay but anyone new under age 55 won't be allowed.
While Russell won't be affected if the vote passes – she's 74 – she's worried about what effect it will have on the value of her condo.
And she's right to be concerned.
"They (plus 55 buildings) are definitely cheaper," Penticton realtor Anita Russell told iNFOnews.ca. "It's limiting who can buy, and that will negatively affect the value... I can't tell you how much it will affect (it) but I know it will."
Vernon realtor John Deak agrees.
Deak said it's too hard to say how much cheaper 55-plus units are, but they always go for less than if a building is all ages or 19 plus.
A Scotiabank financial adviser also shares the sentiment.
A letter sent to the strata council from Scotiabank financial planner Phil Plona says owners at Cherry Lane Towers should consider the move carefully.
"Going 55 plus will naturally have a downward pressure on the value of residences due to the fact that a major portion of your interested buyer pool is no longer available," the letter reads. "There is the fact that some residents may find it more appealing to be in a 55-plus building, however, I believe that in terms of home value, this is far outweighed by losing a significant part of your buyer pool who would otherwise be interested in living in Cherry Lane."
The financial planner goes on to say that in the last six months mortgage rates have tripled and he's witnessed seniors no longer qualify for mortgages because of the debt-to-service ratio guidelines.
"This can be a problem for a big part of the aging buyer pool who may need to service a small mortgage but have limited sources of cash flow," Plona says in the letter.
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While it's not known how the condo owners will vote at the meeting, Russell estimates about 85 per cent are over 55 years old and haven't thought about the ramifications of the proposed change.
"The seniors don't seem to understand except they want to have no young renters," she said.
Russell points out that when the five-building complex was built in the late nineties it began as a 55-plus community but changed to being an adult-only building because units weren't selling.
Outside of the financial consequences, Russell doesn't think moving to 55 plus makes any sense.
Her 46-year-old son co-owns the apartment with her and while he has no intention of moving in. If for any reason he needed to, he wouldn't be allowed.
She points out that if anything happened to her son or his wife, her grandchildren wouldn't be allowed to live with her.
With more than 250 condos at Cherry Lane Towers, she's sure the move would negatively affect others living in the building too in ways they may not have considered.
iNFOnews.ca made several requests for comment from strata KAS 1878 president Elaine Potter but our calls were not returned.
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