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Housing boom exposes black market in Fraser Valley

Surrey, Abbotsford double fines as municipalities battle illegal construction projects

When the neighbours undertook an addition to the two-storey house next to her in Surrey’s Fleetwood neighbourhood last summer, Linda Ypenburg couldn’t help but notice. Within the space of a few days, workers had framed up a structure that extended to her fence line.

“We don’t have any privacy in our backyard,” Ypenburg said.

Built without a permit, the addition lacks proper footings. Instead, it rests on cement blocks.

“It’s not safe,” she said. “All it would take is a major windstorm and the whole thing is going to collapse, and it’s going to cause major damage to our backyard.”

The project is one of more than 800 investigated last year in Surrey, with the number of unpermitted and illegal projects in the Lower Mainland likely numbering in the thousands as homeowners poured billions into home renovations during the pandemic. Spending on residential renovations topped $9.2 billion in B.C. in 2021, according to Statistics Canada, a 21 per cent increase over the previous year.

“Most of the complaints that I’ve received have been on the older homes, houses that are probably not ready to be torn down and rebuilt, but more where people are trying to extend the life of the house. You see very little of this in the new builds,” said Surrey city councillor Jack Hundial, who presented a motion last summer to toughen the penalties on unauthorized construction in the city.

BC Housing, which enforces provisions of the province’s Homeowner Protection Act related to new residential construction, conducts an average of 900 investigations every year. It completed 140 investigations last year into illegal new home construction and 195 into unlicensed builders. The investigations resulted in 37 illegal new home sales being stopped, and sanctions against eight owner-builders.

While unauthorized construction has always taken place, with illegal suites being a particular issue in the early 2000s, the pandemic provided ideal conditions for a resurgence. On the one hand, residential construction fell off, putting tradespeople out of work. On the other, homeowners had the time and money to pursue renovations.

“Surrey has a lot of people in the trades for residential construction, so there were tradesmen available for these smaller jobs,” Hundial explained. “Plus, you had the capital that people were not spending, say, on trips during the pandemic or they had more discretionary income they could invest back into their house.”

With municipal approval processes backlogged, some homeowners opted to proceed without the required approvals. But with more people working from home during the pandemic, neighbours noticed what was going on, and calls to city hall increased as work proceeded without due notification.

 Stop-work orders

Stop-work orders, usually the result of complaint-driven investigations, increased to 821 last year from 415 in 2020 and just 294 in 2018.

During the first two months of 2022, as the average price for a detached house in the Fraser Valley soared 40 per cent from a year earlier to a record high of $1.89 million, Surrey bylaw enforcement officers issued 158 stop-work orders.

It’s a similar situation in Abbotsford, where spending on residential renovations increased 38 per cent last year, and the average detached-house price in February 2022 had hit an all-time high of $1.52 million.

“The City of Abbotsford received 310 calls for service in 2021, and has received 49 in 2022 to date, related to contraventions to of the city’s building bylaw,” reported Melissa Godbout, the city’s communications and public relations officer.

Abbotsford has worked to discourage unauthorized construction and encourage voluntary compliance with its building bylaw through education and awareness campaigns, but with limited success.

Compliance and enforcement efforts resulted in 598 fines for noncompliance in 2021 and a further 168 in 2022. Several properties have received multiple fines for several infractions. With the current fine for a bylaw violation being $500, that works out to nearly $299,000 in fines last year.

“If a building permit is subsequently issued for work that commenced without a permit, permit fees are increased 50 per cent where work was not completed, and doubled where work was completed,” Godbout added.

The approach is one Surrey adopted in January, the culmination of Hundial’s motion, which had broad support among his fellow councillors. The city now charges $1,000 for each violation of the city’s building bylaw, up from $500.

But that hasn’t stopped the project next to Ypenburg, where workers have sometimes been active as late as 1:30 a.m.

“We’ve never encountered anything like this in the 33 years that we’ve lived in our house. It’s a freakin’ nightmare,” she said.

Ypenburg is in regular touch with Remi Dube, development services manager for Surrey, who says the property is one of two that will likely end up in court because the owners keep flouting city bylaws. A court date has not been set.

“We’re going to keep fighting until this hideous structure’s torn down,” Ypenburg vowed.

Consequences

Other consequences of unpermitted and illegal construction besides legal woes include jeopardizing warranties, insurance coverage and other essentials related to the protection of property and lives.

Homebuilders Association Vancouver (HAVAN), the local affiliate of the Canadian Home Builders’ Association, says it is unaware of any specific cases of unauthorized construction.

“[We] have no direct knowledge or evidence in this regard other than anecdotal,” said HAVAN CEO Ron Rapp. “We cannot say definitively that such practices are not taking place, and it may be possible that these activities are being realized in rural and less regulated environments, but this would be very difficult to accomplish in Metro Vancouver.”

Building permits are typically required to obtain financing and utility connections, for example, making it hard for builders to opt out of any one step in the process without jeopardizing subsequent ones.

Rapp said major project would likely involve huge sums of cash changing hands under the table, something HAVAN has been battling for years.

“Our organization has taken, and continues to take, a position to encourage both contractors and consumers to avoid and reject works being undertaken in the underground economy,” he said. “We actively support a ‘Get It in Writing to ensure work is done with contracts and subject to all regulatory requirements.”