February 12, 2016
Help at last for the Metro Vancouver rental market
BY ANNE McMULLIN
Rental vacancy rates in Metro Vancouver dropped to 0.8 last year while average rent prices spiked. This is a concern. The regional economy relies on the rental housing market to attract and retain a diverse work force and the rental demand is growing.
The creation of new rental housing can be challenging due to high land prices and construction costs, as well as neighbourhood opposition to densification. Local governments and the development industry are working together to overcome these challenges and to increase the much-needed supply of rental housing.
The city of Vancouver, which has the highest proportion of renters of all Metro Vancouver municipalities, enacted the Short Term Incentives for Rental Housing (STIR) program in 2009. The program, which has since evolved into the Rental 100 Program, offers developers incentives for building 100-per-cent rental buildings.
The city waives development-cost levies, reduces parking requirements and minimum unit sizes, and grants bonus density to make rental construction as viable for developers as building market condominiums. New apartments constructed under the Rental 100 Program cannot be converted into condos and sold separately. The program secures the rental units for 60 years or the life of the building, thereby ensuring long-term rental supply.
The first project that was completed under this program is The Standard by BlueSky Developments at 1142 Granville St. The building consists of 106 rental units as well as lounge and gym on the ninth floor. Several other projects are newly completed or under construction.
Rental housing also comes in the form of secondary suites and laneway homes. It is anticipated that these will continue to add to the rental supply this year, particularly in the districts of North and West Vancouver, which recently created policies to encourage laneway home construction.
In 2015, 834 rental units were added to the market throughout Metro Vancouver even as vacancy rates dropped. That is the largest increase in decades, and hopefully this is a good indication of what is to come for the rental market.
The challenges of finding a place to rent are amplified when vacancy rates drop as low as they are now. Reasonably priced units are snatched up quickly, which puts pressure on rental seekers to act fast.
Popular tools for finding a rental home include Craigslist, Rentseeker.ca and Kijiji. These sites allow browsers to filter by price and location to narrow their search results. What is missing is any sort of quality check, rating system or reviews. To address this, LandlordBC recently launched a certified rental building program to allow B.C. residents to rent with confidence.
The certified rental program requires properties to meet 50 mandatory standards of practice and to be reviewed by a third-party auditor. Once certified, the properties appear on the certified rental building database, which is accessible to the public. This database gives potential renters the assurance that the building will be safe and clean, and perhaps of equal importance, that it will have properly functioning elevators.
As rental rates increase, so too does renter angst. Thankfully, we now have well-established programs to incentivize rental construction as well as new programs for quality control. As long as rental supply can keep up with demand, Metro Vancouver will continue to be an attractive place for renters.
Anne McMullin is president and CEO of the Urban Development Institute.
As a partner in community building, the Urban Development Institute is committed to working with communities and governments to create and achieve the vision of balanced, well-planned
and sustainable communities.