Vancouver Rental Market Discussion

[Changing City]

Originally Posted by misher

Yes I understand that I meant there backing out of the DCL Waiver. And the point stands that its a bad sign. It means market rents are much higher than the rents the city is requiring which means more developers may back out and likely implies that rents in Vancouver are rising faster than planned.

What are the planned rises in rents? Who is planning them? One recent report noted "Landlords in Vancouver have started to do some major incentivizing in order to rent out their properties — like providing first month’s rent for free, offering to cover renters’ moving costs, and reducing security deposits required for pet owners."

[Migrant_Coconut]

^ Is this a short term thing, or could we end up swinging in the opposite direction and get an oversaturated market?

[nds88]

Originally Posted by Changing City

What are the planned rises in rents? Who is planning them? One recent report noted "Landlords in Vancouver have started to do some major incentivizing in order to rent out their properties — like providing first month’s rent for free, offering to cover renters’ moving costs, and reducing security deposits required for pet owners."

Recently rented out 4 x 1br in Vancouver close to DT, 1 x 1br in Burnaby and several townhomes in Surrey. There was a bit of difficulty in a Surrey townhome, but this was around the time when we got hit by snow. All the ones in Vancouver were rented for around $1900-$2000 in early April for May 1 move in and were gone really quick. Except a Surrey townhome that took a month to rent out in February, everything else moved really fast. My experience differs.

[Changing City]

Originally Posted by nds88

Recently rented out 4 x 1br in Vancouver close to DT, 1 x 1br in Burnaby and several townhomes in Surrey. There was a bit of difficulty in a Surrey townhome, but this was around the time when we got hit by snow. All the ones in Vancouver were rented for around $1900-$2000 in early April for May 1 move in and were gone really quick. Except a Surrey townhome that took a month to rent out in February, everything else moved really fast. My experience differs.

Yes - I understand vacancy rates in the rental market for individual properties (which is what I think you're describing) are still really low, and generally rent quickly. The reference I think was to whole buildings coming forward: a few years ago, and until relatively recently they would be pre-leased, with a backup of potential renters if any of the potential tenants didn't move in. That's apparently not the case as much today - I've certainly noticed ads for the recently completed Wall rental buildings still running several months after completion, and offering move-in incentives. It seems to be similar to what's happening in the condo market - a few years ago there would be lineups and everything sold out in a day; now that's not the case, and some projects can't get to critical mass of sales to actually proceed, as has been noted on several threads here. It's not a universal slowdown, but it seems to have cooled from a short while ago.

[Changing City]

Originally Posted by Migrant_Coconut

^ Is this a short term thing, or could we end up swinging in the opposite direction and get an oversaturated market?

Your guess is as good as mine (or maybe better) but I would think that with 1% vacancy in the rental market we're still a long way from a balanced market, let alone oversaturated. That's not to say it couldn't happen; it's how the office market tends to operate. Everybody piles in when vacancy is low, and builds more than there's demand for (or the demand falls as a result of an economic slowdown) and then we get years and years when almost nothing new gets built.

Residential demand doesn't vary quite as much, but it certainly slows and accelerates with the economy. Assuming all those new offices that are being built Downtown and in the suburban centres (and False Creek Flats, and Mount Pleasant) fill up, there would seem to be plenty of additional jobs coming in the next few years that will likely have new residents to the city looking for rental accommodation for at least an initial period.

[logan5]

Burnaby's city council has approved a motion aimed at protecting rental stock in the city.

At a Monday night city council meeting, councillors voted in favour of a bylaw that would create rental-only zones across the city, require a minimum of 20 per cent rental housing in all new developments and allow rental housing in commercial zones.

https://bc.ctvnews.ca/burnaby-to-cre...city-1.4439944

[Changing City]

Originally Posted by logan5

https://bc.ctvnews.ca/burnaby-to-cre...city-1.4439944

That was quick!

Presumably the other elements were supported as well. There will be some unhappy developers who have bought rental buildings for condo projects: the economics will change a lot. It'll presumably mean that sales will slow or stop of other rental buildings, at least for a while. I wonder how that relates to projects that are already planned but not yet approved in detail - do all those other Brentwood, Lougheed and Gilmore towers now have to include a minimum of 20% rental?

[logan5]

Burnaby is going to re-designate sites with rental buildings as rental only zones, but after that, the developer can apply to rezone the property for other uses, so this rental zone thing seems like a waste of time if they are just going to end up rezoning it again.

This is the pillar that curbs the problem to some extent: the municipal government would initiate a rezoning process to all sites in Burnaby that currently have purpose-built rental buildings with six or more units, converting all of these sites to rental use zoning district.

However, after this city-initiated rezoning process is completed, property owners will still have the option to pursue other forms of development if they apply to rezone their property.

I'd like to see some of the finer details, like can Amazing Brentwood or Solo tap into that extra density left over from completed or near completed projects and apply them to projects in the future.


This is a game changer for Burnaby because now there is a huge opportunity for much more residential density in the form of rental units.

https://dailyhive.com/vancouver/burn...rk-may-24-2019

[Galaxy]

Originally Posted by Changing City

That was quick!

Presumably the other elements were supported as well. There will be some unhappy developers who have bought rental buildings for condo projects: the economics will change a lot. It'll presumably mean that sales will slow or stop of other rental buildings, at least for a while. I wonder how that relates to projects that are already planned but not yet approved in detail - do all those other Brentwood, Lougheed and Gilmore towers now have to include a minimum of 20% rental?

It would be nice if the City of Burnaby would allow the transfer of the 20% from a site eligible or with extra capacity or rental buildable space to other sites. I could see say the capacity combined so that one would have entire buildings built to 100% rental or even taller buildings with the bottom half all rental. There are also so many spots where you could build a tower that has no views [make no sense for condos to be sold] but those units could all be rentals which would help to add more capacity.

[Changing City]

Just for some context here, last year CMHC data shows that last year there were 6,425 rental units started in Metro Vancouver. 53.4% (3,433 units) were started in the City of Vancouver. 230 (3.6%) were started in the City of Burnaby.

So far in the first four months of this year 1,761 rental units started in Metro Vancouver. 62% (1,092 units) were started in the City of Vancouver. 41 units (2.3%) were started in the City of Burnaby.

These are not net numbers - so some rental units will almost certainly have also been demolished in both Vancouver and Burnaby.

[whatnext]

The NPA of the Ninetoes took decisive action to stop the demolition of rental stock, why is Council dragging their feet now?

...Developers are moving in, tearing down 1960s, wood-frame walk-up buildings. They’re often replacing them with flashy multi-million-dollar luxury condos. City of Vancouver development-application permit signs are popping up like oversized weeds, suggesting more gentrification will come, ousting renters and others who are in decent housing arrangements.

While Ley’s daughter and family have moved, the veteran urban development specialist worries hundreds of tenants in relatively affordable, relatively roomy accommodation in the four-storey apartment blocks along this strip of Arbutus Greenway will soon be displaced and have few low-cost places to go.

“The problem in Metro Vancouver is that affordable rental is being replaced by expensive condos. It’s the history of gentrification,” Ley said during a recent tour of the stretch of low-rise buildings along East and West Boulevards between 41st and 49th Avenues, an area that is rife with construction and blanked-out windows...

...Such uncertainty goes on across Metro Vancouver, which continues to have some of the most expensive housing in the world, even if prices might have peaked last year. Grand condo complexes, both towers and low-rises, are being erected across the region, often marketed to offshore investors.

The ratio of median housing prices to median wages in Metro Vancouver is a crushing 12 to one. Toronto is eight to one; Seattle is five to one. Four to one is considered “affordable.”

Given the chasm between local wages and housing prices, many politicians and others have said residents will have to get used to renting — if they want to live and work in a city that happens to have become highly attractive to the global rich.

“We’re told rental is the future,” Ley said, as he points to another series of 1960s-built residential buildings on East Boulevard that are in a state of flux. “But you wonder how long this block will last. It’s like dominoes falling.”

This eight-block Kerrisdale corridor on the west side of Vancouver — where luxury condo complexes have already been completed, are under construction or are in the planning stages — is full bore into a transition that has already led to the evictions of thousands of renters in other parts of the city.

Craig Jones is a University of B.C. geography PhD candidate who also teaches community data science at SFU’s City Program. He said more than 2,000 apartment units, most of them rentals, have been demolished since 2008 in the city of Vancouver; with almost 1,300 of those demolitions happening in 2017 and 2018...

..Almost 1,000 rental units have been demolished in Burnaby since 2012, mostly in the Metrotown region, Jones said. And another 300 units are set to be torn down in the city in the next year or two.

“We’re talking about displacement of some of the most disadvantaged people.”

The demoviction trend has also devastated tenants in Coquitlam.

Jones has been studying how the purpose-built rental buildings in the neighbourhood around the new Burquitlam SkyTrain Station are going through massive redevelopment.

Condo developers are taking advantage of neighbourhoods that are fast increasing in value because of improved transit options, Jones said. But in the process they’re pushing out many, including recent immigrants and refugees.

Coquitlam lost 767 apartments units in the past three years, Jones said. “That’s a huge number. That’s 20 per cent of Coquitlam’s rental stock.”...

...Even though about 2,000 older rental units have been demolished in the city of Vancouver in the past decade, new ones have been built. Vancouver proper has had a net gain of 3,300 purpose-built rental units since 2008, Jones said. Still, construction is not keeping up with growth in residents, of whom more than one in three rent.

And, significantly, “these new rentals are more expensive,” Jones said.

He’s seen people demovicted and then confronted with a doubling of their rent. “It really depends on the situation. And the data that’s kept on all this is not great.”..

https://vancouversun.com/news/local-...gentrification

[misher]

Originally Posted by whatnext

The NPA of the Ninetoes took decisive action to stop the demolition of rental stock, why is Council dragging their feet now?

...Developers are moving in, tearing down 1960s, wood-frame walk-up buildings. They’re often replacing them with flashy multi-million-dollar luxury condos. City of Vancouver development-application permit signs are popping up like oversized weeds, suggesting more gentrification will come, ousting renters and others who are in decent housing arrangements.

While Ley’s daughter and family have moved, the veteran urban development specialist worries hundreds of tenants in relatively affordable, relatively roomy accommodation in the four-storey apartment blocks along this strip of Arbutus Greenway will soon be displaced and have few low-cost places to go.

“The problem in Metro Vancouver is that affordable rental is being replaced by expensive condos. It’s the history of gentrification,” Ley said during a recent tour of the stretch of low-rise buildings along East and West Boulevards between 41st and 49th Avenues, an area that is rife with construction and blanked-out windows...

...Such uncertainty goes on across Metro Vancouver, which continues to have some of the most expensive housing in the world, even if prices might have peaked last year. Grand condo complexes, both towers and low-rises, are being erected across the region, often marketed to offshore investors.

The ratio of median housing prices to median wages in Metro Vancouver is a crushing 12 to one. Toronto is eight to one; Seattle is five to one. Four to one is considered “affordable.”

Given the chasm between local wages and housing prices, many politicians and others have said residents will have to get used to renting — if they want to live and work in a city that happens to have become highly attractive to the global rich.

“We’re told rental is the future,” Ley said, as he points to another series of 1960s-built residential buildings on East Boulevard that are in a state of flux. “But you wonder how long this block will last. It’s like dominoes falling.”

This eight-block Kerrisdale corridor on the west side of Vancouver — where luxury condo complexes have already been completed, are under construction or are in the planning stages — is full bore into a transition that has already led to the evictions of thousands of renters in other parts of the city.

Craig Jones is a University of B.C. geography PhD candidate who also teaches community data science at SFU’s City Program. He said more than 2,000 apartment units, most of them rentals, have been demolished since 2008 in the city of Vancouver; with almost 1,300 of those demolitions happening in 2017 and 2018...

..Almost 1,000 rental units have been demolished in Burnaby since 2012, mostly in the Metrotown region, Jones said. And another 300 units are set to be torn down in the city in the next year or two.

“We’re talking about displacement of some of the most disadvantaged people.”

The demoviction trend has also devastated tenants in Coquitlam.

Jones has been studying how the purpose-built rental buildings in the neighbourhood around the new Burquitlam SkyTrain Station are going through massive redevelopment.

Condo developers are taking advantage of neighbourhoods that are fast increasing in value because of improved transit options, Jones said. But in the process they’re pushing out many, including recent immigrants and refugees.

Coquitlam lost 767 apartments units in the past three years, Jones said. “That’s a huge number. That’s 20 per cent of Coquitlam’s rental stock.”...

...Even though about 2,000 older rental units have been demolished in the city of Vancouver in the past decade, new ones have been built. Vancouver proper has had a net gain of 3,300 purpose-built rental units since 2008, Jones said. Still, construction is not keeping up with growth in residents, of whom more than one in three rent.

And, significantly, “these new rentals are more expensive,” Jones said.

He’s seen people demovicted and then confronted with a doubling of their rent. “It really depends on the situation. And the data that’s kept on all this is not great.”..

https://vancouversun.com/news/local-...gentrification

The problem is theirs a lot of exaggeration here. Sure these situations happen, but largely the reason these tenants are upset is because their rent is way under market and the landlord is hooped because of the rental restrictions.

When items are on sale your thankful that you save money, but you don't expect the sale to be the norm. These tenants got lucky with low rents but this is luck not privilege.

Gentrification is when you turn poor areas into areas for rich people. But instead the main complaint is that were taking away all these rent controlled condos that the tenants got lucky to get and refuse to leave because they'd lose their golden goose. Well too bad luck doesn't last forever and its not up to us to maintain it.

[Hmoob]

Originally Posted by Migrant_Coconut

^ Is this a short term thing, or could we end up swinging in the opposite direction and get an oversaturated market?

It'll be interesting to see how the market plays out as oversaturation approaches. While the empty homes tax and speculation tax were intended to increase the housing supply, they'll discourage residential development if vacancy rates go too high.

It will be difficult for developers to respond nimbly to demand given how long it takes to bring new housing stock on the market. Presumably they'll protect themselves by acting conservatively, and only brining new housing to market when demand is guaranteed to be strong.

Long term, these taxes as implemented will act primarily to limit expansion of our housing stock, limiting overbuilding and any associated price crashes.

[misher]

Originally Posted by Hmoob

It'll be interesting to see how the market plays out as oversaturation approaches. While the empty homes tax and speculation tax were intended to increase the housing supply, they'll discourage residential development if vacancy rates go too high.

Long term, these taxes as implemented will act primarily to limit expansion of our housing stock, limiting overbuilding and any associated price crashes.

I think your talking about the wrong city. When your vacancies are under 2% and the amount of empty homes is minimal the vacancies will not significantly increase if we fill those empty homes. We are underbuilding currently, we're no where near causing a price crash from overbuilding.

[Hmoob]

Originally Posted by misher

I think your talking about the wrong city. When your vacancies are under 2% and the amount of empty homes is minimal the vacancies will not significantly increase if we fill those empty homes. We are underbuilding currently, we're no where near causing a price crash from overbuilding.

And as long as we have a vacancy tax in place we will continue to underbuild and perpetuate low vacancy rates. Rational investors won't fund construction at risk of incurring a punitive tax.

[misher]

Originally Posted by Hmoob

And as long as we have a vacancy tax in place we will continue to underbuild and perpetuate low vacancy rates. Rational investors won't fund construction at risk of incurring a punitive tax.

Totally agreed although I think all the rental and development restrictions already strangled that goose and the vacancy taxes are just kicking it when it’s down.

[whatnext]

Originally Posted by Hmoob

And as long as we have a vacancy tax in place we will continue to underbuild and perpetuate low vacancy rates. Rational investors won't fund construction at risk of incurring a punitive tax.

We don't need more amateur landlords with one or two crappy condos, we need purpose-built rental buildings.

[GenWhy?]

Rental protections are increasing and will be annouced June 11 at council.

[Changing City]

Originally Posted by GenWhy?

Rental protections are increasing and will be annouced June 11 at council.

I'm guessing that might extend protection of purpose-built rental buildings in C-zones. That's what the "low-rise buildings along East and West Boulevards between 41st and 49th Avenues" are zoned. It's inaccurate to call them all 'affordable rentals' though - many of the demolished buildings were market co-ops that chose to sell out to developers. Almost all the rental buildings in the city - something like 90% of them, in RM-zones - are protected. There are a few in Commercial C-zones (a few on West Broadway for example, and some on East and West Boulevard) where that protection doesn't currently extend.

While the rate of demolition of rental buildings has increased in Vancouver, that's because many of the demolished units are (except in C-zones) being replaced with even more affordable rental. An example is Mirabel on Davie. That development involved the demolition of 68 rental units (although strangely, 47 were not protected because the building had been stratified). The replacement building will include 68 social housing units. They'll be given to the City of Vancouver as an air right parcel, and the City will choose a not-for-profit manager to run their units, quite independently of the other strata units. Those won't all rent at market - in fact it's unlikely any will, as the City have no mortgage to cover, just the ongoing management and maintenance.

[GenWhy?]

All in-stream rezonings are being affected. There's a few curve balls.