Vancouver Rental Market Discussion

[GenWhy?]

Originally Posted by fredinno

Also relevant: http://www.vancouversun.com/business/com...estate+rental+market/11591540/story.html


I guess the NPA is looking into this, hopefully? (please?)

We've heard from every party in person that they're going to reduce wait times through the process. One councillor was surprised to hear a few weeks back from us that the wait times have not improved but have shifted from on phase to another. We do most of the Development Permit stuff in the Rezoning phase now. All I've heard from the NPA is that they will retain the program as best they can with the Greens wanting to edit the DCL stuff... and they're fuzzy on the "incentive" part. But we meet with some of them again soon. Rental 100 review is in Autumn so it gives us some time to present our ideas. Stovel gave them a rental proforma at the beginning of their term.. I guess they still don't get it.

As far as streamlining the Rental 100 program... it's complicated. It's less about the neighbourhood and more about existing zoning, and the whole rezoning process and the bag of goodies it comes with.

[Changing City]

Originally Posted by fredinno

It is estimated that over the course of 2015 to 2017, Toronto added an annual average of 14,000 new apartment rental homes that are purpose-built rentals and/or rental condos, however, to meet demand Toronto needs to add or have vacated 25,000 rental homes, each year, according to the report from GWL. Vancouver needs to make 12,000 rental units available per year, but over the past three years the city has only amassed 3,400 new rental homes, annually.
In short: Supply is not meeting the demand. Not even close

It's true that we're not seeing 12,000 rentals a year added to the stock of Greater Vancouver housing. The GWL numbers are a bit low though. Here are the CMHC numbers for rental completions since 2015: [source]

2015 3,382
2016 3,513
2017 4,800
2018 6,275

so far in Q1 of 2019 there have been another 1,156 completed.

These are all purpose-built rentals: rented condos or private houses owned for investment will be in addition to these numbers. It's impressive that the City of Vancouver is responsible for adding 45% of the total 17,970 rentals completed in Greater Vancouver between 2015 and 2018. Surrey added 13%, and Burnaby just 7%. (Those aren't net numbers either - Vancouver mostly doesn't allow the loss of existing rental buildings. Burnaby; not so much until now.)

[whatnext]

It should be clear to all three levels of government that they allowed real estate prices to escalate to such a point that it has become impossible for the private to build truly affordable market rentals in Vancouver. Since they sat on their hands during the build up to the crisis all three should cough up land to build such rentals on. And I'm not talking social housing. There needs to be affordable rental that working people who make an economic contribution to the city can afford.

[Changing City]

Originally Posted by whatnext

It should be clear to all three levels of government that they allowed real estate prices to escalate to such a point that it has become impossible for the private to build truly affordable market rentals in Vancouver. Since they sat on their hands during the build up to the crisis all three should cough up land to build such rentals on. And I'm not talking social housing. There needs to be affordable rental that working people who make an economic contribution to the city can afford.

I'm not sure what the City of Vancouver, (or Richmond, Surrey, Burnaby etc.) could have done to prevent the run up of prices. That's mostly down to low interest rates for lending. If there were municipalities that had closed down development (as San Francisco did for many years) that could have contributed to higher prices. I don't think that happened here though - although there are certainly municipalities slamming the brakes on since the last round of local elections. Whether prices will rise, or not fall as much as a result in White Rock remains to be seen...

What land do you have in mind, sitting underdeveloped and waiting for large-scale construction, owned by any level of government? The Feds have released Jericho and the RCMP site in the City of Vancouver. I'm not familiar with suburban municipalities enough to know if there are federal or provincial sites sitting with development potential - but I'd be surprised. To allow new non-market projects in Vancouver the city have been buying sites on the open market - which is far from cheap.

[misher]

Originally Posted by Changing City

I'm not sure what the City of Vancouver, (or Richmond, Surrey, Burnaby etc.) could have done to prevent the run up of prices. That's mostly down to low interest rates for lending. If there were municipalities that had closed down development (as San Francisco did for many years) that could have contributed to higher prices. I don't think that happened here though - although there are certainly municipalities slamming the brakes on since the last round of local elections. Whether prices will rise, or not fall as much as a result in White Rock remains to be seen...

What land do you have in mind, sitting underdeveloped and waiting for large-scale construction, owned by any level of government? The Feds have released Jericho and the RCMP site in the City of Vancouver. I'm not familiar with suburban municipalities enough to know if there are federal or provincial sites sitting with development potential - but I'd be surprised. To allow new non-market projects in Vancouver the city have been buying sites on the open market - which is far from cheap.

One big thing Vancouver has to do is simplify its building code and speed up its permit approvals. That's a big extra cost. Plus it doesn't help that we charge 1% vacancy tax while waiting for permit approvals. This results in extra costs above the costs incurred building in other municipalities.

A big factor is also our rental supply. Rental investment is very long term and many are shying away. Programs that incentivise investment in rental like waiving rental restrictions on new buildings for a set period or encouraging foreign investment in rental development would be great. Things that basically cost the government nothing but result in greater rental construction. Perhaps even waiving/reducing property transfer taxes on new rental construction so developers build them to then sell (and then repeat).

[whatnext]

Originally Posted by Changing City

I'm not sure what the City of Vancouver, (or Richmond, Surrey, Burnaby etc.) could have done to prevent the run up of prices. That's mostly down to low interest rates for lending. If there were municipalities that had closed down development (as San Francisco did for many years) that could have contributed to higher prices. I don't think that happened here though - although there are certainly municipalities slamming the brakes on since the last round of local elections. Whether prices will rise, or not fall as much as a result in White Rock remains to be seen...

What land do you have in mind, sitting underdeveloped and waiting for large-scale construction, owned by any level of government? The Feds have released Jericho and the RCMP site in the City of Vancouver. I'm not familiar with suburban municipalities enough to know if there are federal or provincial sites sitting with development potential - but I'd be surprised. To allow new non-market projects in Vancouver the city have been buying sites on the open market - which is far from cheap.

Municipally Gregor Robertson and Vision Vancouver did everything they could do downplay and minimize the effects of foreign buyers, right up until teh last minute. Similarly, you did not hear anyone from Richmodn or Burnaby's government pressing the issue.

Jericho and the RCMP lands were (foolishly) signed over without regards to affordability. The 1st Nations participants are on record as saying affordable housing is not a concern for them there. The whole debacle at Little Mountain was precipitated by CMHC getting out of the housing business and turning the site over to BC, which was foolish. I'd love to see a map of the Lower Mainland with every municipally, provincially and federally owned piece of land identified.

[misher]

Originally Posted by whatnext

Municipally Gregor Robertson and Vision Vancouver did everything they could do downplay and minimize the effects of foreign buyers, right up until teh last minute. Similarly, you did not hear anyone from Richmodn or Burnaby's government pressing the issue.

Jericho and the RCMP lands were (foolishly) signed over without regards to affordability. The 1st Nations participants are on record as saying affordable housing is not a concern for them there. The whole debacle at Little Mountain was precipitated by CMHC getting out of the housing business and turning the site over to BC, which was foolish. I'd love to see a map of the Lower Mainland with every municipally, provincially and federally owned piece of land identified.

Aren't you a huge NDP supporter? Weird to hear you bash the NDP's municipal governance. Why would Richmond or Burnaby care, instead of going NIMBY they built a ton of condos and while things are more expensive its not crazy like Vancouver. Rents in downtown Richmond or near Metrotown are half of downtown Vancouver.


PS: Notice something in Vision's logo?

[GenWhy?]

Got an note for a pre-application Open House for another MIRHPP development on Kingsway and Glen (1123 Kingsway). 13-stories and couldn't imaging it being any shorter with this program.

[SpongeG]

'$1,000 bucks for all this?': Students live like kings in Vancouver’s empty mansions
Natalie Wong and Natalie Obiko Pearson, Bloomberg News

REAL ESTATE

News Wire

Investing
22h ago

'$1,000 bucks for all this?': Students live like kings in Vancouver’s empty mansions
Natalie Wong and Natalie Obiko Pearson, Bloomberg News




How lucky Vancouver renters are paying less for luxury housing
Isaiah Boodhoo, 22, thought it was a “complete hoax” when he saw a rental listing on Facebook for a bedroom in a Vancouver mansion for only $1,100 a month.

It turned out the glass chandeliers, luxurious blue drapes, steam room and billiards table were for real. The nine-bedroom home, dubbed “The Castle” by the 14 students who share the property, is apparently owned by an Afghani pop artist, according to Boodhoo.

“Honestly, I would stay here for as long as I could,” he said, sitting on a white couch while sipping from a Slurpee cup. “$1,000 bucks for all this?”

Others may also soon find themselves as lucky as more mansion owners in the city turn to renting to avoid a new tax on empty homes. In the new world of Vancouver’s housing market, where Chinese investors are decamping and low-ball offers are the norm, students can find themselves living in the lap of luxury.

It’s a far cry from the frenzy of a few years ago when the city was at the center of a global property boom. Prices more than doubled in the decade through 2016, outpacing gains in New York and London. But government policies to tame the market—from new taxes to stricter mortgage regulations—have fueled a plunge in sales to the weakest since the global financial crisis. Prices are down 8.5 per cent from their peak in June, according to the Real Estate Board of Greater Vancouver.

...

https://www.bnnbloomberg.ca/college-kids...-in-vancouver-s-empty-mansions-1.1244950

[fredinno]

Originally Posted by GenWhy?

We've heard from every party in person that they're going to reduce wait times through the process. One councillor was surprised to hear a few weeks back from us that the wait times have not improved but have shifted from on phase to another. We do most of the Development Permit stuff in the Rezoning phase now. All I've heard from the NPA is that they will retain the program as best they can with the Greens wanting to edit the DCL stuff... and they're fuzzy on the "incentive" part. But we meet with some of them again soon. Rental 100 review is in Autumn so it gives us some time to present our ideas. Stovel gave them a rental proforma at the beginning of their term.. I guess they still don't get it.

As far as streamlining the Rental 100 program... it's complicated. It's less about the neighbourhood and more about existing zoning, and the whole rezoning process and the bag of goodies it comes with.

"Hopefully it'll work." -George Lucas

Originally Posted by Changing City

It's true that we're not seeing 12,000 rentals a year added to the stock of Greater Vancouver housing. The GWL numbers are a bit low though. Here are the CMHC numbers for rental completions since 2015: [source]

2015 3,382
2016 3,513
2017 4,800
2018 6,275

so far in Q1 of 2019 there have been another 1,156 completed.

These are all purpose-built rentals: rented condos or private houses owned for investment will be in addition to these numbers. It's impressive that the City of Vancouver is responsible for adding 45% of the total 17,970 rentals completed in Greater Vancouver between 2015 and 2018. Surrey added 13%, and Burnaby just 7%. (Those aren't net numbers either - Vancouver mostly doesn't allow the loss of existing rental buildings. Burnaby; not so much until now.)

TBF, Vancouver is the most suited for rentals, already having the most rentals, and being the best served for Transit.

Originally Posted by misher

One big thing Vancouver has to do is simplify its building code and speed up its permit approvals. That's a big extra cost. Plus it doesn't help that we charge 1% vacancy tax while waiting for permit approvals. This results in extra costs above the costs incurred building in other municipalities.

A big factor is also our rental supply. Rental investment is very long term and many are shying away. Programs that incentivise investment in rental like waiving rental restrictions on new buildings for a set period or encouraging foreign investment in rental development would be great. Things that basically cost the government nothing but result in greater rental construction. Perhaps even waiving/reducing property transfer taxes on new rental construction so developers build them to then sell (and then repeat).

TBF, charging the vacancy tax during rezoning incentivises developers to go through the approval process more quickly. The problem is that the approval process is too bureaucratic in the first place. It's a walkup apartment, not a factory.

[GenWhy?]

Don't beleive that part about the vacancy tax on ongoing rezoning permits.

[GenWhy?]

One more time for good luck, Mish:

https://vancouver.ca/images/web/empty-homes-tax/developer-faq-empty-homes-tax-2017-05-31.pdf

You can't evict people out of your building in Vancouver until you have a permit. They can leave, sure, and then you pay them out most times depending on timelines of your application. But if a developer decides to keep their building empty as they wait for permits then that's on them and that's exactly what this tax is to avoid. Empty homes.

[misher]

Originally Posted by GenWhy?

One more time for good luck, Mish:

https://vancouver.ca/images/web/empty-homes-tax/developer-faq-empty-homes-tax-2017-05-31.pdf

You can't evict people out of your building in Vancouver until you have a permit. They can leave, sure, and then you pay them out most times depending on timelines of your application. But if a developer decides to keep their building empty as they wait for permits then that's on them and that's exactly what this tax is to avoid. Empty homes.

Yes but imagine how much the developer loses if the tenant refuses to leave when all the construction is booked. Or if the tenants stage a protest. If we reduced tenants rights this would make sense, but the current process requires tenants to be kicked out early to avoid large financial risks.

[GenWhy?]

Originally Posted by misher

Yes but imagine how much the developer loses if the tenant refuses to leave when all the construction is booked. Or if the tenants stage a protest. If we reduced tenants rights this would make sense, but the current process requires tenants to be kicked out early to avoid large financial risks.

This rarely happens and has nothing to do with the Empty Homes Tax.

[Galaxy]

What would be nice to see from Vancouver City Council is a plan to allow for the replacement of older rental buildings while also allow for the creation of new units. A plan that would be a gradual transition rather than something that equates to a rush or feeding frenzy. A policy of allowing rent rates to follow with tenants that are moved also would be good. There is a ton of units that are much older stock and the freeze on the re-development of these units means when and if they ever lift the freeze there will be a flood of redevelopments. I am also concerned about the age and overall safety of the existing stock of older rental units.

Of course, I am also in support of creating more new rentals in all price ranges also.

[GenWhy?]

What you mentioned is essentailly the current situation, without the replacement of cheap rents. The Tenant Relocation Plans are quite robust.

[misher]

Originally Posted by Galaxy

What would be nice to see from Vancouver City Council is a plan to allow for the replacement of older rental buildings while also allow for the creation of new units. A plan that would be a gradual transition rather than something that equates to a rush or feeding frenzy. A policy of allowing rent rates to follow with tenants that are moved also would be good. There is a ton of units that are much older stock and the freeze on the re-development of these units means when and if they ever lift the freeze there will be a flood of redevelopments. I am also concerned about the age and overall safety of the existing stock of older rental units.

Of course, I am also in support of creating more new rentals in all price ranges also.

I’ve seen many owners that never raise rents because they like the tenant or are too busy with life. However then costs go up and they have to raise rents to keep up with them, or they are less able to pay the bills. Should the owner get screwed because he was nice momentarily? We’re basically rewarding owners who gave constant increases to keep up with the market while punishing those who were nicer by forcing them to maintain below market rents.

The old system of inflation+2% at least allowed people to catch-up slowly. The current system is just forced charity.

[Galaxy]

I’m not for or against the raising of rent I am just pushing for refreshing of the rental stock especially of older units and using the opportunity to then also make newer buildings denser and adding more units. I really think if we increase the unit counts on the land of existing rental stock, we could refresh the inventory plus add some needed supply at the same time. The added supply also creates new places and is a few more new tenants paying presumably higher rents also.

I really think this would be just part of a bigger multi spoke of directions that the municipal government would employ to create more rental stock. I’m aware my idea is similar to what is being currently done but feel the pace and volume, as well as increased unit counts, are not high enough. There just is not enough for the amount of new stock vs in a condition that is in need of replacement.

Once a tenant moves out then the rents should be raised to market rates though. Also perhaps buildings that are replacements for existing stock plus new units could be given allowances unique to the price point or demographic of the typical renter of those units.

I agree also some policies currently seem to be forced charity as well so a more balanced approach would be nice.

[fredinno]

Originally Posted by misher

I’ve seen many owners that never raise rents because they like the tenant or are too busy with life. However then costs go up and they have to raise rents to keep up with them, or they are less able to pay the bills. Should the owner get screwed because he was nice momentarily? We’re basically rewarding owners who gave constant increases to keep up with the market while punishing those who were nicer by forcing them to maintain below market rents.

The old system of inflation+2% at least allowed people to catch-up slowly. The current system is just forced charity.

Rent controls should only be in place to prevent forced-evictions via rent spikes. Otherwise everyone either stops making rentals, or puts rentals at the highest possible values to avoid getting burned later on due to inflation.

[SpongeG]

BC Government to build 125 affordable rental units in Burnaby

DH Vancouver Staff Apr 23, 2019

The provincial government has announced that 125 affordable units will be built in Burnaby.

In a release, the province says the 14-storey apartment will be located at 6585 Sussex Avenue in the city’s Metrotown area.

The units will accommodate low-and-moderate income families. A total of 23 units will accessible for people with disabilities.


“After years of housing affordability being ignored by the previous government, we have put the focus back on people and building the right types of homes around the province,” said Selina Robinson, Minister of Municipal Affairs and Housing, in a statement.

...

https://dailyhive.com/vancouver/bc-government-build-125-afforable-rental-homes-burnaby-2019