BC Government Introduces New “Rental-Only Zoning” Tool for Municipalities

For many years, analysts of the Vancouver housing crisis have pointed to the almost embarrassing lack of new rental developments in the Lower Mainland. There have been virtually none built in the last forty years, mainly because of the huge advantages and tax incentives in building strata developments. Developers like ENM have trouble finding the economic logic of constructing rental-only buildings when the price per square foot can be as little as one-third of that of a condominium.

But last week, Municipal Affairs Minister Selina Robinson followed through on an NDP campaign promise when she introduced legislation that would allow municipalities to zone for rental-only developments.  This gives municipalities the tools to either mandate a certain percentage of units to be rentals or to protect existing rental properties from redevelopment.  This rental-only zoning law would become the first of its kind of in the U.S. and Canada.

As housing prices climb closer to the point of no return, more and more BC residents are resigned to a lifetime of renting. With the vacancy rate for rentals in the Lower Mainland remaining below 1% in most places, the demand for new rental properties is sky high.  The hope is that this new supply will stabilize the soaring prices of rents in areas with so little vacancy.

We at ENM, and most private developers, support this new zoning law. The need for stable, protected rental properties, where residents can reasonably plan for a future in their home, is obvious, and it’s a big reason why we took on the development of our current project, Willoughby Walk.

Willoughby Walk is a purpose-built rental building with 191 new units. Our project manager Daniel Greenhalgh, the co-founder of ENM Construction Management, hopes that the project will help forge a new path for purpose-built rentals in the Lower Mainland.  “This project is different in that it is a high-quality product in a flexible rental format. It’s designed for long-term living in a fairly dense urban area, and we want to help set a trend for quality and design for purpose-built rentals.”

“One of the reasons we chose Willoughby Walk is because of its location. It is immediately on the 208th bus route with a bus stop at its front doors. It is also across the street from Willoughby Town Centre where you have shopping from insurance to groceries. If you’re planning to raise a family, this is an ideal spot.”

We think it’s important that municipalities choose to utilize this new zoning tool in dense areas like our Willoughby Walk neighbourhood.  These are the only areas where the economic model will make sense to developers and landowners.  It will also prevent cities from zoning certain areas of the city as rental-only, which could inadvertently create a kind of ghettoization of neighbourhoods.

LandlordBC, a group that represents property managers and owners in BC, also supports the policy. But they warn that if landowners don’t have incentive to sell, the policy will be a failure.  They suggest that municipalities need to ensure that enough buildable square feet density is granted in these new zones – otherwise, the “land-lift” won’t be enough for landowners to sell to rental developers.
 

We’ve seen firsthand the many delays in permitting and approvals that face a rental development. We suggest, as do most analysts, that cities have a specific set of expedited approval procedures for developments in these zones. These projects need to go from concept to creation exponentially faster than they do right now.
 

It will be interesting to see how individual mayors and councils choose to use this brand new tool, but we commend the new government for giving them the resources to tackle what we all recognize to be a glaring problem for BC.