Municipal Elections Putting Rental Inventory at Risk
- By Admin
- •
- 12 Oct, 2018
In fact, any connection to developers, or even a tangential involvement in any kind of housing project in a candidate’s past, is enough of a stigma to make winning a mayoral election virtually impossible.
The stoking of hostility towards the industry is threatening to create conditions in which municipal leaders are hamstrung from working in good faith with developers to address the many housing crises facing the city.
One of the biggest of these is the chronic shortage of rental supply. The rental vacancy rate is still hovering around 1% for Vancouver and most of its suburbs, and there’s no sign of any meaningful moving of the needle in terms of supply. Last year in Vancouver, there were a paltry 800 new rental suites added to the market, and the forecast is for 1,500 new suites per year through 2020.
We should be doing a lot better, and the
onus lies with municipal governments to hold their noses and help developers
fast-track purpose-built rental projects, with a healthy dose of fee reductions
for these much-needed developments.
20,000 New Rental Units
A recent Goodman Report found that there are currently 20,000 privately-funded purpose-built rental units either proposed, in development or under construction in Metro Vancouver. 8,500 of these are in Vancouver, and the rest are in the surrounding communities. If all goes well, these units should be ready for occupancy within the next five years.
These are market rate rentals, and they’ve attracted investments totaling around $850 million. The margins for these investors are razor-thin for purpose-built rentals, and the backdoor is always open if the political climate changes. And in Vancouver, it will most certainly be changing for the first time in 12 years, with Gregor Robertson stepping down after a three-term run and the heir apparent from his party just withdrawing from the race. It’s hard to pinpoint frontrunners, but with the race being dominated by pitchfork rhetoric towards developers, it’s hard to believe that the winner will care much about protecting those razor-thin margins.
ENM is very close to opening the doors to its own new purpose-built rental project, Willoughby Walk. Our project manager, Daniel Greenhalgh, prioritized quality of construction and tenant convenience at every turn, with the goal of creating a stable, high-end rental community with strata-like amenities, overseen by an attentive, professional management company. These are the kinds of projects that are desperately needed in Metro Vancouver, where families who can’t afford to purchase a home still deserve to live in a place where they can reliably plan for their future.
Purpose-built rental projects should be at the forefront of municipal priorities, and those razor thin margins for investors should be noted and protected. Since there are no truly effective government programs to help incent these projects, it’s up to private capital to bring them to the market.
Whether they like it or not, developers are going to have to be part of any new government’s attempts to ‘fix housing’. One current mayoral candidate may have put it best: “Why attack people we’ll have to work with later? Even if we do a massive investment in non-market housing, we’ll still be working with them.”
We hope they’ll work with us to protect those 20,000 units, and to create a lot more.
