Daniel Greenhalgh Outlines a Path to More Purpose-Built Rentals

Recently our posts have focused on related aspects of purpose-built rental developments: there’s a huge market for them among investors at the moment, as they watch their peers double their money with savvy multi-family purchases; and there’s a desperate demand for more of them among, it seems, virtually everyone.

But we still live in a city that’s added less than 4,000 new units of purpose-built rental housing in three full decades.

While the numbers inch up each year, we’re very far away from where we need to be. So what’s the path to adding PBRP’s on the scale that’s needed?

First, we should look at the obstacles. Right now, there are some major ones:

• High cost of construction materials
• High cost and growing shortage of qualified labor
• Big delays in processing permits
• The ever-growing taxes and fees

Our new provincial government was seated because they won confidence in their plan to bring stability to the housing market. But they also know they risk their ridings when they make deals with developers, even for non-market housing.

They’ve introduced tools like rental-only zoning, implemented on the discretion of municipalities – but this is capable of nothing near the scale of supply we need. It’s piecemeal, and most developers will shy away because of the density restrictions.

The taxes they’ve added, intended mostly to shoo away foreign speculators, will likely drive up prices for residents while spurring clever work-arounds by obsessive people who charge premiums to find them.

Based on the findings of their own task force, the most effective weapon in the affordability battle is adding more rental stock. So paving the path for more purpose-built rental developments should be a primary focus for our MPs. It’s always tough for politicians to hold their noses and do the right thing, but real crises demand results. We need to see courageous and needle-moving measures enacted to flood the market with more PBRPs before the confidence they’ve won is lost.

The city of Vancouver has taken real steps to add more affordable housing, pledging 20,000 new units of purpose-built rental housing in the next 10 years. Two years into the pledge, they’ve added 1,900 new units. The province should do whatever it can to smooth the city’s path towards completing this pledge.

We hope our newly opened PBRP, Willoughby Walk in Langley, will help serve as a standard for quality and convenience for future developments in the Lower Mainland. 

There are easy choices that could be made to get more of these projects off the ground, and to help ensure that they make economic sense for companies like ours to take them on. You start with fast-tracking the applications and waiving certain taxes and fees. You give discounts on materials and you help with labor costs. You stop adding arbitrary taxes that drive up rents for tenants. The path is easy to see - it’s just hard to survive politically if you’re seen making things easier for developers. But who else is going to build them?