Thicket of red tape is choking Metro Vancouver’s rental market

The only solution to higher rental demand is to quickly increase the supply and availability of additional housing options. This is possible.

It is time for a concrete policy direction that puts an emphasis on fast-tracking the planning, approvals and construction of rental units across Metro Vancouver. Municipalities need to be open to amending existing processes to get more rentals built faster. So how to do it? A look at the City of North Vancouver provides some clues.

With a population of less than 60,000, it accounted for 20% of all the rental housing starts in Metro Vancouver through the first four months of this year, and the majority of its 346 new rental apartments started are aimed at mid-market incomes. To create incentives for rental, the City of North Vancouver provides a density bonus for rental housing projects, waives community benefit contributions for purpose-built rentals and reduces parking requirements.

Vancouver and other municipalities have similar incentives but see fewer rental starts per capita. Clearly, more could be done, and it starts with slashing through the civic bureaucracy surrounding the delivery of rental units.

Here are some ideas to increase the number of rental projects in the pipeline.

We endorse the May 10 recommendation by City of Vancouver Mayor Kennedy Stewart to eliminate the need for rental developers to submit an inquiry to the city before they can file a rezoning application.

The rezoning inquiry is not mandated by either the Vancouver charter or the city’s zoning and development bylaw. Originally introduced five years ago to streamline the process, it now often involves hundreds of pages of correspondence and takes a year or more to complete, rental developers say.

But there is a further step Vancouver and other cities should take: eliminate public hearings during rezoning applications for rental projects that already conform to a local area plan and city policies.

Even if a development checks all the boxes, it can be delayed for months and/or truncated in size during public hearings that can be dominated by “not-in-my-backyard” opposition. We’ve seen it play out before and we will see it again.

A recent Altus Group report shows that nearly three-quarters of Vancouver rental development applications submitted in 2017 were still being studied as of the end of last year.

Incentives go a long way and may need to increase given this new normal.

Savings on fees – both municipal and regional – would also aid in making projects feasible. A GST waiver would be the single most significant way to get more rental housing built on a national basis.

We continue to advocate for an end to the moratorium on the demolition of older rental stock, which is still in place in Vancouver and some other jurisdictions after more than a decade.

The majority of the Metro Vancouver rental stock universe is more than 50 years old and in dire need of upgrades. Allowing its replacement would encourage the construction of modern, more sustainable projects with increased rental units, for instance, new purpose-built rentals made from sustainable B.C. wood, which are now allowed for structures of up to 12 storeys.

Metro Vancouver needs to build at least 30,000 new rental units over the next two years to balance supply with demand, according to 2019 data from GWL Realty Advisors.

If even half of these units were started, it would generate at least a little hope that we may be on our way to creating some meaningful progress toward a future with new rental buildings instead of a universe of aging low-density buildings and basement suites.

The pandemic has challenged us all, but it also opens a door to think again – to switch from the failed emphasis on reducing demand to a fresh approach on increasing the construction of new rental units.

Many projects could sit idle, especially in light of changing parameters and a lack of construction cost reductions. While the focus should be on improving the rental inventory, any increase in multi-family supply will aid tenants because, in many areas of Metro Vancouver, a quarter of condominiums become rental units.

Will municipalities take note? Many have ignored such advice in the past, but there is a new urgency now and, we believe, a groundswell of support for a new direction, strength of leadership and new policies.

We are at the end of the beginning of this crisis, and there is a chance to significantly alter Metro Vancouver’s rental housing woes as we move forward. The question remains: who is willing to step up? •

Mark Goodman and Cynthia Jagger are principals at Goodman Commercial Inc. and publishers of the Goodman Report.