With asking prices for Vancouver rental apartments soaring 23 per cent in the past year, an increasing number of workers can’t afford to live in the city.
The provincial government has ruled out implementing rent control, leaving some politicians, developers and residents saying that the answer to lowering rent costs is to increase density and apartment supply – a controversial solution that has its share of critics.
Vancouver city council is set to vote May 18 on a proposal to rezone the Broadway corridor to allow tens of thousands of new homes.
Advocates such as Reliance Properties principal Jon Stovell say it is crucial that the city pass the plan.
“Why should the greater population of the province pay for the Broadway Line if the people in that community won’t accept any [housing] growth?” he asked.
Some longtime Kitsilano residents, however, are not ready for towers rising as high as 40 storeys at the corner of Granville and Broadway, with others in the 15-to-25-storey range.
“I don’t want to live in a concrete canyon,” said columnist and political strategist Bill Tieleman, who lives on West Broadway and has spoken several times at city council opposing higher density in the Broadway corridor. “Its not NIMBYism because I’m not saying that there should be no development.”
He said many affordable homes in low-rise buildings would be torn down if developers are given the green light to build towers.
“We need reasonable supply that fits in with neighbourhoods, and meets the concerns of citizens,” he said.
Differences aside, Tieleman, Stovell and most renters agree that Vancouver rents are too high for many workers to afford.
A Rentals.com report found that the average monthly rent for Vancouver apartments rose 23 per cent year over year to $2,661 in February.
This comes despite the city losing population.
Statistics Canada data show Vancouver having 693,235 residents in 2021, down 6,780, or nearly one per cent, from 700,015 people in 2020. The agency has not yet provided Vancouver population data for 2022.
Cost may have been one reason for the exodus, as some people left the city for suburbs or the Fraser Valley because the pandemic enabled them to work from home, and pay less for rent.
The main reason for rising rents is likely that home prices rose significantly during the pandemic.
Property owners tend to have mortgages, and they expect rent to cover a substantial chunk of their borrowing costs.
Asking prices for apartments mean few new renters can meet the traditional benchmark of paying 30 per cent of their pre-tax income on rent.
Using Rentals.com’s gauge, the average new apartment renter is paying $31,932 annually in rent, and would need a salary of $106,440 to stay below the 30 per cent threshold.
Most renters are in units where they pay less than current market rates, and their 2022 rent increase was capped at 1.5 per cent by the province.
That provides an incentive for some landlords to try to evict tenants so they can sign tenancy agreements with new tenants at higher rates.
The government has tried to tighten loopholes that landlords have used to do this.
B.C. government action
Last July, the B.C. government began requiring landlords go to the Residential Tenancy Branch (RTB) to apply for approval to evict a tenant to renovate a property.
The new process is meant to stop landlords from evicting tenants for minor apartment upgrades.
Tenant Resource and Advisory Centre lawyer Zuzana Modrovic told BIV that the government should also have required landlords to get RTB approval at hearings to evict tenants before moving family members into the units.
Housing Minister David Eby told BIV that his government did not require this because that reason for eviction is “binary” and “not as fact dependent” as the rationale of making home improvements.
Eby said that he plans to change regulations so that when landlords evict tenants so they, or family members, can live in units, those landlords will not be able to again rent out their apartments for a set period of time or face “significant penalties.”
Eby said he was not ready to reveal what that set period of time is going to be.
Modrovic said the best way for the government to keep rents low would be to limit landlords’ ability to hike rents for new tenants after previous tenants have moved out.
Eby said he would not do this because developers have told him it would make building rental units economically unviable.
“That leaves you in a situation where government is then responsible for building all of the rental housing, or significantly more than we currently are, and that’s not a realistic scenario for B.C.,” Eby said. “We have other things to prioritize, like [building] schools and hospitals.”
Alternative strategies
One of Eby’s alternative strategies to make housing more affordable, he said, is an initiative that provided $2 billion last year in a rotating line of credit to BC Housing’s HousingHub.
HousingHub capitalizes on the government’s ability to borrow money at relatively low interest rates and to partner with private developers to enable them to get lower-interest loans.
When projects are complete, developers borrow through traditional financing channels and pay the government back.
Eby is also urging cities to quickly approve more construction.
“I’m literally writing to, and calling, city councils – begging them to approve needed rental housing, and trying to explain why it’s so important,” he said.
Stovell said he would like to see Eby do more than plead with councillors, and instead legislate that cities must reduce permit-approval times.
Within the past decade, processing times have increased fourfold, Stovell said.
“Development permits used to take six months; now they take two years,” he said. “Rezonings, including pre-discussions, can take five to seven years.”
Vancouver city council and mayoral candidates in the 2022 October elections are campaigning on reducing permitting times, but Stovell said the problem is not at the political level, but rather in the city bureaucracy.
That is why Eby needs to legislate, he said.
Eby did not reject Stovell’s suggestion.
“If we don’t see our collaborative approach with municipalities showing results, we may have to take other measures,” Eby said. •
