Some developers are looking to meet demand for rental units by transforming the Lower Mainland landscape.
Others are focused on upgrading and transforming existing supply.
In either case, the effort to build more purpose-built rental housing will transform cities and significantly increase density, according to Geoff Nagle, director of development for Western Canada at Morguard Investments Ltd.
An example of this, he said, are two Morguard developments in the Coquitlam area: Burquitlam Plaza and Coquitlam Centre.
Meanwhile, companies like Concert Properties and QuadReal Property Group are working to upgrade older rental stock in order to compete with new purpose-built rental buildings.
Older properties are in “good shape” to compete with new buildings as they typically have larger units that can accommodate a multi-generational rental pool, according to Stephanie Loucas, senior asset manager at Nicola Wealth.
The Western Canada Apartment Investment Conference was held in Vancouver on April 4, and many of its panel discussions focused on rental construction and development. A key takeaway was that there are many different ways to increase rental stock, including through converting office space to residential.
Five to seven years ago, the area surrounding Burquitlam Plaza – located near the Burquitlam SkyTrain station in Coquitlam – was adjacent to two- and three-storey single-family homes. Now, the closest tower to the mixed-use, transit-oriented development is 53 storeys, according to Nagle.
He described the transition occurring in the Coquitlam area as “astounding.”
Coquitlam Centre, a 24-hectare site redevelopment, will change the community’s landscape as it becomes the City of Coquitlam’s new downtown core, Nagle told conference attendees. The 3.1 million-square-foot project proposal, which includes 9,000 square feet of rental, is a mixed-use project located near two transit stations.
“This is the emerging downtown core of Coquitlam.… The growth in the next 20 years in this market is going to be phenomenal,” Nagle said in a panel discussion.
B.C. isn’t the only province in Canada seeing changes to the housing landscape. In Alberta, there has been a push to convert office and commercial buildings into rental units.
According to Natalie Marchut, manager of development and strategy for the downtown strategy business unit with the City of Calgary, these conversions can offer cost-effective and sustainable rent solutions.
In 2021, Calgary offered financial incentives to convert office spaces through the Calgary Development Centre Program, she said.
“Calgary's problem started back in 2014, 2015, when the oil recession started, and the pandemic has just compounded the problem. So, we're ahead of the game, for better or for worse, because we've been dealing with this for almost the last nine years now,” she said.
Calgary’s downtown office vacancy rate at the end of 2022 was 27.2 per cent, according to Avison Young. In comparison, Vancouver’s was 9.5 per cent.
According to the panel, prolonged weakness in the office market, a robust multi-family market and restricted new supply are some of the aspects that can drive successful conversions.
Part of Calgary’s incentive program is to provide funding as well as remove the need for development permits, according to Marchut.
“We're getting so many benefits and other outcomes. We're getting projects that are doing affordable housing units, we're getting projects that are protecting heritage buildings. Most of our projects are providing new services and amenities at street level and at our plus-15 level. These are not requirements. These are just things that are happening because of how attractive our program is,” she said.
As with any project, there are hoops to jump through when it comes to conversions, said Ken Toews. Buildings must be in good shape, have ideal conditions for a conversion and be in a municipality that is flexible when it comes to approvals.
Editor's note (April 6, 2023): Updated with new information on Coquitlam Centre's square footage.
