Meeting the demand for rental housing
Considered the first transit oriented master planned community in Canada, the Joyce Collingwood Skytrain Station is within walking distance to The Remington at Collingwood Village, pictured here. Photo by replica hermes and gucci
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Article content Paul Martin has been living in the same Vancouver Yaletown rental tower for 20 years and has no plans to move anytime soon.
“It works just fine for me,” said Martin, a one time wine distributor and restaurant owner. His first move into 600 Drake was to a 307 square foot studio suite in the 192 unit highrise built in the early 1990s by Concert Properties, a developer that continues to manage the apartments to this day. While others were scrambling to buy a starter home in Vancouver, Martin, said he was happy to take a pass on buying a place on the Monopoly board. Today he is comfortably ensconced in his one bedroom flat. He prefers to focus on his work and hobbies. “I really would rather be sailing.”
Over the years, when friends have admonished him for not buying real estate, he stops the conversation by reminding them how much rent he pays, which is considered a bargain at well under $2,000 a month, especially for downtown Vancouver.
Article content Martin is part of the 50 per cent of Vancouver residents who are tenants, some of whom live in a rapidly growing housing sector called purpose built rentals (PBRs). Since 2017, Vancouver has set records for PBR construction, with 2021 looking like it is heading for yet another record year with more than 10,000 units underway as of March. Growth in the sector has been fuelled by record low interest rates for developers, home prices that have rocketed beyond the reach of most average Canadians, forcing many to stay longer in rentals, and a return of government supports for rental building construction.
That government support has come none too soon, say experts. It follows decades of inaction on rental housing development as government abandoned the housing field and grappled with rising debt, recessions, and a political shift favouring private sector solutions. In 2017, however, the federal government launched its National Housing Strategy, ultimately committing more than $70 billion in funding over the next 10 years to deal with the growing unaffordability of housing across Canada.
Brian McCauley, Concert Properties CEO and president, whose company built and manages Martin’s rental highrise, sees the increase of purpose built rentals as an expedient way of addressing Vancouver’s pressing need for affordable rental housing.
Brian McCauley, Concert Properties president and CEO. Photo by Paul Joseph /PNG “Over 50 per cent of residents in the City of Vancouver are renters,” said McCauley. “This is not new. The reality is that rental is in high demand and will continue to be in high demand as our population grows. As housing becomes less and less affordable, people have no other option than to rent.”Story continues below
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Article content Compounding today’s problem of unaffordability are projected record immigration levels. While the pandemic put the brake on immigration in 2020, the inflow is expected to soar as COVID 19 restrictions are lifted. Indeed, to help the Canadian economy recover from the pandemic, the federal government announced its 2021 2023 Multi Year Levels Plan last October with targets of 401,000 permanent residents in 2021, 411,000 in 2022, and 421,000 in 2023. Up to 12 per cent of those newcomers are expected to arrive in Metro Vancouver annually. Between 75 and 80 per cent of new residents typically start as renters, which translates to upwards of 39,000 new renters a year from immigration flows alone.
Historically, rental housing in British Columbia has been provided by individual entrepreneurs sometimes called ‘Mom and Pop’ rentals with everyone from families and small businesspeople, to professionals such as doctors and dentists, investing their money in small rental projects such as three storey wood frame apartments.
From the 1970s until 1992, the federal agency, Canada Mortgage and Housing Corporation (CMHC), was also developing between 12,000 and 16,000 rental units nationally each year. Then, in 1992, faced with economic uncertainties, including a recession and rising government debt, the then Liberal government turned off the tap and CMHC pulled back from its wholesale development of rental units.