Skip to main content

A proposal that would give cities in British Columbia the power to zone land for rental housing could moderate the price of affected properties, experts say.

Port Coquitlam Mayor Greg Moore, who led a committee on housing strategy for the Union of BC Municipalities, said the legislation tabled last month by the provincial government would give cities the authority to protect existing rental properties and calm speculation.

Currently, older properties in areas that are slated for higher density are attractive to buyers who want to make a significant profit because they can be turned into high-earning condominiums or houses for sale, he said.

Story continues below advertisement

“They’re trying to sell the potential in the increased value. And that increased value doesn’t allow for rental to make financial sense,” Mr. Moore said, adding the return on rental housing in the short term isn’t as great as units that are sold to individual buyers.

Cameron Muir, chief economist with the BC Real Estate Association, said rental housing gets “crowded out” for other uses, which is often ownership-type properties that offer revenue for developers even as land prices rise.

“If you’re going to build any kind of development, you start off with what the end product is going to be and what the market can bear and then you work yourself back from all the costs and the residual value is in the land,” he said.

“If it’s zoned rental only, of course the value will increase, but it will only be limited to the sphere of the rental market.”

Brian McCauley, president and CEO of Concert Properties, agreed the legislation would affect property prices, but added it isn’t necessarily an incentive for developers to build more rental.

Concert has just less than 5,000 rental units across British Columbia and Ontario, and plans to develop more.

Examples of better incentives include support from the province or federal government to finance new developments, Mr. McCauley said.

Story continues below advertisement

“You can’t get as high of a financing rate so you are investing more capital in building a rental apartment building,” he said.

For Concert, Mr. McCauley said financial gains are sought by increasing and maintaining a large portfolio of rental housing.

Funding that’s becoming available through the federal government’s new national housing strategy and B.C.’s promise for $6-billion toward housing development are also intriguing opportunities, Mr. McCauley said.

Cities can also create incentives by increasing density for new rental units, but Mr. Moore said those opportunities only come along when a developer wants to rezone or change the designated us of the land.

Despite record housing starts in many communities, Mr. Moore said a continuing shortage of rental housing illustrates why cities need more financial and regulatory authority.

“As a city or as a developer, if you can pull all these [incentives] together, you can start to make rental and non-market rental a viable thing to build,” Mr. Moore said.

Story continues below advertisement

Mr. Muir said rental-only zoning is a good policy, but cautioned that it will be up to municipalities on how it is used and any new homes will still take years to be planned and built.

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter