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People take in the view of the downtown skyline, north shore mountains and fall foliage from Queen Elizabeth Park in Vancouver on Nov. 8, 2020.

DARRYL DYCK/The Canadian Press

Vancouver has relied for at least two decades on developers sharing some of their profits from their expensive downtown condominiums to pay for social housing. But the near-disappearance of the luxury condo market has skewered that strategy.

So Vancouver city councillors approved on Tuesday a temporary new policy that will let developers in a couple of zones in the city’s downtown West End switch to a different program for creating affordable housing: rental apartments, with some guaranteed below-market units included.

That will mean allowing fatter buildings to create even more density for each project, in order to cover the cost of the lower-priced rentals, as well as accepting that the new model will mean private ownership of the units, rather than public social housing.

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But city planners said if nothing changes, likely nothing will get built for years on those sites.

“This is really about a shift in approach to affordable housing,” said Dan Garrison, the city’s assistant director for housing policy.

Even though the city received five applications up to 2018 for high-end condo projects that would have included 866 condos and 342 social housing units in blocks near Burrard Street, “We aren’t seeing many of those projects proceed to construction,” he said.

The staff report said the city’s empty-homes tax and the province’s foreign-buyers’ tax and speculation tax “have contributed to a softening of Vancouver’s high-value condominium housing market.”

The resulting slowdown has killed hopes that the city would meet its target of 600 new social housing units between 2014 and 2024, since almost 200 social housing apartments were part of the now-stalled projects.

Vancouver has used a strategy of allowing developers to get extra density for their market condos in return for providing a certain number of subsidized units since the Coalition of Progressive Electors council of 2002 pioneered that approach to get social housing as part of the redevelopment of the former Woodward’s department store.

It has since become a staple of city planning, with the current policy in the new West End plan of 2013 that large condo developments had to provide a quarter of the units for social housing.

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But not a single rezoning of that type has proceeded since the plan was approved.

So staff recommended that they allow developers in six key blocks just west of Burrard be allowed to reapply under a new policy for the next two years that would allow them access to what has been an experimental housing program so far elsewhere in Vancouver.

That experimental program gives developers additional density if they guarantee that at least 20 per cent of the units in the building rent permanently at rates well below market.

Although there have been 10 of those projects approved so far, from a PCI Developments proposal for two large apartment buildings on the far east Vancouver end of Hastings Street and a Westbank Corp. project at the western end of Broadway, none have started construction.

Allowing the West End development sites into that program means that the buildings will need more floor space than what had already been planned.

Evan Allegretto, the president of Intracorp Homes, said his company supported the changes, although he wanted to see more flexibility on height and density.

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“We have three projects in the Burrard corridor all on hold – they would move forward with these amendments.”

Planners said buildings won’t be allowed to go taller, because of height restrictions in that area, but they could be built wider.

The experimental program requires developers to rent out studios for no more than $950 a month, one-bedrooms for $1,200 and two-bedrooms for $1,600. The rent can’t be raised by more than the prescribed provincial rent increase every year, even if a tenant moves out.

That’s different from standard rental policy in British Columbia, which restricts rent increases for existing tenants but allows a landlord to charge whatever they want if someone new moves in.

Developers that had approvals for condos will still have to apply under the new model and go through a public hearing.

COPE Councillor Jean Swanson, who has voted against most new housing developments since she was elected to council two years ago, saying they are unaffordable and will spur gentrification, voted in favour of this change.

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“I think I’m going to vote for this because we could get deeper affordability,” she said, adding that the rent maximums under the city’s policy are better than those in BC Housing-funded projects.

Only Non-Partisan Association councillor Colleen Hardwick voted against the change, saying that staff haven’t provided the evidence that more rental housing is needed.

Ms. Hardwick has been arguing steadily since the beginning of the pandemic that the city needs to re-evaluate whether it should keep pushing for so much new housing – a key goal of the city’s 10-year plan – given that there may be a lot less demand.

Her NPA colleagues disagreed with that view. “We know the need for rental is ongoing,” said Sarah Kirby-Yung.

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