Vancouver is launching an aggressive plan to spur rental construction as the city faces near-zero vacancy rates, tens of thousands of new residents expected in the next few years and a failure to meet its own housing targets.
Adding to initiatives that are already unusual within North America, city staff have recommended changes that would allow more height and density for rental projects, more zones off arterial streets where rental would be allowed, and a streamlined process that is supposed to cut a year off approval times.
Mayor Kennedy Stewart says there is widespread community support for the changes, although almost every approval of a rental-housing project under his new no-majority council in the past year has involved hours of public hearings, resident complaints and split votes.
“It’s what people are asking for. And we can’t declare something is a crisis and then not try something new,” said Mr. Stewart, who is in Ottawa lobbying for more housing money, among other things.
He said the measures would produce “thousands” of new units, although neither he nor his staff had a precise estimate of how many.
Vancouver started offering incentives to developers in 2009 to build rental, a move that kick-started rental construction that hadn’t been seen for decades after the federal government removed incentives in the 1970s and builders turned to more profitable condos.
The city’s new incentives have produced about 8,700 rental apartments in the past 10 years.
But the city failed to meet its target of 5,500 purpose-built rental units the past three years, getting applications and approvals for just half of that. Even the category of social and supportive housing exceeded its target of 3,300 apartments in the past three years.
The 236-page housing report made public Thursday laid out proposed changes in multiple pieces of the housing system.
Staff recommended that rental apartments proposed along the city’s main arterials no longer have to go through rezonings, which entail public hearings and usually lineups of speakers for and against.
As well, they said that rentals should be allowed in low-density transition zones that are near, but not right on, arterials. That would mean four-storey apartments and rentals on many streets that are now restricted to single-detached houses, something city planners and politicians have shied away from until now because of concerns about resident backlash.
They also recommended that areas that are zoned for apartments be allowed slightly more height and density. An area that allows eight- to 11-storey buildings, for example, should be able to have a couple more stories.
And they suggested processes for streamlining construction approvals aimed at reducing waiting times for permits by a year.
Vancouver is already leading the trend among North American cities with its aggressive moves on housing. It created the continent’s first vacancy tax aimed at investors leaving homes empty and collected $40-million in 2018 through that.
It now allows essentially three units – a main house, a basement suite and a laneway house – on almost every residential lot in the city.
The council is about to start public hearings on a rental initiative started two years ago, where developers were encouraged to propose any kind of building they could think of where they could guarantee that 20 per cent of the apartments could be rented at defined below-market rates.
It’s not clear yet whether the sometimes erratic new council will approve those.
The mayor believes it will, but acknowledged it would be a turning point.
“That’s the big test, are we going to do this or not?”
One developer from a company that specializes in building rental said the report contains some positive steps, but still many barriers.
There still isn’t enough of a density incentive for rental builders to compete against condo builders, said Hani Lammam, vice-president at Cressey Development Group. A rental building can go to six stories in a zone where a condo builder can only get four.
“You pretty much have to double the density to make the numbers work,” said Mr. Lammam.
And he said the experimental new projects, with guaranteed below-market rental rates, that are coming to council are not something developers will embrace, because the city is insisting that rent increases be capped to inflation rates for 60 years or the life of the building.
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