Real estate marketer Bob Rennie sits for a photograph on the top of a parking garage as cranes tower over condos under construction in Chinatown, in Vancouver, B.C., on Thursday May 21, 2015.DARRYL DYCK/The Globe and Mail
The white-hot debate over Vancouver's sky-high housing costs will be cranked up a notch on Friday when the city's major condo marketer urges local politicians and neighbourhood groups to allow single-family houses to be torn down and replaced with lower-cost condos and townhouses.
In his yearly speech at a development industry event, Bob Rennie will make the case that politicians and residents need to be bolder about rezoning, because the current gradual approach is limiting the supply of land for condos and townhouses, making them more expensive than they need to be.
"The demand is there, but the biggest culprit in affordability is no supply," the always controversial Mr. Rennie said.
Mr. Rennie, who has made his fortune from selling such housing, says Vancouver cannot create more land for new single-family homes, and those are out of reach for the average person. So, he says, the only option for middle-income families who want to live in Vancouver is for the city to remove some of the increasingly unaffordable housing, whether it is bungalows or mansions, and use the space for smaller units they can afford. And for neighbourhood groups to support such changes, he added.
But the city councillor on the housing file says the private market is never going to produce dramatically cheaper housing no matter how much space is rezoned because the developers themselves restrict supply to keep prices high.
"Most developers maintain a marketing group focused on trying to match supply to demand," Geoff Meggs said. "There's no incentive for developers to flood the zones and truly reduce prices."
Mr. Rennie said that, although it is true developers restrict supply, if a lot of land is rezoned, costs will go down.
However, Mr. Meggs said city policies that encourage or force developers to build the housing that is needed – two- and three-bedroom suites for families, and rental units – are the only way to see real change.
Mr. Meggs said the proof is in the city's housing report, issued on Thursday, which showed the amount of rental housing built in Vancouver has increased from 5 per cent of the total housing starts to 20 per cent. That is almost entirely due to a city policy instituted by his Vision Vancouver party that has given developers incentives – extra density, reduced fees and parking requirements – to build rental homes, he said.
The debate has grown even more anguished than usual over housing costs in the city, which is the most expensive in the country and, some say, one of the most expensive in the world when prices are compared to local incomes.
Single-family home prices spiked dramatically again this spring, prompting one group to organize an affordable-housing rally for Sunday and another to start a petition – which now has thousands of signatures – demanding that governments do something to regulate foreign investment in residential real estate.
A report from Vancouver City Savings Credit Union this week said millennials will be pushed out if the gap between housing prices and wages continues to increase. And a report just out from the University of B.C.'s planning school documents the country's declining stock of public housing, now at barely 600,000 units, and less than 5 per cent of all the housing available.
Many people in the region firmly believe the stratospheric housing costs are largely driven by people from mainland China paying exorbitant prices for high-end properties, which they say creates a ripple effect throughout the Lower Mainland.
Mr. Rennie, who has been one of Premier Christy Clark's main backers, said he does not believe limiting foreign investment would make single-family homes more affordable. And he is coming Friday's event with statistics to make the case that condo projects are largely being sold to locals.
Mr. Rennie said numbers from some of his company's major condo projects indicate that about 50 per cent of buyers live within five kilometres of where they buy; most of the rest are from the Lower Mainland.
However, he acknowledged the ratio is different in higher-end properties. About 60 per cent of the units at The Binning, a complex being built on University of B.C. land, are being bought by people offshore, and 35-per-cent by local Asian residents.
And he estimates that about three-quarters of houses selling for more than $3-million are going to either offshore or immigrant buyers.
Mr. Rennie is one of the rare people in the development industry who lives in a condo, and he says he does not expect his three children will buy a house in Vancouver.
Frances Bula