If you’re one of the few wealthy renters, you’re at an advantage, because Vancouver has an 8.7-per-cent vacancy rate. That’s the situation if you can afford to pay more than $3,750 a month.
If you’re looking for a unit in the $2,000 to $3,749 range, there is a lower vacancy rate of 1.8 per cent. And if you’re in the much more affordable $750 to $1,249 range, there’s only 0.5-per-cent vacancy rate, according to the city’s Housing Vancouver Annual Progress Report and Data Book 2019.
“It seems to be a case of abundance for those seeking high-end rentals in the city of Vancouver, but bare shelves for those renters of lesser financial means,” says Andy Yan, director of the city program for Simon Fraser University.
Vancouver has a surplus of high-end rentals and a critical shortage of affordable housing. Add to that situation the fact that 95 per cent of housing developed in the past decade has been competitively priced for the market. Comparatively little non-market housing has been developed, which is any type of housing where cost is geared to income, including co-op housing.
“It’s a tale of two cities,” Mr. Yan says. “We’ve seen this sizeable deficit in non-market housing development, or anything not geared to market mechanisms. And there is a certain portion of the population that can’t participate in market rental, never mind market ownership, so they won’t be served by the market system.”
Mr. Yan used the city’s new data to analyze the percentage of completed non-market development in the past decade. He says his numbers are conservative because they do not account for the loss of apartment buildings that were redeveloped and replaced with fewer units of housing.
There were 258 non-market housing units completed on average a year in the past decade. That compares to an average of 822 market-rate rental units and 3,712 market-rate ownership units.
Mr. Yan used data supplied by the Vancouver Housing Data Book, released in April. The city had combined temporary modular housing built in the past two years with permanent non-market housing. However, because the modular housing is only intended as temporary relief, he removed those units from the calculation. His interest was only in permanent housing, he said.
“It’s a large portion of the population that you are not building for. In Oppenheimer Park, those tent city residents have literally nowhere to go and have lost any semblance of a chance for affordability or housing stability over the last 10 years,” he said, referring to a part of the Downtown Eastside’s homeless population.
Mr. Yan praised the city for releasing the data, which, he says, helps residents put the problem in perspective.
“The city’s data book is a very important document, and an unflinching view of our housing challenges.”
Mr. Yan says that when you consider that only 258 units of non-market housing get built a year, it puts the loss of the Little Mountain social housing project into better view. The 15-acre project at W. 37th and Main Street was sold off to a developer in 2008 and has sat mostly empty ever since. When the provincial government sold the property, it meant the loss of 224 affordable and stable family apartments and row houses to low-income families. That represents almost a year’s worth of affordable units that come online each year on average, according to Mr. Yan.
“You’ve seen the loss of housing for people on low incomes by hundreds of units, and that loss is from demolitions, demovictions and up-scaling, as in renovictions.”
When asked for an interview, the city responded with a statement through its media department. It said that it had opened 600 temporary modular homes in the past year and a half. The city said it took action to provide permanent housing as well, with the completion of 1,560 permanent non-market housing units over a four-year period, between 2014 and the end of 2018.
“However, we have seen an increasing number of projects being approved recently,” the city said. “As part of the Housing Vancouver Strategy, the city has a target of approving 12,000 new units of social and supportive housing over the next 10 years.”
It also expects to open 400 permanent social and supportive homes this year.
Meanwhile, next door to Vancouver, in Burnaby, B.C., officials have been working on a sweeping package of policies aimed at protecting affordable housing stock. Council unanimously passed a progressive rental-only zoning aimed at protecting thousands of rental units from demolition. It’s a unique rental policy for Metro Vancouver, with Burnaby the first to take full advantage of new legislation that allows it to create rental-only zones.
It’s also an about-face for Burnaby, after a long and controversial period that saw nearly 1,000 affordable rental units redeveloped as market-rate condos.
“The developers always say to me, ‘Just let the market take care of itself,’” Burnaby Mayor Mike Hurley says. “My answer is, ‘When is that going to happen? Because we haven’t had one rental unit built in 20 years.’”
Mr. Hurley says Burnaby’s non-market housing completion rate has been lower than Vancouver’s and he’d like to see it increase to around 10 per cent a year of all newly built homes. But that will take three to four years to achieve and Burnaby has a lot of catching up to do, he says. In the meantime, he wants to use every tool available to generate affordable housing, preferably without depending on federal funding, which may or may not arrive.
“It’s a bit of a mystery how you actually get any of the federal funds and we’re working on that. But we have to find a way that we can make this work, even if senior levels of government aren’t contributing the way they should be,” he says. “And we got to this point because the federal government pulled all that money out of housing in the late eighties and nineties. That’s why we are where we are right now.
“We have to do something now. The market hasn’t done it for us, and so we just have to make some moves to force it to happen.”
The new policies allow rentals in commercial zones, such as an office tower with several floors of rental housing.
Burnaby also plans on controlling rents with vacancy controls, which would restrict increases on rents when tenants vacate due to redevelopment. The controls would only apply in buildings where the developers received permission to build more density than the zoning allows.
David Stroud, housing analyst, mortgage broker and founder of Mortgage Sandbox, wrote a blog post on Metro Vancouver’s inability to afford home ownership. A mortgage is determined according to income and Mr. Stroud based his analysis on a 20 per cent down payment, which is typical in Vancouver. Using Statistics Canada data, he found that only 8 per cent of Metro Vancouver residents can afford to buy a $1-million home.
In other words, the vast majority of people who own homes could not hope to afford to buy their own homes based on their income, he says.
He found that 81 per cent of homes are affordable to only 17 per cent of residents. Sixty-five per cent can’t afford to buy at all. He also found that only 10 per cent of rental apartments are affordable to the majority of renters, people making less than $50,000.
“The Lower Mainland has not built a lot of social housing. … And if a high percentage of households are low income, then the per cent of dwellings should be designed or targeted for low income. You would assume a large percentage of that would be rental.
“But I don’t think we look or manage housing stock in that way, at a Metro Vancouver scale," Mr. Stroud adds. "We just don’t manage or think about the uses. We just churn out units.”
Mr. Stroud is a supporter of building all types of housing, including at the high end. He believes that the added supply of condos the city has seen in the past couple of years is contributing to lower prices.
As for the 8.7-per-cent vacancy rate for expensive rentals, he believes that will adjust over time.
“If there is a high vacancy rate at the luxury end, eventually those rates will have to come down. It just takes time for sellers to digest the fact their house isn’t worth what it was a year ago," Mr. Stroud says.
“To me, the price of a particular unit of housing, whether rental or a condo or a house, is fluid, so if there is a vacancy rate that will put downward pressure on it, that’s good. Hopefully that trickles down.”