Frank O’Brien, Business in Vancouver
June 13, 2017
Potential changes could affect sales, competition, demolitions
B.C. landlords are watching closely to see if the BC NDP and BC Green Party coalition survives to form the next provincial government and, if so, what it will mean to the tightest rental housing market in Canada.With the recent provincial election vote split evenly, the NDP and Greens have united in a bid to topple the minority BC Liberal government.
Leaders of the potential “GreeNDP” government pledged during the recent election to build tens of thousands of subsidized rental units, raise taxes on “speculators,” double the tax on foreign buyers, hand each tenant $400 a year and toughen the Residential Tenancy Act to reduce “renovictions.”
The NDP’s plans to build a massive amount of new rental housing each year – equal to three-quarters of all the multi-family housing starts in Metro Vancouver last year – are drawing the most criticism.
In all, the NDP goal is to build 11,400 “affordable” rental homes annually for 10 years.
The price could be staggering, based on a Business in Vancouver study.
The cost per unit to build 108 units of subsidized rentals at the Sorella project in Vancouver, for the Atira Women’s Resource Society, was $238,000, and the land was donated by the City of Vancouver.
BIV also found that the average cost per suite of the last four assisted-rental projects in B.C. was $314,637.
At these prices, the NDP plan would pencil out to more than $3.5 billion in the first year alone, yet the NDP has forecast annual costs of just $400 million.
“[The NDP] idea is a total joke that will be nearly impossible to fulfil,” said Mark Goodman of HQ Commercial, Vancouver, which specializes in rental apartment buildings.
He added that it could take two to three years just to get municipal approval for a new rental project.
David Hutniak, CEO of LandlordBC, said the government would need to lean on the private sector to build the subsidized rentals.
“We are prepared to partner with the prospective NDP government as it is our view that it will be challenging to produce [the rental units] without partnering with the private sector,” he said.
Hutniak was also conciliatory when asked about a Green proposal that would require developers to replace any rentals lost to new projects and, if renovations are made to rental suites, that “all prior tenants must be given first right of refusal for those suites.”
“Tenants displaced in major renos/demolitions deserve support for relocation on the basis of financial need,” Hutniak said. “We’ve always supported such measures. [But] the notion of first right of refusal and reinstatement of original rents is not realistic when one considers the cost of construction.”
Questions remain over whether the GreeNDP coalition will survive or if B.C. will soon be facing another provincial election. Meanwhile, tenants and landlords, like the rest of B.C., remain in legislative limbo. •