The Rental Housing Crisis: So what else is new?

This article was written and published in the 2016 Year-End Goodman Report.

Have the proverbial lights finally flickered on at the corner of Vancouver’s West 12th Avenue and Cambie Street? And have our elected officials and their advisors (read: spin doctors) acknowledged at last that we are in the midst of a rental housing crisis?

Under unrelenting pressure from a vast body of our citizenry – including students, new families, seniors and employers – the news media, BC Housing, the Urban Development Institute, landowners and the odd, very irritating commercial realtor, Vancouver’s municipal leaders after years of ruling in a vacuum of denial have now changed their tune. Even Mayor Robertson, after eight years at the helm, has admitted as much. As quoted in an article in The Guardian by Ashifa Kassam, Robertson said he “wouldn’t have dreamed the [housing] crisis would get this intense” (November 21, 2016). The Mayor artfully deflected blame away from his office by claiming that the crisis was owing to the impact of global capital and the fact that the provincial and federal governments were not doing enough.

We disagree. While these factors play a role, the Goodman Report takes the position that the City of Vancouver’s housing policies, particularly relating to rentals, have greatly contributed to the established shortfall, notwithstanding an increase of 828 units over the past year as reported by CMHC. Strict land-use rules have been implemented under the Vision party’s tenure. In a series of maneuvers, a wide array of highly restrictive anti-growth and anti-market policies have effectively pitted the City against the rental industry, including owners of aging, low-density buildings in RM-zoned areas and well-intentioned developers seeking to add stock. With little new inventory being added on the supply side, tenants seeking places to live remain the big losers. This issue has been festering chronically, and in previous issues going back some 10 years and readily available on the Goodman Report website, we’ve documented a litany of City measures both questionable and counterproductive that have greatly contributed to the crisis.

Accurate forecasting

On July 28, 2015, Barbara Yaffe published an article called “Rent increase tsunami expected” in The Vancouver Sun, inspired by a Goodman Report column wherein we had cautioned municipal governments and tenants that, in the face of ever-growing demand and minimal new supply, people would need to brace themselves for drastic housing shortages looming in the coming years. Needless to say, we called it right. 2016’s vacancy rates according to CMHC’s latest report have dropped yet again and stand now at 0.7%.

In our 2016 Mid-Year Review, we predicted that Metro Vancouver’s municipalities would be seeking funds from the provincial and federal governments to assist in the development of initiatives pertaining to social and nonprofit housing. Again we called it. Over the past four months alone, the provincial government has approved $500 million in funding for affordable housing, and the City of Vancouver has vowed to build 650 below-market rental homes on municipal land. This past summer, Ottawa earmarked $150 million over two years for affordable housing in B.C.
Upon reflection, the City’s decision to ask the feds to fund subsidized and so-called affordable housing seems almost hypocritical, flying in the face of its own intransigence. To its credit, Vancouver has created the Rental 100 program to encourage development of secured market rental housing. Unfortunately, the program hasn’t provided nearly sufficient incentives in the form of adequate height limits or amply densified sites, or certainty on development cost charges (DCCs) and community amenity contributions (CACs). It often takes two to three years of bitter negotiations just to get a rental project green-lighted. Compounding the issues further is the City’s intractable inability to streamline the supply and processing side. If we’re to judge by Vision’s strategies and the corresponding results, alleviating what are probably North America’s lowest vacancies may simply be beyond the capabilities of Mayor Robertson’s administration.

Not sleepless in Seattle

Meanwhile, faced with similar expanding patterns of immigration and business growth, our intrepid neighbours in the Puget Sound area in and around Seattle have managed to build 10,000 rental units in both 2015 and 2016, while planning 14,000 more for 2017. Perhaps our mayor, who likes to import Europe’s latest ideas on bike lanes and lane closures, could send his staff south of the border to learn how our friends there have succeeded in building rentals. He might find it refreshing to learn that the Puget Sound area helps facilitate rental development simply by getting out of the way and allowing market forces to prevail.