We recently completed our update of new rental projects in the under construction, approved and proposed categories for 2019 in Metro Vancouver. In reviewing these figures, and looking back at our historical summary, we unearthed something quite telling. Here’s what we found:
In the last two years, the City of Vancouver has gone from the new rental supply sweetheart, with its self-congratulatory missives outlining the success of its programs, to being absolutely outpaced by the suburban market. In fact, the suburbs were so far behind in 2016, we were asked by the Urban Development Institute at the time to be a panelist in a “Building Rental in the Suburbs” seminar to demonstrate how rental was possible outside of Vancouver.
Fast forward two and a half years to today and the crushing rate at which developers are applying to build rental in other municipalities is obvious:
The proposed category of new rental construction in the City of Vancouver has dropped by 36% in two years, while the suburbs have witnessed an amazing 167% increase! It would seem a number of factors are at play. On the one hand, municipalities such as Coquitlam and the City of North Vancouver are offering very simple incentives – build an extra 1.0 FSR if the project is rental. On the other, the City of Vancouver’s rezoning process is so convoluted and risky, builders of rental are moving elsewhere. Only time will tell whether all these projects are completed. For now, here are the numbers: