The sun will come up tomorrow — believe it
Nature’s historic headwinds, which buffeted B.C.’s south coast in mid-December, were not the only blustery forces impacting our geographic area. Metro Vancouver’s extreme, well-publicized lack of affordable rental housing and difficulties in generating significant new rental options, combined with the increasing militancy of tenant groups aided and abetted by misinformed politicians, meant that equally powerful gusts of a political nature were being directed at rental housing providers. The local apartment industry, made up of developers of purpose-built rentals and owners of older buildings, is very much on edge, increasingly concerned about shrinking returns, an added cumbersome bureaucracy and a not-so-level playing field.
Goodman is aware of some wary investors backing away from acquiring rental apartment assets in the current climate and approximately 12,000 planned rental units that are at risk of not being built. We are, however, urging a calm re-evaluation of the situation. Over the past 40 years, we’ve seen this movie before. No new land is or will be available. Governments of all stripes have displayed a chronic inability to encourage pent-up market forces to prevail, ergo the pronounced shortages of rental housing.
Metro Vancouver remains one of the most desirable places in the world in which to reside. Yearly population increases of 30,000–40,000 are a given, with a majority of migrants arriving as tenants. Additionally, with the advent of dramatic price increases over the past 5-6 years in market condos and single-family housing and the further difficulty in saving for first-time and middle-class buyers, the housing focus has shifted to rentals. For added supply and reinvestment in this sector, anti-market forces must be relaxed or lifted.
We should acknowledge that, as a commodity, rentals are a must-have in our society. Notwithstanding the current sentiment in the market, investment in this asset ought to be regarded as long-term and will continue to generate positive returns for their owners. Market forces will realign and ultimately prevail, as they always do.
Celebrating 36 years of publishing The Goodman Report