Updated on October 21, 2014
NPA pledge to kill Vision’s Rental 100 would be just in time to miss emerging revival of rental construction
Vancouver’s David and Mark Goodman, veteran observers of the rental real estate sector, say last month’s Canadian Apartment Rental Investment Conference confirmed the widespread industry view that Canada is poised at last for a revival in rental apartment construction.
What’s driving the revival? According to Goodman, it’s precisely the kind of programs Vancouver has pioneered with Rental 100, the program the NPA’s Kirk Lapointe has pledged to kill if he’s elected Mayor.
Recognizing at last that very little purpose-built rental stock has been added over the last four decades, cities and suburbs have been relaxing fixed municipal charges, providing density and height bonuses, reducing parking requirements and allowing for smaller suite sizes. (Emphasis added.)
Demand for these new buildings among investors and tenants alike appears almost limitless, while low financing and mortgage rates provide strong incentives for construction.
Given sharply escalating condo prices, many potential buyers are instead turning to new purpose-built rentals that feature all the modern and elegant amenities while providing today’s discerning tenants new found financial flexibility.
Normally residing either in condo rentals or in aging 50-year-old structures devoid of amenities, tenants are now seeing the clear advantages of the newer purpose-built rentals, where they may enjoy superior caretaking and management, party rooms, gyms or pools and a sense of community, without the risk of being dislodged by condo owners.
Only Vancouver, of all the Metro municipalities, has a program like Rental 100 to support the expansion of this critical source of less-costly housing, although New Westminster has been developing its own version.
Mayor Gregor Robertson has pledged to continue Rental 100, committing to seek 1,000 new rental units annually. Given the improving economics of rental, this goal may be too low. But if Kirk Lapointe is elected, we’ll go backwards — and miss this positive change altogether.