Vancouver's stratospheric housing costs have driven the city to groundbreaking interventions to make more rentals available. Those policies include the city's recent efforts to extract hefty special additional fees from developers doing rental projects and a refusal in some zones to grant extra density for rental projects.
But some developers and housing advocates say the city has actually obstructed – not helped – efforts to build the kind of projects Vancouver says it wants, prompting at least a few to walk away from potential projects that would have produced hundreds of units.
For decades, the city has extracted money from condo developers for services such as parks, libraries, housing, heritage restoration and more through negotiations over what are called "community amenity contributions," or CACs. Those CACs, which get layered on over other fees all developers are required to pay, are applied only to rezonings and have generated tens of millions of dollars, especially in recent years.
Property owners developing rentals never used to pay those fees. In early decades, it was because no one was building rentals at all – condos were far more profitable. As of 2009, when the new Vision Vancouver council created incentives for rental construction, the city was giving developers breaks to build, not charging them extra. But in the past few years, as builders got more comfortable with the economics of building rental projects, developers started opting for rezonings to do all-rental towers. The city's real estate department began negotiating for CACs as land values soared.
Cressey, a company that started as a rental-only business and later became a condo developer, just got city approval this week for a rental project near Olympic Village, one that was included in a news release from the mayor's office, highlighting the 477 units of rental and social housing and noting, "Vancouver is doing more than any other city in Canada when it comes to housing."
That has included Canada's first sin tax for homes left vacant and a radical new housing policy emphasizing creating purpose-built apartments geared to rates local residents can afford.
Two weeks ago, Vancouver introduced a 10-year housing plan that envisions building 36,000 units of rental in the next 10 years – a target that was specifically designed to create more affordable housing in the city. City officials say they are trying their best to keep up with the changing economics of rental to ensure that the supply keeps coming, but acknowledge that it's a challenge.
Those forging ahead with projects say they are not sure whether they will continue in the future, asserting that rentals have become increasingly difficult to build because of a maze of contradictory demands and agonizingly slow permitting times.
Sourced/Edited from: The Globe and Mail