New Westminster’s Jonathan Cote suggests strategies to improve rental housing in the Lower Mainland
New Westminster’s Jonathan Cote is one municipal politician to watch. Young and articulate, the third-term city councillor has his finger on two important issues in the Lower Mainland: housing and transportation.
These are also the focus of his research as a student in SFU’s urban studies program. This puts him in the enviable position of being able to test his ideas in the real world while earning a master’s degree.
Cote will do just that with his recent academic report on rental housing. He plans to submit his work for discussion by the New Westminster council. He also intends to share his paper with other municipalities and the Metro Vancouver regional district body where he is an alternate director.
“Everyone is aware of the affordability challenges in Metro Vancouver, but I think it’s not quite understood that this is a problem that’s actually going to get a lot worse in the future,” Cote told the Georgia Straight in a phone interview.
By pursuing this subject, Cote is fulfilling one of his campaign commitments in the last election. The father of two promised to make affordable housing and the protection of existing rental stock a priority.
In “Worth Saving: Changing the Economics of Rental Housing”, he outlines a package of five measures that municipalities can put in place to encourage the construction of rental housing and preserve existing stock.
“In 20 years, you’re going to have continued redevelopment pressures…so let’s start to actually tackle and ask questions now,” Cote told the Straight.
In his paper, Cote suggests that one option local governments can consider is the creation of rental land reserves. This will limit non-rental development on sites used for purpose-built rentals.
“Given that the issue of rental housing is a regional one, it would make sense to incorporate a rental land reserve bylaw within Metro Vancouver’s Regional Growth Strategy,” the report states. “This would provide consistency across the region and ensure that access to rental housing was provided in most cities in Metro Vancouver.”
Another measure involves density transfer. “This policy would allow owners of existing rental properties to sell their unused density to neighbouring developments,” Cote’s paper explains. “Redevelopment pressures are significantly reduced if excess density entitlements do not exist on a rental property.”
The third measure proposed by Cote is the elimination of minimum parking requirements for rental projects that are within 800 metres of a “frequent transit stop”. “By allowing the market to determine the appropriate amount of parking for a site, the financial viability of a rental project would increase substantially,” the paper states. The paper defines a frequent transit stop as one that is serviced by transit at least every 15 minutes for a minimum of 12 hours a day, six days a week.
According to Cote’s report, underground and on-site parking represent up to 25 percent of development costs, ranging from $35,000 to $40,000 per stall. If parking requirements were eliminated, development costs would be reduced by $46 per square foot.
“Given that the minimum financial gap between rental and strata is $52 per square foot, it is clear that parking represents a big opportunity to solve the economic disparity between rental and strata developments,” the paper argues.
The fourth measure identified in Cote’s paper covers development fees. He suggests that if fees were reduced by 50 percent, development costs would be about $7 per square foot lower on new rental projects.
“This incentive alone will not alter the economics of rental housing, but if combined with other incentive[s] it could tip the scale enough to see the development of new rental housing in the region,” the paper states.
Cote’s fifth proposal takes a page from Vancouver’s Short Term Incentives for Rental program that ended in December 2011. “This type of a policy would work best in areas that are already pre-planned for increased density,” the paper states. “A density bonus system could be developed that charges levies on market condo projects, but leaves rental projects exempt from such levies.”