By Sean Cassidy
The province of B.C.’s recent announcement to adjust the rental rate formula down to inflation was a welcome move for renters. However, with demovictions across the city, escalating rental rates, and a low vacancy rate, accumulated under a disastrous decade of Vision Vancouver, the next Vancouver mayor will need to be a strong advocate for renters to undo this damage.
Unfortunately, the two current leading mayoral candidates, independent Kennedy Stewart and NPA Ken Sim’s platforms for renters have no substance. Let’s examine their plans and propose some real alternatives.
Kennedy Stewart sat on the sidelines as an MP in Burnaby while his constituents were being demovicted left, right, and centre. It is therefore not surprising that Stewart’s renters' platform parrots Vision Vancouver’s existing renter protection policies, offering no new ideas. Continuing the status quo without any radical ideas will not help renters in the current market conditions.
For example, Stewart promises to work with for-profit developers to automatically build thousands and thousands units of laneway houses and purpose-built market rentals, but mentions no measures that will ensure those rentals are affordable.
On the other hand, NPA candidate Ken Sim’s platform for renters is to “reduce municipal taxes, fees, and charges for laneway homes and new secondary suites that house long-term renters”. This amounts to minute savings for small private developers and homeowners, which he hopes will translate to “trickle down affordability” for renters in precarious unsecured housing.
Renters need a strong mayor who will create a renter-friendly environment and advocate for them. As a former senior government official at CMHC who co-financed billions of dollars of purpose-built rentals across Canada, financed real estate development projects for Royal Trust (now Royal Bank), did consumer mortgage financing, as well as worked for a developer managing rental property, I understand what renters need.
First, the next city council should exercise its ability under the Vancouver Charter to set and regulate market rents and the rate at which they increase for projects they approve. Currently, developers apply for a project that lays out the rental rates they plan to charge, but that rate applies right at the time of council approval, not occupancy.
Therefore, by the time the project is built and occupied, the resulting rents have inflated massively from the initial commitment. Market rental rates are now at astronomical prices, reaching almost $2,000 for one-bedroom and over $3,000 for three-bedrooms. This is unsustainable in a city where incomes have stagnated compared to rising housing costs.
The past city council composed of mostly of Vision Vancouver and NPA councillors was unwilling to use its ability to regulate market rental rates. When the market is failing a significant population of citizens who are renters, we need a mayor and council that is willing to regulate rents for affordability.
At the same time, if we start regulating rents in a time of rising project financing costs due to increasing interest rates, we also need to ensure that developers are still encouraged to build secured market rental housing instead of condos that are more quickly profitable. On top of that, rental projects are harder to finance compared to condos projects, which benefit from construction loans secured by presales.
The city already provides some incentives through parking relaxations and development-cost-levy waivers for projects meeting certain requirements, but more can be done. The next mayor and council need to actively advocate for higher levels of government to provide tax incentives for rental projects.
An example is the U.S. housing tax model, which helped incentivize the creation of the Colwell rental apartment building in downtown Seattle, among others. If Vancouver is to be a renter-friendly city, all levels of government need to work together to align incentives for builders, but protect renters at the same time.
Secondly, with low vacancy rates, we must ensure that any existing housing supply should be used to house long-term renters first. Short-term rental (STR) services like Airbnb have turned housing into attractive cash-flow models instead of homes for people. Vancouver should ban all STR operations until the city and STR providers can implement stronger data-sharing tools to remove currently over a thousand illegal STR operations in the city.
If STR services fail to comply, then the city must hold them responsible and fine them heavily. This move will likely immediately free up long-term rental supply back into the market.
Lastly, we need to stop renovictions. Renoviction is also a form of speculation where landlords renovate to push up rents—sometimes even triple the original rent. Often, the renovations are minor in nature or ill-transparent, because its primary purpose is to generate more income for the landlord, not building improvement.
A timely renoviction example is Berkeley Tower in the West End, where the new owner, Reliance Properties, is converting almost 60 units of existing affordable housing into high-end market rentals, pushing long-time tenants out as a result. In order to stop such renovictions, we need to advocate for rent increases to be tied to the unit, not the tenant.
Should landlords choose to renovate, they need to lay out why the renovations are occurring, and the future rent they plan to charge, before the city issues their permits.
It is time for Vancouver renters to have a mayor who has a strong housing background and is unafraid to advocate for bold renter policies. I am that mayor.