Vancouver residents earning more than $150,000 a year do not have enough rental units available that are appropriate to their incomes, according to city hall.
These are purpose-built rentals that they can pay using 30 percent of their incomes, which is the threshold for housing affordability.
This translates to a monthly rent of $3,750, notes a city staff presentation to council Wednesday (July 24).
What’s happening is a “mismatch between existing rental stock and renter incomes”, according to the slide report.
The report pointed out that this situation has consequences.
“Not enough new rental means higher income renters are living in the existing older, more affordable rental,” according to the slide report.
The presentation also noted that likewise under-served by existing purpose-built rentals are people earning between $80,000 to $150,000.
Using the 30 percent threshold, these are residents who can afford rents between $2,000 and $3,749.
The report noted that residents earning $50,000 to $80,000 are better served by existing rental stock.
Affordable housing for people with this income range means rents of $1,250 to $1,999 per month.
The figures cited in the report were drawn by city staff from the market rental survey of Canada Mortgage and Housing Corporation, and the 2016 Census of Statistics Canada.
The supposed “mismatch” between the rental stock and renter incomes is one aspect of the staff report that dealt with initial findings of a review of the city’s incentives program to encourage rental development.
These incentives include exempting developers from paying development cost levies (DCLs), increased heights and densities, and reduced parking requirements.
“Rental is only marginally viable, even with current incentive programs,” according to the staff presentation to council.
In June this year, council approved a typical rental project that the city supports through various incentives.
The project at 708-796 Renfrew Street will have a starting rent of $1,607 for a studio. This is affordable for people with incomes of $60,000 to $69,999.
A one-bedroom at the Renfrew Street development will go for $1,869. It’s for people earning $70,000 to $79,999.
A two-bedroom unit is $2,457 a month. It’s good for renters with incomes of $90,000 to $99,999.
A three-bedroom unit is $3,235. It’s for people earning $125,000 to $149,999.
Councillors Pete Fry and Jean Swanson voted against the 708-796 Renfrew project.
Going back to the staff presentation to council, the report also cited a recent study by the NYU Furman Center, a New York-based research group.
The report noted that the study found that “new market rental can alleviate pressure on older rental stock”.
Also, there is “little evidence to suggest new market rental housing increases rents in older existing housing”.
A news release by the city stated that assessments by two consulting companies show that the rental incentives over the last 10 years have been “successful” in creating new homes.
The release noted that the analyses were made by CitySpaces Consulting and Coriolis Consulting.
“The City’s incentive programs have been successful in delivering new rental housing, and since 2009, over 8,700 new purpose-built rental units have been approved city-wide,” according to the news release.
The release also noted that incentives like DCL waivers from the city are “necessary to help close the financial gap between rental and strata condominium projects”.