When Kennedy Stewart entered the Vancouver mayoral race in 2018, he made housing rentals his top priority. The former NDP MP promised 85,000 new units during the next decade, including 25,000 affordable rental units on city land.
Another 25,000 units, he promised, would be market rentals. The remaining 35,000 would be homes that would go on the market.
At the time, it seemed far-fetched to some in a city that has prized strata-title condos over virtually any other form of real estate during the past 30 years. The NPA's housing policy mostly consisted of promising more basement suites to deal with the shortage of apartments.
But 21 months after being sworn into office, Stewart appears to be making progress.
“I had a pretty clear idea of why I was elected,” Stewart recently told the Straight in a phone interview. “It was really to move away from displacing folks when we’re building new housing—and to move away from building condos and move toward building rental.”
On July 29, council voted 10-1 in favour of allowing 81 units in a four-storey apartment project at 4750 Granville Street and 1494 West 32nd Avenue. It’s in the city’s posh Shaughnessy neighbourhood, which has traditionally been a bastion for wealthy homeowners.
“To replace two mansions with 81 rental units—in a part of the city where that has not been happening—is great,” Stewart said. “I said last night, ‘I hope to see more of these.’ ”
Stewart wants pilot project to be permanent
The previous night, council approved nine units of secured market rentals in two new buildings that will be built at 6031 Dunbar Street. To date, this has been an area filled with single-family homes.
The rents won’t be cheap in either project. A report to council indicated that a one-bedroom unit in a newer building on the West Side costs tenants $1,999 per month. The monthly rent for a two-bedroom in such a project would be $3,059, compared to $3,836 for a three-bedroom. However, these rental rates will still enable residents with household incomes of between $79,760 to $155,040 to live in Shaughnessy.
To own a new two-bedroom or three-bedroom unit in a new West Side building would require an average household income of between $207,640 and $342,840, according to the same report.
Stewart said that market rentals like this are important because they provide housing for a segment of the population that might otherwise want to move into more affordable rentals on the East Side. But he’s particularly enthusiastic about the city’s Moderate Income Rental Housing Pilot Program, which will enable up to 20 rezonings for new buildings.
To qualify, developers must provide 100 percent of the residential floor area for “secured market rental housing”, which means they cannot be converted to strata-title condo units.
In addition, a minimum of 20 percent of those units must be kept permanently in place for households with incomes between $30,000 and $80,000.
“The MIRHPP is just a pilot,” Stewart emphasized. “But I really think it is the way forward and it should be permanent.”
There will also be a large increase in rental housing as a result of the Squamish Nation approving a $3-billion project on its land in Kitsilano. This will include 6,000 new units in 11 towers.
Plus, MST Development Corporation—owned by the Musqueam, Squamish and Tsleil-Waututh—is proceeding with a large project on the Jericho Lands in partnership with Canada Lands Company.
Other mayors wonder how rentals are being built
Earlier in July, council narrowly approved 258 secured rental units in a 28-storey tower that will be built on the old Denny’s restaurant site at the corner of Birch Street and West Broadway.
According to the city, 22 percent of the residential floorspace will be for units targeted at residents with family incomes of between $30,000 and $80,000 per year. A city document mentions that under the program, a studio MIRHPP unit will cost $950 per month; a one-bedroom unit will rent for $1,200; two bedrooms will go for $1,600 per month; and a three-bedroom apartment would cost $2,000 per month.
The first three of these projects were approved unanimously in December 2019. Stewart said that mayors across the country have contacted him to find out how Vancouver has been able to stimulate the development of affordable housing on private land.
“The old rote is, ‘Oh, well, the city provides land and then the province and feds kick in the money.’…But the workers in the city have really been falling through the cracks,” Stewart said.
The mayor hasn’t always succeeded in getting his way. In May, NPA councillor Colleen Hardwick managed to win the votes of every member of council except Stewart and OneCity’s Christine Boyle for a motion seeking to reexamine how many housing units needed to be built in Vancouver post–COVID-19.
The “Housing Vancouver” targets set by the previous Vision Vancouver–controlled council called for 72,000 new homes between 2018 and 2027.
Hardwick questions the numbers
Hardwick’s motion directed staff to determine whether that figure referred to net housing completions or gross housing completions.
The NPA councillor stated in her motion that the target of 72,000 new homes would translate into a population increase of 158,400—more than twice the historical rate.
She based this conclusion on an assumption that each home will have 2.2 residents, which was the density rate in the 2016 census. Whether that materializes in the future, however, is anyone’s guess.
But Stewart has been pleased to see the B.C. government step up and buy three hotels (the American, Howard Johnson, and Buchan hotels) and provide modular housing.
“I expect that we’ll have modular housing coming soon—more modular housing from the province—and that’s very helpful,” Stewart added.
But he’s still looking for help from the federal government. The city has set aside land in the hope that Ottawa will fund 300 units of modular housing for the city’s poorest residents.
“We did have an initial investment of $184 million,” the mayor acknowledged. “I don’t know how many meetings I had to get that money. That was for deep affordability, but now we just really need help with modular housing.”
In the meantime, a B.C.-based "expert panel" is expected to come out with an interim report this summer on the future of housing supply and affordability.
Created by the federal and provincial governments, it's sought feedback from academics, researchers, planners, economists, policymakers, and members of the public on real estate.
Incentives for municipalities
One of those who presented ideas was Vancouver real estate marketer Bob Rennie.
In an interview with the Straight, Rennie said he suggested that the federal government offer incentives to municipalities to approve projects within 12 months of an application being filed.
"Maybe it will have to be 18 months," Rennie conceded. "Smarter people than me will figure it out."
He proposed that the feds offer "$15,000 per door" for every unit of nonmarket and social housing approved within this time frame.
A municipality would receive $10,000 per door for every unit of market rental housing.
And the payment would fall to $7,500 per door for market homes under a certain threshold—perhaps $1 million in Vancouver and $750,000 in the rest of the region.
According to Rennie, this would provide planners, mayors, and councils "some political cover to incentivize supply and to keep rents down".
There's already been some downward pressure on apartment rents in Vancouver, due in part to the lack of tourists.
Anyone who's been paying attention to Craigslist housing for rent posts has probably noticed Airbnb units being converted to long-term apartment rentals.
Just key in "housing rentals for me" or "housing rentals near me" on Google and see what pops up.
"We have had a number of large and small rental property owners—some owning many, many buildings and some owning a few—[come before council] and they're saying they're already seeing a drop in rent," Stewart said.
Other propery owners have told Stewart that it's taking longer to lease buildings.
"However, our rents are so outrageous that a 10 percent drop is not enough," the mayor stated. "That's why we need to attack this from all angles—increasing supply at all levels of the housing ladder."
Some, including Coun. Colleen Hardwick, have suggested that demand for housing will decline as a result of the pandemic. That's because it could reduce the number of immigrants and international students moving to Vancouver over the short term.
Rennie, however, said that even if there's a lull in immigration, it will pick up in the future. That's because by the end of the decade, there will be more deaths than births in the province.
In addition, he predicted that housing demand will be spurred on by the thousands of new jobs being created in office space being developed for Amazon, Microsoft, and Spotify, among others.
"We need immigration," Rennie declared, "or there will be nobody to pay taxes 25 years from now."