B.C. residents say that affordable housing is the top election issue according to several polls. All three major political parties have said that they have plans to increase the supply of affordable homes. Also, stakeholder groups like the BC Rental Housing Coalition, The Greater Vancouver Board of Trade and, an amalgamation of construction and housing industry associations, all have advanced plans for the delivery of affordable housing supply. These range from creative solutions like community land trusts to measures targeting the “missing middle”, a term applied to housing form. LandlordBC collaborated in varying degrees in the development of all three of these stakeholder plans. The fact is we need innovation across the housing continuum and each one of these plans has merit and warrant serious consideration by the major provincial political parties.
While we can all agree that the solution to the current predicament is to increase supply, it is really the “right supply” that is most important. In the federal budget of March 22nd, we saw that the Liberals will increase funding to support the most vulnerable families with more than $11 billion being allocated toward social and affordable housing projects. The Liberal government in British Columbia had similarly provided very generous funding aimed at this area of significant need. And the impending National Housing Strategy is expected to provide additional supports to this demographic. This combination of programming and funding is great news and will allow us to now focus on supply for other demographics with particular attention on middle class workers and their families.
The fact is many of our kids can’t find suitable housing, and it’s not like they haven’t prepared themselves. They have a degree or two or a Red Seal Certificate and are making a decent income. Without the support of families to buy their own home, these kids need access to affordable market purpose-built rental housing.
Most of British Columbia’s purpose-built rental stock was built between 1960 and 1980. As a result, many buildings are now approaching the end of their useful life and are falling into disrepair. If we are to meet the rental housing supply requirements for today and tomorrow, the number of homes available in the private rental housing sector must increase significantly. This will often require the thoughtful and responsible redevelopment of existing purpose-built rental properties with new purpose-built rental housing given the lack of developable land in many communities across the province.
Even though we are seeing more purpose-built rental housing being built today, the vast majority of new multi-unit residential housing continues to be condos, and that’s because barriers have favoured the construction of condos over purpose-built rental for decades.
Chief among those barriers is the issue of risk mitigation. The developer of a condo can pre-sell part or all of a project to individual buyers at any price she chooses before putting a shovel into the ground. Financial viability for the purpose-built rental developer is much more tenuous. As long as this imbalance of risk and reward continues to present itself, developers will continue to choose to build condos over purpose-built rental housing as we still see today.
We ask instead that the political party that forms government on May 9th immediately remove this impediment to building new market purpose-built rental supply and provide other considerations to achieve the scale of development needed. In my mind, building more purpose-built rental is the single element that will improve the low vacancy rate over time. Demand and population growth to live in key areas of BC are likely not going to change drastically, so adding to the purpose-built rental supply is the best solution.