In our fair City & Districts of North Van, not only is there incredibly low supply of market housing, but also of rental housing. Today, the vacancy rate is something like 0.7% – ouch! We’re always surprised at what people have to pay for rent, and we’re sure it’s close to or above the 30%–at most–that Canada Mortgage and Housing Corp., along with most other housing agencies, recommend that people spend of their pre-tax income in order to have a roof over their heads.
There IS some GOOD NEWS on the horizon. In the next 1-2 years, the rental stock in the Lonsdale corridor is going to increase. While it’s not going to make a huge dent in your monthly outlay, increased supply should take some of the pressure off.
Here’s how it all adds up:
In a brand new for-market development, rentals are typically unlimited at first, as the “Standard Bylaws” from the Strata Property Act apply until the ownership, with a majority vote, changes those Bylaws.
So, in the current building frenzy there are roughly 400 suites under construction* and a good percentage of them could very well have been purchased by investors looking to add to their portfolios.
While the primary purpose of condominium construction is for homeownership, there is an upward trend in buyers investing in one or more condominiums and then renting them out, resulting in a supply of rental units. CMHC’s October 2011 Rental Market Survey of 11 city centres showed an overall increase in condominium rentals with an average vacancy rate of 2%, well below the balanced vacancy rate of 3%. In some markets, condominiums play a significant role in rental housing. A 2008 CMHC survey of the Vancouver rental market showed that 27% of Vancouver’s condominium stock, and 8% of Ottawa’s, was rented. Despite this pocket of rental condominium housing, vacancy rates remain low in these cities. Condominium development also contributes to the erosion of affordable rental. Cities are seeing an overall decline in rental units where the trend is to convert apartment buildings to condominiums, instead of building new condominiums. Condominium rental prices are consistently higher than apartment rents in cities in CMHC rental market survey including Toronto, Ottawa, Calgary and Vancouver. **
**Source: Federation of Canadian Municipalities Report 2010, “No Vacancy – Trends in Rental Housing in Canada” http://bit.ly/1lXPRRV
Additionally, in the specifically “For Rent” department, there are 188 new rental units to be built in the City within the next 2 years:
362 – 368 East 3rd Street
The City of North Vancouver has received a Development Application from Hearth Architectural, to rezone the properties at 362-368 East 3rd Street and consolidate the two properties to allow for the construction of a six storey, 40-unit market rental development.
161 – 165 East Keith Road
The City of North Vancouver has received a Development Application to amend the Zoning Bylaw to permit a 93 unit Residential Development, of which 52 units to be stratified and 41 units will be rental housing. Council granted final adoption of this application in February.
141 – 147 East 21st Street
The City of North Vancouver has received a Development Application to amend the Zoning Bylaw to permit a new six-storey residential rental apartment building with a total of 107 units. Council granted final adoption of this application in March.
Municipalities are–if even just a little–beginning to fathom the need to provide incentives to facilitate rental developments, and that seems to be the case. Both the City & Districts of North Van have added to the rental supply by allowing secondary suites and coach houses. But, individual municipalities can’t fix this problem on their own. Most specifically-for-rental housing in Canada came from the federal incentives in the 1960’s thru 1980’s. Those programs were shut down in the mid 80’s, and none really have surfaced since. The Federal Government did address the dire need for rental housing in their pre-October election dialogue. It remains to be seen if they’re going to live up to their promise. In the meanwhile, there’s a little bit of light at the end of the rental tunnel.
Buildings currently under development
Centreview – 1308 Lonsdale 114 units
West Quay – 255 W 1st & 260 W Esplanade 68 units
The Anchor – 131 East 3rd Street 56 units
First Street West – 117 West 1st 60 units
Trophy – 199 Victory Ship Way 108 units
Total 406 units