To get a better understanding of Vancouver’s expensive housing market, The MIX collaborated with About Here to see what the city can do to help bring down the rising costs of land and property.
As our first YouTube collaboration ever, we wanted to make sure we spoke with someone who had a solid understanding of the city and the urban planning projects to make it better. About Here Founder Uytae Lee gave us a breakdown of what’s up and his hypothesis on why real estate in the city is so bloody expensive.
One look outside and you may notice that Vancouver’s rental apartments, all kind-of look the same. You know that look: boxy, simple, repetitive designs with lots and lots of concrete. Not only is this design unappealing but it could be one of the variables that are making this city unaffordable.
There’s a reason why Vancouver’s rental apartments look the same. Most of them were built around the same time.
If you look at the construction dates of all the current rental apartments in Vancouver, you’ll find that the majority of them were built between 1950 and 1980. This means Vancouver hasn’t really built any new rental apartments since the 80’s.
The Problem: Vancouver’s rental market is crazy
Vancouver’s a growing city so we have more and more people looking for places to rent. And when the number of apartments available for rent hasn’t really changed in decades, well you might end up with this – 0.9%.
This is the percentage rate of Vancouver’s rental vacancy rate in 2017, among the lowest in Canada. The lack of options is one of the contributing factors of making this city less and less affordable.
Exploring the problem: Apartments don’t make financial sense
It’s clear that Vancouver urgently needs more rental apartments so why haven’t we built more of them? Well, think about what does get built in Vancouver – condominiums.
A report for the city of Vancouver studied this issue and it’s findings suggest that developers can earn between 30% to 50% more revenue from building condominiums rather than rental apartments. It’s not that apartments aren’t profitable but, with Vancouver’s crazy housing market, building condos is just a lot more lucrative
Exploring the problem: Government Actions in the Past
But there’s another key factor here – the government. The main reason we have all these apartments from the 60s and 70s is that that was a time when governments were much more supportive of rental apartments.
Basically, both the federal and provincial governments used to offer tax incentives and programs that made it much more lucrative to build rental apartments. All of those incentives were taken away by the 1980s and the fact that we’ve built very few apartments since then is not a coincidence.
At the same time, the government continues to be very supportive of owning property. Today, there are several tax incentives, grants, and other programs that help people BUY property in Canada. But virtually, none of those supports exist for people that want to rent.
Though it appears the odds are stacked against rentals getting built at all in Vancouver, recently, it looks like things might change.
In Vancouver, newly introduced policies like Rental 100, offers incentives for building rental apartments, like reducing parking requirements and waiving development fees. When you consider developments that are planned in the future, this decade is looking like it might be the first to build more rental housing in Vancouver since the 1960s.
That’s the silver lining. The housing crisis can often feel like a hopelessly complex problem, one that’s beyond our control. But the lack of rental housing is something that we know how to solve from experience. And the more we become aware of that, the more likely we’ll be able to get our rental apartments out of the 1980s.