While the Evergreen Extension may be a boon for commuters, it could be making it harder — and more expensive — to find rental accommodations in the Tri-Cities.
According to a new analysis from the Canada Mortgage and Housing Corporation (CMHC), rents in Coquitlam, Port Coquitlam and Port Moody rose 11% in the last 12 months. That is the largest increase in the region, which saw a 5.9% overall rise.
Eric Bond, CMHC’s princi-pal market analyst for the Vancouver Census Metropolitan Area (CMA), said the demand for housing in the Tri-Cities is likely linked to the opening of rapid transit last December.
“If people are looking to locate themselves to a more affordable area, one near rapid transit would be ideal,” he told The Tri-City News. “Hence, we have seen increases in rents because the relative value of those units have increased and demand has increased.”
Rents have risen across all property types. One-bedroom units saw the sharpest rent hike at 13% while two-bedrooms increased 9.4% and three-bedrooms rose 9.6%.
The Tri-Cities have also seen a decline in unit availability.
While the rest of the Vancouver area has seen an overall rise in vacancy rates, moving from 0.7% to 0.9%, Coquitlam, PoCo and PoMo have seen their figures fall 25%, from 1.6% to 1.2%.
“The rental market has been tight across the Vancouver CMA,” Bond said. “Certainly, that demand extends to the Tri-Cities as well… As a result, you are seeing the highest increases in rents.”
As demand for rental units has skyrocketed across the region, municipalities are scrambling to catch up.
CMHC said the Tri-Cities currently have 322 purpose-built rental units under construction and more appear to be in the development pipeline.
For example, the city of Coquitlam has approved 650 new rental units, 140 of which are below market rental value, and another 2,000 units have begun the application process. In Port Moody, council recently approved a 142-unit rental building on St. Johns Street east of Moray, the first development of its kind in the municipality in 31 years.
But in the short term, constructing new rental buildings can mean a loss of overall units. According to CMHC, 221 apartments and 29 townhouses have been taken off the market in the Tri-Cities in the last year, largely to make way for redevelopment projects.
Andrew Merrill, Coquitlam’s manager of community planning, said the 4.9% decrease in overall rentals is due to the fact many of the new units are being built on sites that previously had rental housing.
“There is a lag time between the removal from the market of the older product and the construction and occupancy readiness of the new units in the development pipeline,” he said in an email.
But that redevelopment work will lead to a net gain in overall rental units, he said, noting, for example, the 100 new rental apartments included in a recently approved project at Clarke Road and Como Lake Avenue.
“We are forecasting a similar trend until 2019, when substantial amounts of new rental in the pipeline are expected to be completed and the new units ready for occupancy will substantially outnumber lost units,” Merrill added.