Restrictive new policies on rental properties being considered by the province could stifle the construction of new units, according to a development industry association.
But at least one local city has seen no evidence of this.
The Urban Development Institute said this week it has surveyed 30 members and found that thousands of proposed units could be in jeopardy if rent and vacancy controls are put in place.
“British Columbians desperately need more rental homes,” said UDI president and CEO Anne McMullin. “This is not the time for new restrictions that could result in the cancellation of important rental home projects in communities across British Columbia.”
According to UDI’s report, the 30 respondents that participated in the survey have 65 projects representing 19,972 rental units currently in development across British Columbia. Of that total, UDI states that 12,631 units could be at risk if more restrictive rules are put in place.
In the Tri-Cities, the survey found that 2,010 of the 2,251 units (89%) being built by survey respondents in eight projects could be in jeopardy.
But Jim McIntyre, the city of Coquitlam’s general manager of planning and development, said so far his department has not seen any signs that developers are rethinking rental projects in the municipality.
“We haven’t had applicants contacting us,” he said.
He noted that many of the rental units under development are tied to larger strata projects. For example, a 49-storey highrise at Como Lake Avenue and Clarke Road was approved by council last year with the understanding that a 15-storey purpose-built rental building would be included as a component of the project.
“Most of these are units embedded within a larger project specifically slated for rental,” McIntyre said. “It kind of goes part and parcel.”
| Development Stage | Strata Units | Market Rental |
Below-market/Non-market rental |
Total Dwelling Units |
|---|---|---|---|---|
| Pre-applications | 6,596 | 1,221 | 677 | 8,481 |
| Development/Building Permit | 13,832 | 2,854 | 255 | 16,932 |
| Under Construction | 2,216 | 155 | 14 | 2,385 |
| Total | 22,644 | 4,230 | 946 | 27,798 |
The number of actual units in the various application stages of development in Coquitlam is significantly higher than the figures put forward in the UDI survey, he added. As of Aug. 31, for example, Coquitlam had 4,230 market rental units and 946 below-market either in pre-application, the permit stage or under construction.
UDI’s survey comes as the province’s Rental Housing Task Force is expected to put forward new recommendations around rental housing policy later this month. The committee has already made an early recommendation calling for changing the allowable rent increases in the province from inflation plus 2% (an estimated 4.5% increase in 2019) to inflation only (an estimated 2.5% for 2019). “We have seen a huge take-up in market rental,” McIntyre said. “It is encouraging that a combination of market forces and developers have seen this as a promising area.”
It has been reported the task force is also considering tying rents to units, meaning landlords could not raise rates beyond the allowable increase after a tenant moves out.
If the policy changes are implemented, it will have an impact on the amount of purpose-built rental being constructed in the region, according to Coquitlam Mayor Richard Stewart.
He told The Tri-City News that while projects already under construction will likely go ahead, developers considering acquiring land for future rental construction may be reticent to move forward. Most developments require financing, he said, noting that banks will take an objective view of whether a project is financially viable.
“If the project doesn’t work because of the risks involved, it is much more likely to be on the rental side than on the parts that would be for sale,” he said.
Stewart added that he would not be surprised if some applicants with projects in stream brought them back to the city for revisions if rental rules are changed.
gmckenna@tricitynews.com
@gmckennaTC
