Vacancy rates rise as home prices slip in Regina

In 2019, 7.8 per cent of apartments sat empty, city official reports

Regina’s rental market hit a 30year high vacancy rate, according to the City of Regina’s 2019 annual housing update.

The rental vacancy rate in Regina has steadily increased while the price of buying a home has levelled off recently, but is now trending down according to the report.

The average price of a home in Regina declined from 2018 to 2019. Last year the average sales price was $283,994 compared to $301,400 in 2018.

For rentals, the vacancy rate hit 7.8 per cent last year.

Charlie Toman, senior city planner, said the vacancy rate held relatively steady from year to year, increasing slightly to hit a record high.

“This is the eighth straight year there has been a year-over-year increase in the vacancy rate, which is the highest this city has seen in over 30 years,” said Toman.

The vacancy rate does not take into account affordable and social housing units which have a much lower vacancy rate.

In terms of affordability of rental units, Toman said “approximately 46 per cent” of renters spend more than 30 per cent of their income on housing. That figure is based off 2016 census data and may have changed, but Toman was not able to speculate as to what the number looked like in 2019.

The Comprehensive Housing Strategy presented before the Mayor’s Commission on Wednesday did not take into account the impact of COVID-19 and was based off 2019 estimates and observations.

The city placed a limit on the number of grant capacities for affordable housing units available in Regina despite high demand for such rentals.

“Through previous reviews of the Housing Incentive Policy in 2015 and 2017, we were seeing an increase on the number of affordable home ownership applications,” said Toman. When the housing market started to soften, he said, the city switched focus to offer more opportunities for affordable rentals instead of purchases.

There was also considerably less construction last year with 456 housing starts. The five-year average was about 1,500 according to Toman.

“This decrease can be attributed to a few different factors including sluggish employment growth especially in full-time jobs,” he said.

Coun. Andrew Stevens ( Ward 3) sought clarification on how the city planned to address a “market failing” of record high vacancy rates but low vacancy rates in affordable housing.

“Something seems to be disconnected here. Why do we keep bringing new housing units online if we have massive vacancy rates?” asked Stevens, who followed by asking if there was some way to get people into existing vacant units.

Toman said the Housing Incentives Policy (HIP) funds two kinds of housing — affordable and market housing. And in recent years there has been a walking back of HIP funding for new market rentals with the incentives being redirected to address the demand for affordable housing.

As for how to get people into existing vacant units, Toman said a change to the HIP may help. A rental repair tax exemption program funded through the federal government will give money to landlords for the purpose of improving old rental units.

But, that funding is contingent on certain units within the renovated or repaired building being offered at “below market rate,” according to Toman.

Something seems to be disconnected here. Why do we keep bringing new housing units online if we have massive vacancy rates?