Pur­pose-built rental units face hur­dles: in­dus­try

De­vel­op­ers put off by ris­ing land val­ues and com­pet­ing hous­ing poli­cies

Vancouver Sun - - CITY - jlee-young@post­media.com JOANNE LEE-YOUNG

De­vel­op­ers, in­clud­ing some who have been reap­ing the gains of sky­rock­et­ing pre-sale condo prices across Metro Van­cou­ver, say more rental stock needs to be built.

City plan­ners, the lenders who fi­nance projects and, of course, would-be ten­ants all agree adding pur­pose-built, rental units can tem­per the hous­ing cri­sis.

But es­ca­lat­ing land val­ues as well as con­flict­ing and com­pet­ing hous­ing poli­cies are con­spir­ing to make this a chal­lenge, ac­cord­ing to a panel mod­er­ated by Cyn­thia Jag­ger of HQ Com­mer­cial at a real es­tate con­fer­ence hosted by Queen’s Univer­sity in Van­cou­ver on Tues­day.

Andrew Grant, pres­i­dent of Van­cou­ver-based PCI De­vel­op­ments Cor­po­ra­tion, said larger, mixed-use projects, such as the Marine Gate­way PCI built at the south end of the Cam­bie Street Cor­ri­dor, which in­cludes mar­ket res­i­den­tial tow­ers, re­tail and com­mer­cial space, al­low for some easy in­te­grat­ing of rental build­ings. He also said at its 388 Kaslo project in Hast­ings-Sun­rise, PCI tapped the City of Van­cou­ver’s Rental 100 pro­gram, which gives de­vel­op­ers in­cen­tives — such as waived fees, ad­di­tional den­sity and faster pro­cess­ing — for con­struct­ing rental build­ings in­stead of mar­ket con­dos.

“Those all made it at­trac­tive to do,” said Grant.

De­spite this, he feels, “it would be harder (to choose build­ing rental) today with what’s hap­pened in the condo mar­ket,” which has seen es­ca­lat­ing land prices and a scarcity of pre-sale units.

He added that PCI re­cently dropped a plan to build a rental build­ing with 215 units in down­town Van­cou­ver. “It was (a project) sup­ported by se­nior man­age­ment (at the city), but at the mid-lev­els, there were con­flicts with pol­icy that made it im­pos­si­ble to go ahead.”

Grant de­clined to be more spe­cific about the project, but sug­gested it might be help­ful if the city had a rental hous­ing ad­vo­cate “within the planning depart­ment, span­ning dif­fer­ent de­part­ments to bridge chal­lenges and ex­pe­dite rental hous­ing.”

“In my ex­pe­ri­ence, pol­icy and lower level bu­reau­cracy can some­times trip up plans, and an ad­vo­cate could over­come some of these prob­lems.”

There are other ex­am­ples of de­vel­op­ers with plans to build rental units, but who have stepped away, ac­cord­ing to HQ Com­mer­cial’s Jag­ger.

There should be no com­mu­nity amenity con­tri­bu­tions or CACs charged by the city to de­vel­op­ers for al­low­ing rental build­ings, said David We­sik, ex­ec­u­tive vi­cepres­i­dent at Wes­group Prop­er­ties, which is tar­get­ing an in­crease in rental projects from one to two out of five in the next five years.

The CAC pay­ments are in-kind or in cash and go to­ward the city’s build­ing of com­mu­nity spa­ces such as day­care fa­cil­i­ties and parks.

How­ever, ne­go­ti­a­tions over how much should be paid to the city can be heated when de­vel­op­ers feel they are al­ready putting less in their own pock­ets and tak­ing longer to see a re­turn when they build rental units as com­pared to pre-sale con­dos.

Brian McCauley, pres­i­dent of Con­cert Prop­er­ties, who gave a key­note ad­dress, said with “com­pet­ing city poli­cies on af­ford­able hous­ing, how much to con­trib­ute to nearby tran­sit projects, whether CACs are to be paid, and what trumps what ... we joke that it could take seven or eight years to get shov­els in the ground at Lan­gara Gar­dens,” a prop­erty it co-owns that will see the up­grad­ing of 300plus rental units.

NICK PROCAYLO

Cyn­thia Jag­ger of HQ Com­mer­cial says de­vel­op­ers have stepped away from build­ing rental units.

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