Planners try to correct housing balance
Proposed city bylaw would use density incentives to encourage the building of new rental units
Vancouver is considering its first use of new rental zoning powers, proposing changes to make it easier for developers to build taller in many commercial districts if they opt for rental apartments over condos.
The proposed bylaw changes before council this week are part of the city’s efforts in “trying to shift to what we call the right supply,” said Edna Cho, a senior housing planner with the city.
With home ownership out of reach for a growing segment of Vancouverites, that “right supply” includes more purpose-built rental apartments — especially those suitable for families — instead of high-end condos and detached houses too expensive for many locals.
In the areas the planning department calls “C-2 zones” — blocks along arterial streets zoned for four-storey, mixed commercial and residential developments — developers have long favoured more lucrative condo projects over rentals.
In a typical year, if the city received about nine applications for mixed-use developments, perhaps seven were for strata units and two were for rental units, Cho said.
The proposal before council this week attempts to shift that balance the other way by allowing developers to build two extra floors, on top of the four already allowed in those zones, if they build rental instead of strata.
The proposed bylaws rely on the NDP’s 2018 decision to allow cities to limit housing tenure to rental. This tool is often referred to as “rental-only zoning,” but in this case, it’s not exactly rental-only, because four-storey strata would still be allowed in these C-2 zones. But the new rental zoning tool also empowers the city to provide extra height and density allowances, specifically for rental housing development.
“We’re trying to level that playing field,” Cho said. “We’re putting strata and rental on the same footing, because you need a little bit more density to make a rental project happen.”
These changes would affect many of the city’s main drags: think Kingsway, West 4th Avenue, South Fraser, parts of Dunbar Street, and Arbutus Village.
Currently a developer seeking extra density needs a rezoning from council, which adds significant time, money and uncertainty to the process. The proposed changes would allow developers to skip rezoning and jump straight to a development permit application for up to six storeys for projects meeting certain criteria.
The rough template looks like this: The ground floor would be commercial/retail space. The second floor would be either commercial, such as offices, or residential. The rest of the floors would all be rental apartments, 35 per cent of which must be suitable for families, with two or more bedrooms. The projects would also need to meet green building standards.
If council this week refers the change to a public hearing later this summer, the amended bylaws could be in effect this fall.
Cho doesn’t expect the changes will lead to a rush of development in C-2 areas — instead, the amount of development might stay roughly the same as past years, but shifting from condo to rentals.
These would be market rental homes, so they wouldn’t be affordable for everyone. But the goal is to help the city get closer to its targets for rental housing construction, which has lagged far behind in recent years. Last year’s annual report on the progress, or lack thereof, towards Vancouver’s housing production targets shows the city approved only 1,031 purpose-built rental homes, 52 per cent of its annual target. But for condos, the city approved 4,511 units — 150 per cent of the annual target.
This policy direction, Cho said, “reflects the new reality of Vancouver today.”
“We know more than 50 per cent of our households are renters, and we know this trend is going to continue — new household formations, more of them are going to become renters in the future. So we need to modernize our zoning tools to reflect that.”
In the two years since the province allowed rental-only zoning, very few local governments opted to use it.
In January 2019, New Westminster stuck its neck out as B.C.’s first municipality to enact a rental-only zoning bylaw, and they were met with a lawsuit, when a group of affected landlords took the city to court the following month. The matter is still before the courts.
While Vancouver is using powers under the rental-only zoning changes, it differs from New West in not directly zoning an area for rental-only. When New West slapped rental-only on some existing properties, affected owners complain ed about “downzoning,” or making their land less valuable.
Anne McMullin, president of the Urban Development Institute, said the local development industry generally supports Vancouver’s proposed approach, because it provides “incentives instead of being punitive.”
There could be more to come: This week’s report to council notes the possibility of expanding rental-only zoning features in the future to other areas beyond C-2 districts. Considering that this mayor and much of council campaigned on shifting the market away from condos and houses towards more rentals, there might be an appetite at city hall for more of this direction. But, of course, that won’t happen without resistance.