City officials, developers discuss affordability issue

Vancouver’s lack of affordable housing is critical and will get worse without “transformational” changes — including more privatesector rental stock — the city’s top housing official told B.C.’s building industry on Tuesday.

The lack of affordability for working families has grown worse over the past decade and the challenges “are not going to let up anytime soon,” Gil Kelley, Vancouver’s general manager of planning, urban design and sustainability, told 1,000 of the building industry’s movers and shakers at an Urban Development Institute luncheon.

In a wide-ranging overview of the city’s housing challenges, Kelley itemized reasons for the affordable housing shortage, including global pressures on booming gateway cities like Vancouver.

Kelley said some homeowners are asking whether their kids will be able to stay in Vancouver and companies ask whether housing costs will impede recruitment.

Vancouver grew its housing stock last year by 10,000 units, which Kelley said outstripped population growth, but “it’s a lack of what we call the right supply.” He said a shortage of affordable housing will likely grow if Vancouver, as expected, gets a larger slice of the $19-trillion tech industry because the city is “ripe for becoming a member of that club.”

Wealthy tech workers will likely further drive up housing prices, and changes have to be implemented now, said Kelley, who was hired in August 2016 from San Francisco, a city he said is facing the same lack of housing for residents not working for high wages.

“Incremental change is not enough,” he said. “It will need to be transformational change.”

He said more rental stock has to be built for “local families,” as rental units that are being built now tend to be high-rent and unaffordable to as much of the half of Vancouver’s population that rents.

He said in particular there are 90,000 older rental units along and near the Broadway corridor south to 16th Avenue that need to be maintained or rehabilitated as affordable units, rather than replaced.

Moderator Brian McCauley, president of Concert Properties, said developers aren’t eager to build what Kelley acknowledged was lower-margin rental stock when they’re expected to also pay community amenity contributions (CACs), or cash payments developers regularly pay to sweeten rezoning deals (and are used to build parks and daycares and the like), on rentals.

“There’s a real disconnect about the continued desire for the city to raise more capitalization through developers,” said McCauley. “How does it make sense to charge a CAC on rental housing?”

Kelley said “financing growth is necessary” and that CACs are one of the “key debates” and “the kind of questions we want to get into.”

Strategy details will be released in the city’s updated 10-year housing plan, expected this fall.

The city plans to add 12,000 rental units over the next 10 years, Kelley said.