In an effort to increase the supply of affordable housing, the City of Vancouver (CoV) approved the Affordable Housing Choices Interim Rezoning Policy to allow for consideration of rezoning proposals evaluated on the following criteria: Affordability, Location, and Form of Development. These changes are intended to be an interim measure to better meet the new Housing Vancouver targets for purpose-built rental housing—20,000 units within 10 years (2018-2027). For a full list of rezoning applications that are approved, in review, and in public consultation, you can visit the CoV Shape Your City website.
According to the Interim Rezoning Policy, projects must demonstrate an enhanced level of affordability beyond that provided through the delivery of a generally more affordable housing type alone. Applicants are expected to demonstrate their ability to maximize the level of affordability in the project. Projects that would be considered must meet one of the following affordability criteria:
- where 100% of the residential floor space is rental housing;
- where units are sold for at least 20% below market value and include a secure mechanism for maintaining that level of affordability over time (e.g. resale covenant, 2nd mortgage, etc.);
- innovative housing models and forms of tenure such as co-housing, when they can demonstrate enhanced affordability as determined by the City;
- where a Community Land Trust model is employed to secure increasing affordability over time.
Sites that would be considered under this policy are:
- Sites fronting an arterial street that is on Translink’s Frequent Transit Network and within close proximity (i.e. a 5-minute walk or 500 metres) of a local shopping area. Mid-rise forms up to a maximum of 6 storeys.
- Sites within approximately 100 metres (i.e. 1 1⁄2 blocks) of an arterial street. Ground-oriented forms up to 3 1⁄2 storeys (which is generally sufficient height to include small house/duplexes, traditional row houses, stacked townhouses and courtyard row houses) or four-storey apartments.
One application approved by Council under the Affordable Housing Choices Interim Rezoning Policy is for a new development at 7280 Fraser Street, from Spire Development and Cornerstone Architecture. Located in the Sunset neighbourhood of Vancouver—predominantely a single-family residential community. The project is a 6-storey mixed-use building including 95 secured market rental units and commercial use at grade.
Their application was received in December 2019, and approved in December 2020. Now in 2022, nearly 3 years later, the shovels have yet to break ground and the existing commercial building is yet to be demolished. Zoning is to be changed from C-1 (Commercial) to CD-1 (Comprehensive Development), which can add an additional 10 months to the permit process. The Building Permit Process in Vancouver is notoriously more complex than other cities. According to CBC, building firms say permit backlogs have created logistical difficulties on top of rising construction costs. An Altus report stated developers that launched projects in 2019 and have not yet broken ground are facing a 30% jump in construction costs.
In a housing bear market with interest rates and rents increasing, it’s a good time to be holding cash flow rental properties to pass on the costs. Hard assets historically perform well during inflationary periods. Based on Zumper’s Canadian Rent Report, the top 5 most expensive markets based on year over year growth are:
- Vancouver, BC one-bedroom rent up 14.9% to $2,240, two-bedrooms up 20.9% to $3,300.
- Toronto, ON one-bedroom rent up 11.1% to $2,000, two-bedrooms up 13.4% to $2,630.
- Burnaby, BC one-bedroom rent up 15.3% to $1,960, two-bedrooms up 15% to $2,610.
- Victoria, BC one-bedroom rent up 15% to $1,840, two-bedrooms up 20.8% to $2,500.
- Barrie, ON one-bedroom rent up 6.7% to$1,760, two-bedrooms up 6% to $1,940.