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Real Estate, Opinions & Rants, Business

Development 101: What is purpose-built rental and why is it important?

Real Estate, Opinions & Rants, Business

Development 101: What is purpose-built rental and why is it important?

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Guest Author Aug 23, 2016 9:19 am

Written for Daily Hive by David Sander, a director of Hollyburn Properties


What do condo rentals, laneway homes, basement suites, and purpose-built rental apartments in Vancouver have in common? Their utter scarcity, for one.

A sustainable solution to the current rental housing crisis involves an increase in supply in all of these areas. However, purpose-built rental housing serves our community in a specific way in which the other forms of housing do not. What many people don’t understand, is the difference between a condo development and a purpose-built rental project. As a result, community opposition to development generally, too often stalls or prevents creative rental housing solutions from materializing.

Here are five important facts about purpose-built rental.

Definition

Bridgewater, Hollyburn Properties’ new pet-friendly, purpose-built rental building in North Vancouver

Bridgewater, new pet-friendly, purpose-built rental building in North Vancouver (Hollyburn Properties)

Purpose-built rental is designed and built expressly as long-term rental accommodation. It is different from other types of rentals, such as condominiums, which may be available in the rental pool one year and not the next. Understanding the simple definition and importance of purpose-built rental is key, after all, almost everyone has lived in rental housing at one point in their lives.

Consistency

Purpose-built rental housing, when run by dedicated landlords, also allows for consistency in operations. LandlordBC, the association representing rental housing providers in the province, launched the Certified Rental Building (CRB) Program last year, a voluntary quality assurance program designed to help the public identify responsibly managed rental properties. CRB properties require compliance with 50 stringent standards of practice and are audited by an independent third party, JD Power. Hollyburn Properties and Concert Properties were the first property management companies to adopt the program, which has since grown to nearly 10,000 suites.

Reliability

Residents of Certified Rental Buildings can be sure that thorough screening of all neighbours is conducted, ensuring safety and security at the building, and fostering a sense of community among like-minded residents. Those lucky enough to have live-in building management have dedicated 24-hour service and attention from staff with extensive certification and training – from first aid, health and safety, and customer service to human rights compliance – this brings peace of mind.

Security of tenure

This means that residents need not fear their suite may be taken off the market by a landlord at any given time. For those living in potential redevelopment sites, the City of Vancouver’s comprehensive Tenant Relocation and Protection Policy stipulates, among other things, that the developer will provide up to six months’ financial compensation, a minimum of two months’ notice, assistance in finding three alternative accommodation options at Canadian Mortgage and Housing Corporation’s average rents for the area, as well as moving expenses. In addition, first right of refusal is given for existing residents to move back into the new building at a significant discount from market rates.

Lack of supply and low vacancy rates

The development of rental housing has historically only been feasible for short periods of time. We happen to be in one of those periods, with a low-interest rate environment, sky-high demand, and, in some cases, encouraging government incentives such as the City of Vancouver’s Rental 100 program. These factors combined have incentivized developers to diversify into building purpose-built rental housing in a meaningful way for the first time since the 1970s. So why doesn’t it feel like the market is responding?

Given the incredibly high costs of land and limited supply for redevelopment, competing and more profitable uses – such as condo development – commonly prevail. Furthermore, approval times have never been longer, and NIMBY-ism has never been so fierce. The local, organized opposition to medium and high density residential development is exceedingly active and often self-serving.

Rental vacancies Vancouver

Vancouver is a city with significant housing challenges. Increasing purpose-built rental housing is one of the most important yet underserved long-term solutions. Purpose-built rental contributes to the economic, environmental and social vibrancy of Vancouver by adding to the housing spectrum in a dense and environmentally sustainable way. Advocating for projects you believe in by writing letters to your municipal council and attending the public consultation and civic engagement processes provides a more balanced perspective to your elected officials, and ultimately will help increase the supply of rental housing which this region so urgently needs.

 

David Sander, MSc, is a director of Hollyburn Properties, a privately held real estate company that has owned and operated a national portfolio of multi-family residential rental across four Canadian cities for over 40 years.


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