Metro Vancouver's severe shortage of strata property managers could add to housing costs

Mar 24 2023, 4:08 pm

There is yet another issue that could add to housing costs in Metro Vancouver, and hinder the operations of residential buildings.

The real estate industry is warning that the worsening shortage of strata property managers will have a ripple effect on the local housing market.

According to the provincial government, an estimated 1.5 million people in BC live in strata housing. Such types of ownership housing are typically associated with condominiums, but strata housing can also include townhouses, duplexes, and even a cluster of single-family homes in bare-land strata corporations.

Chris Churchill, the president of FirstService Residential, told Daily Hive Urbanized the shortage of such licensed professionals is due to a combination of a boom in new strata housing buildings and the retirement and attrition of such individuals from the field.

About 2,000 new complexes with a strata housing designation have been constructed since 2018, and they each require a professional to manage and assist the strata council’s operations. The shortage is expected to worsen from the forthcoming completion of new additional strata buildings, driven by the urge to build more supply to help address housing affordability.

Churchill says the shortage of strata managers will result in smaller stratas being unable to hire a manager, while larger more complex towers will have a lack of experienced managers to oversee the property. He expects properties with fewer than 80 units will have to be self-managed in the next two to three years.

“The outcome is dangerous,” said Churchill. “Deferred or improper maintenance of properties means increased insurance rates, more special assessments, safety concerns, lack of disaster response plans, increased legal fees due to liability issues, and overall poorly managed operating budgets.”

A large tower, he says, can have an operating budget of over $2 million, which requires data and analytics to budget, plan, and forecast accurately.

Churchill notes most brokerages give managers a portfolio of between 15 and 20 buildings to oversee, and this is partially due to staffing shortages in BC. However, he says his firm has some of the smallest portfolios in the industry, with each manager holding an average of seven buildings.

Moreover, BC is one of the only jurisdictions in the country where each manager can oversee multiple buildings or a portfolio. In other markets, there is typically one manager per tower, and they are on site every day.

“The portfolio approach keeps fees low, and strata fees in BC are the lowest in any major market in North America,” he said.

Churchill also warns that the provincial government’s recent decision to ban strata councils from restricting rentals has had some unintended effects, as investors are less likely to be proactive in maintaining properties, which will lead to an increase in insurance rates and strata fees.

To turn the shortage situation around, he says the provincial government and the industry need to work together to increase awareness of strata management as a career, and change the curriculum of the licensing program to ensure new managers are graduating with the necessary skills, knowledge, and tools.

Other measures could include training grants for hiring new managers with no experience, and the creation of an apprentice-like program.

The University of British Columbia’s (UBC) online strata management licensing course currently costs just over $1,000, and many brokerages will reimburse the cost of the education after the successful completion of the program. It can take up to one year to complete the curriculum, with most participants taking about four to six months, and the program provides flexibility to start the course at any time. There are no formal educational prerequisites to take UBC’s course.

After they have successfully completed the course, managers require at least six months of training and mentoring before they can receive their first portfolio of buildings.

Fundamentally, Churchill adds that there needs to be increased awareness of strata management as a career.

Managers can expect to earn between $55,000 and over $100,000 annually, with the wide range in compensation based on experience and the type of properties they are managing. Large and complex buildings offer more compensation than smaller buildings.

Kenneth ChanKenneth Chan

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