$208 million in federal financing for 422 new rental homes in Vancouver

Revised artistic rendering of 3572 Glen Drive, Vancouver. (Musson Cattell Mackey Partnership/Peterson Group)

Three secured purpose-built rental housing projects in Vancouver will be realized with the financial help of the federal government.

Canada Mortgage and Housing Corporation (CMHC) announced Thursday it will provide three privately-built rental housing projects with a combined total of over $208 million in low-cost construction financing.

This support from the Rental Housing Financing Initiative will maintain the viability of building a total of 422 new rental homes for middle-income households.

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“As Vancouver’s population continues to grow, the need for housing becomes increasingly crucial,” said Harjit Sajjan, the MP for Vancouver South, in a statement.

“When it is complete, these three projects will offer much-needed housing for families and individuals to grow and flourish in these beautiful neighbourhoods of ours.”

This includes $79.4 million for Wesgroup Properties’ project with 178 rental homes at 3435 West Sawmill Crescent (previously addressed as 3350 Marine Way) in the River District in Vancouver’s East Fraserlands, with the developer contributing $15.4 million and the municipal government providing $3.6 million.

Another $65.7 million will go to 139 rental homes at 3572 Glen Drive (previously addressed as 1111-1123 Kingsway) by Peterson Group, which is contributing $17.3 million.

As well, $63.5 million will go to Stonemark Investments and Rize Alliance’s Comma Properties’ project of 104 rental homes at 695 East 19th Avenue (previously addressed as 3429 Fraser Street), which will feature a unique co-living concept. The developers are providing $9.7 million.

3350 Marine Way Vancouver River District

Artistic rendering of 3435 West Sawmil Crescent at River District in Vancouver. (Yamamoto Architecture/Wesgroup Properties)

Revised artistic rendering of 3572 Glen Drive, Vancouver. (Musson Cattell Mackey Partnership/Peterson Group)

3429 Fraser Street Vancouver February 2020

February 2020 artistic rendering of 3429 Fraser Street, Vancouver. (Yamamoto Architecture/Rize Alliance)

The funding from CMHC is fully payable but at a lower interest than what would otherwise be offered by the market, especially after the Bank of Canada’s consecutive policy interest rate hikes.

With higher borrowing costs and escalating construction costs for building materials and labour, projects are increasingly at risk of becoming financially unviable, with rental housing being particularly vulnerable.

Secured rental housing vacancies in Metro Vancouver are now hovering at or below 1%, with low new supply, high immigration volumes, a growing number of international students, and poor attainable homeownership opportunities keeping vacancies extremely low and propelling rents.

“Wesgroup is proud to work with the federal government and CMHC to create much-needed rental housing for middle-income Canadians in Vancouver and realize our mission of building complete, vibrant communities,” said Beau Jarvis, the president of Wesgroup Properties.

“In an environment with rising interest rates and construction costs, the secure, reliable financing provided by CMHC’s Rental Construction Financing Initiative is crucial to making the construction of rental housing viable for developers.”

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