A new report on Vancouver’s rental housing market warns of a falling trajectory in supply, due to new interventionist policies by both the provincial and municipal governments.
NAI Commercial’s year-end report went as far as stating “the elephant in the room is the current [provincial] government” with its “meddling” in rent controls — one of the recommendations of the government’s task force on rental housing.
And earlier this week, the City of Vancouver passed a motion to create new policies that will protect renters in Vancouver from “renovictions” and “aggressive buyouts”
“These items are vacancy controls, longer terms for evictions, removal of the direct request application for non-payment of rent and longer terms for notice to respond,” reads the report.
“Vacancy remains at all-time lows and the government should be stimulating housing supply. Most of their policies are having the opposite effect. Real estate experts, investors, entrepreneurs, activists etc. keep reiterating an obvious supply problem which policy makers continue to ignore. The policy of tighter rent controls, lower densities and massive red tape to get any project approved, not to mention the high government taxes to do any project will not stimulate rental development. ”
The report asserts that the provincial government needs to recognize these issues and refrain from using housing as a new tax revenue opportunity.
“Governments continue to deny supply of rental units as a major factor in the affordability crisis and instead focus on taxes,” the report continues.
Other policy changes are also expected to inhibit the renewal of aging rental housing buildings and result in a decline in both quality and supply of rental housing.
“We are seeing the government and tenant advocacy groups voicing concern over the displacement of tenants and beginning to implement stricter guidelines. Buildings that are already repositioned will carry an added premium in value in the future,” states the report.
“It is very likely that going into next year we will see a dramatic decline of retrofitted apartments as we anticipate that the government will refuse to allow a landlord to raise the rent to market after they have done the work, but expect them to bring the tenant back into the suite at the same rent.”