Vancouver to consider defining affordable rental housing as $1,250 per month

Feb 22 2019, 11:59 pm

The monthly rate that is deemed the top end of what can still be considered ‘affordable housing’ is up for review.

Vancouver city council is scheduled to consider a motion this coming Tuesday – first proposed by Green Party city councillor Adriane Carr earlier this month – to take another look at the City of Vancouver’s definition of affordable rental housing.

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According to the motion, the standard definition of affordable rental housing used by Canada Mortgage and Housing Corporation (CMHC) and BC Housing is a rate that is no more than 30% of the household’s gross income.

This would equate to $1,250 per month or less, at most, given that 50% of Vancouver renter households earn less than $50,000 per year. Furthermore, city data indicates 12% of renter households earn less than $15,000 per year, 18% earn between $15,000 and $30,000 per year, and 20% earn between $30,000 and $50,000 per year.

To date, the new City Council has been generally critical of the Rental 100 Secured Market Rental Housing Policy, which provides developers with a number of incentives to construct purpose-built rental housing. This includes a waiver of the development cost levy (DCL), parking requirement reductions, allowance for smaller unit sizes to 320 sq. ft., additional density beyond what is permitted under existing zoning, and expedited processing for projects requiring a rezoning.

Since Rental 100 was implemented in 2012, over 1,800 secured market rental housing units have been approved. The intent of this rental housing catalyst policy was to create affordability through increasing supply, thereby providing residents with more options to choose from, which would effectively lower the pressure on the demand and cost of lower-cost rental units.

For example, a flood in new rental housing supply in Seattle in recent years led to a high vacancy rate and a fall in rental prices.

Under Rental 100, DCLs are waived if proposed rents are at or below rents specified in the city’s Rental Incentive Guidelines (RIG), which range from $1,496 per month for a studio to $3,365 for a three-bedroom unit in the Eastside area and $1,646 for a studio to $3,702 for a three-bedroom unit on the Westside. The lowest of these rents would require a household income of $59,840 to be deemed affordable.

In January, city council approved two secured market rental housing projects in the Hastings-Sunrise neighbourhood with 79 rental homes combined. The proposed starting rents aligned with the lower end of the RIG.

Next week in the same meeting, rezoning applications under Rental 100 in Kitsilano with 32 units and on Commercial Drive with 38 units are scheduled to deliberated.

“The lack of rental housing available at rents affordable for low to average income earners in Vancouver is a primary cause of Vancouver’s housing affordability and homelessness crisis,” reads the motion.

“Vancouver has been primarily incentivizing and subsidizing rental housing only affordable for households at higher incomes.”

If the motion is approved, city staff would review all existing housing programs to “identify ways to meet Vancouver residents’ needs for affordable housing at rates in line with CMHC and BC Housing definitions of housing affordability.”

An upcoming review of rental incentive programs, including Rental 100, would lead to the development of a new incentive program for “Community-based Housing” and a new governance model and implementation strategy for the Vancouver Affordable Housing Endowment Fund.

While reforms could make rental housing more affordable to lower-income residents, there are concerns in the real estate industry that the higher costs associated with building rental housing could deter private developers away from building more rental housing, effectively reducing the volume of new supply. Instead, developers could pursue the usual more advantageous avenue of building market ownership units.

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