Opinion: Preserve Vancouver’s old rentals, but understand both sides of housing market

Opinion: We must preserve Metro Vancouver’s old rentals, and understand both sides of the dire housing market

Artistic rendering of the Georgian Towers redevelopment at 1450 West Georgia Street in downtown Vancouver, in relation to existing and other future towers in the area. (Yamamoto Architecture/Wesgroup Properties)

Written for Daily Hive Urbanized by Beau Jarvis, the President of Wesgroup Properties.

We are facing serious challenges in the Lower Mainland’s rental market. There are not enough rental homes and many of the buildings are so old that they are barely standing.

Most of BC’s rental stock ranges from between fifty and seventy years old as rental homes essentially stopped being built in the 1980s. Between the 1950s and the 1980s, the federal government provided tax credits to builders, helping the viability of new rental construction. When this stopped, so did much of the development of new rental homes. Developers began focussing on building condos, which were less risky and more profitable. Now, much of our province’s rental stock is coming to the end of its useful life.

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Some have a poor opinion of developers and landlords and although there are unethical groups in every sector, the fact is that a majority of developers and building operators are fair and ethical companies who are passionate about rental housing.

I want to reinvest in our older rental stock, making it sustainable, while helping buildings to last longer as healthy homes for tenants. To accomplish this, we need to advance fair policy around older housing; however, we are facing serious obstacles.

Developers and building owners are facing unprecedented and ongoing cost increases in almost all areas. While examining operating costs for older rental buildings in our portfolio over the past two years, we see common examples such as insurance increases of over 100%, water and sewage cost increases of 85%, and property taxes increasing from between 10% and 70%. Allowable rent increases during this same period were 0% and 1.5% respectively. One thing is consistent in business; operating expenses significantly exceeding overall revenue does not work. This is not a sustainable business model, whether you make shoes, cars, or build homes.

Because buildings are becoming so old, there are also increasing expenditures such as roof, boiler, and heating system replacements. With all of this, I have yet to see any meaningful and balanced policy or bylaw implemented by any level of government that incentivizes or supports a landlord reinvesting in older buildings.

I recognize that tenants are also facing serious challenges as we recover from the pandemic. Some have had to change careers completely, grocery and gas prices have risen and with the lack of rental housing, costs are high and the ability to find a decent home is extremely difficult.

Landlords also suffered the effects of the pandemic for a substantial period of time with no allowable rent increases, as mandated by the government, while costs remained unchecked. Ironically, one of the most significant cost increases has been property taxes.

We need a balanced approach that considers both the needs of the landlord and tenant. We must work together as soon as possible. It’s vital that we stop creating policy in silos that is reactionary in nature. If BC building owners are trying to preserve and maintain older, more affordable housing, we must stop creating a policy environment that is almost impossible to operate within. We need the support and ongoing involvement of government to keep older rental supply safe and standing strong.

We must bring everyone together to educate each other on our needs and challenges. The government must also advance policy specifically focusing on our province’s aging rental stock, and supporting the private rental sector in offering a sustainable model for reinvestment.

I propose a working group made up of tenants, tenant advocacy groups, landlords, building advocacy groups, politicians, policymakers, and residents of all ages and backgrounds. Let’s connect at various times, both in person and on digital platforms, to ensure that a more diverse group can participate. There should be a series of teaching and learning opportunities, where all perspectives are shared.

We must work to create robust and fair policy for both tenants and landlords. Remember that both parties have a symbiotic relationship; one cannot exist without the other. Canada is heavily reliant on the private sector to deliver housing. Even if we wanted to change this, it would take decades and unfathomable amounts of public funding to do so. I propose working together to create a sustainable operating environment for everyone.

I am passionate about finding a common ground and understanding what everyone is going through vs. a one-sided approach where we hear very little about the realities of what the industry is facing and how passionate most of us are about fair, transparent, and productive dialogue.

Almost all agree that we need more rental homes but in the meantime, it is vital that we invest in the large number of older homes that make up the majority of our market, while respecting the needs of the tenant and realities of the landlord.

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