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Vancouver’s rental incentive programs under the microscope

City seeking feedback about how to improve programs until Monday September 30
The City of Vancouver is hosting two open houses on proposed changes to its rental incentive programs, Sept. 25 and 26. Photo Dan Toulgoet

A look into how the City of Vancouver’s existing rental incentive programs can be improved, streamlined, produce more supply and create increased affordability has reached the public feedback stage.

Two community open houses about city staff proposals took place September 25 and 26. Interest in the issue is significant — so far more than 2,400 people have responded to an online survey about the subject. The survey, posted on September 16, asks questions such as whether respondents support the idea of incentives to developers to encourage construction of purpose-built rental housing and whether larger and taller buildings are acceptable if they produce more rental buildings with units that are affordable for moderate income households.

The city has been studying the issue for months. In late July, staff released findings from two consultants about the city’s rental programs, which determined that over the past decade about 3,700 rental units have been built, and another 5,000 have been approved or are under construction, due to existing rental incentive programs. The reports concluded that such programs are “absolutely necessary” to create new rental housing; that rental buildings were producing an over-supply of parking, which increases construction costs by 10 to 20 per cent; that rezoning applications were taking a long time to process, which also increases costs; and that 90 per cent of new purpose-built rental buildings have been constructed along arterials.

Complex problem

Debate around rental programs, which include Rental 100, the Affordable Housing Choices Interim Rezoning Policy and STIR (short-term incentives for rental), has been fraught and finding consensus on how to improve the situation for renters isn’t simple.

In recent years, some critics have questioned why developers get incentives such as development cost levy (DCL) waivers when new rental buildings aren’t producing units affordable to most Vancouver residents. Others insist the focus needs to be on providing housing for low-income residents, while still others have complained about the city allowing what they consider excessive height and density in projects in return for some affordable units.

Rental incentive program supporters, meanwhile, see them as a way to ensure rental buildings are constructed in a city with a low vacancy rate and where few purpose-built rental buildings were constructed between 1980 and 2009. Even in recent years, the city hasn’t been meeting its own rental targets. This comes at a time when the majority of Vancouverites are renters.

Seeking solutions

Dan Garrison, the city’s assistant director of housing policy and regulation, told the Vancouver Courier that staff proposals to improve programs include adjustments to the Rental 100 program, while consideration is also being given to how to provide opportunities for rental housing in low-density neighbourhoods rather than just along arterials.

Garrison acknowledges the issues are challenging.

“I don't think that anyone would argue that the housing file is one of the tougher issues that the city's facing,” he said.

“It is tough to balance all of the concerns but when you take it apart and do what we've done, which is take a systematic approach to analyzing the programs — figuring out what works and what doesn't, figuring out what's possible financially, figuring out what's possible architecturally — it kind of points you to a few directions that are actually within the possible. Some of the pieces around achieving some of the objectives, like more affordability — what's inherent in the question is there are trade-offs.”

Trade-offs, he said, are apparent in the city’s Moderate Income Rental Housing Pilot Program (MIRHPP), which is underway. No applications have reached public hearing yet, but the program requires 20 per cent of residential floor space be set aside for households earning between $30,000 and $80,000. The result is taller buildings and the scale of some of those proposed has become a source of criticism.

“In some cases, that’s what’s required to achieve that level of affordability. That’s why we’re going to talk to the public because there’s a trade-off, or a discussion there about impacts, that has to be had and we're going to have that discussion,” Garrison said.

Figuring out how to streamline the development process for rental buildings, and providing more clarity to developers and the community about what they can expect, is also among goals of the review.

With respect to the Rental 100 policy, Garrison said applicants go through a “relatively complex” rezoning process to get approved but in several zoning districts where the policy applies, a developer could opt to go through a development permit process to build a condo project instead.

“We're looking at the potential to change that zoning to use the rental zoning tools that the province has recently given us to allow rental developers to build a six-storey rental building in that zone through the same process that a condo developer could build a four-storey condo building… we don't think [it] is going to greatly increase the number of projects that are being developed in those areas, but we do think it's going to make it possible for more developers to choose rental instead of strata,” he said.

The city is also looking at how to increase the diversity of rental housing that’s being built in terms of the buildings and locations.

Garrison said that means looking at opportunities to build rental housing in low-density neighbourhoods that are, generally speaking, either adjacent to commercial areas or arterial streets.

These types of projects are currently allowed to be considered under the Affordable Housing Choices Interim Rezoning Policy.

“It’s an interim policy. It's not really clear enough, I think, from anyone's perspective. What we're looking at doing is taking that policy and trying to make it more clear so that we can see more rental housing options being built in areas where currently it's primarily single-family houses, but where they're close to either commercial or transit options,” Garrison said, adding that lower-density areas can offer “a good opportunity” to build rental housing because you’re not competing with developers’ ability to build condos, and it also has the potential to lead to more affordable units.

“In the future, the big questions around what we do in terms of any change that might be considered in low-density neighborhoods will still be made through large planning processes, particularly the city-wide plan that's coming up,” he said. “What we're looking at right now is what can we do to take the things that have worked in our interim policies and enshrine them in standardized policy. We'll leave the bigger questions of the future of neighborhoods to the bigger planning processes."

Garrison added that the city is not just focusing on rental supply programs. It also has a target to produce 12,000 units of social and supportive housing over the next decade, while the Vancouver Affordable Housing Agency is developing non-market housing on city-owned land.

“If you look at a rental supply program, that's really around incentivizing the private sector to build more rental housing instead of condos. It is going to be very challenging to make that program meet the needs of very low income households but that's why we have other programs that are targeted to do that,” he said.

Meanwhile, for the city's review of rental incentive programs, Garrison said staff have been consulting with interest groups such as the Urban Development Institute, the Non-profit Housing Association and LandlordBC, but they also want feedback from the public about what ideas should be considered.

“While we're putting out some options, we're also looking to continue learning about other options that we maybe haven't thought of yet,” he said.

More information about the review and the survey, which is online until Monday September 30, can be found here.