The city of Vancouver has broken ground on its first rental housing apartment building under a controversial program that gives developers incentives in exchange for building rental market housing.
The privately built development, located at 1142 Granville St. in downtown Vancouver, is part of the city's Short-Term Incentives for Rental program – dubbed STIR.
The program, launched in July 2009 to respond to a shortage of rental apartments, offers developers incentives on their property tax assessments and expedited permit processing. The city also allows the builders to reduce the number of parking spaces at the building, as well as bump up the density.
Mayor Gregor Robertson said between 1,000 and 1,500 new rental units are needed each year to meet the city's demand, but Vancouver only averages 137 a year. He hopes the new building, with 106 market units and street-level retail space, will make up some of the shortfall.
"Getting new rental housing built was something I campaigned on, and it's an important priority for this council," he said. "If we want people to live close to where they work, to give them options on where to live, we need to develop more rental housing."
With a rental vacancy rate in Vancouver of 1.2 per cent, one of the lowest in Canada, Robertson said getting new units up is critical.
"In Vancouver, over 50 per cent of households rent, yet the rental housing stock is aging and in decline," said Robertson.
According to the city, 52 per cent of Vancouver households are renters.
Developer BlueSky Properties estimates each 320 square-foot unit will rent for $950 to $1,000 a month, less than the $1,090 average rent for a downtown apartment.
The city has no rent control over the suites. They will not be subsidized, and increases will be controlled by rules in the Residential Tenancy Act.
In its initial report in May, city council said the smallness of the units, which fall below bylaw requirements which have a minimum floor area of 398 square-feet, would be compensated by the building's close proximity to the downtown core.
"This central city location is considered appropriate for smaller units, as individuals can rely on cultural, recreational, shopping and other amenities in the community to expand their living space," the report said.
The building will only have 18 parking spaces.
The mayor says the contract with the developer ensures the development will remain rental-only for 60 years or the lifespan of the building.
"That's a guarantee the developer makes, it's a covenant on the building, so it will be rental housing."
The mayor said this promise is key to the proposal. He asserts that purpose built rental housing dried up in the 1970s when the federal government pulled away tax incentives, meaning that building rental housing in any Canadian city no longer became attractive to developers. He said Vancouver city officials have lobbied many times to have those incentives brought back, but with no response from the feds.
"We're relying on old stock that is aging and is going to fail us eventually if we don't replace it," he said.
Causing a STIR
The complex is the first to be built under the STIR program, which was intended to add hundreds of units to the sparse rental housing market in Vancouver.
A proposal to build a 22-storey residential tower on a church site at 1401 Comox St. in the city's West End this year was met by severe criticism from area residents.
The group West End Neighbours said the project would be costly to taxpayers and only beneficial to developers. They called on the city to delay the project to allow for more community consultation.
More than 11,000 residents signed a petition against the Comox Street STIR project.
Robertson said despite the fact only one building has actually gone forward since STIR was introduced last year, there are "hundreds" of new units in the pipeline and he isn't discouraged by any slowdowns.
"We want to be sure the community gets their voice in," he said.
Have your say: Will STIR buildings help or hurt Vancouver's rental housing situation?
