Thousands of homes could be released into Metro Vancouver's costly rental market
If you’ve lived in Metro Vancouver for any length of time, the topic of housing affordability has likely come up at the dinner table. With the average price of a Vancouver home pegged at more than $1 million, it’s fairly obvious why this issue has captured our attention.
This week, Vancouver City Hall released yet another report on how to increase housing affordability in one of the most expensive places to live on Earth. While the task force should be commended for its efforts, I note the report had one glaring omission.
It failed to address B.C.’s Strata Property Act and how it manages to discourage affordable rental units from entering the market.
Section 141 of the act allows a strata council to limit how many rentals are permitted in a condo complex. In other words, if you are a condo owner and want to place it on the rental market, you may not be able to legally do so.
In fact, even if up to 25% of the condo owners in your strata want to rent their units, the legislation enables the other 75% of owners to impose an outright ban.
One of the consequences of this legislation is a number of older condo buildings forbid rentals. Many real estate listings even proudly boast “no rentals” as prominently as they do new granite countertops.
In 2010, the province amended the act slightly to ensure prospective purchasers would be protected from rental-averse strata councils.
Developers are now allowed to register with Victoria when they are selling new units that permit rentals. Once this is done, future strata councils cannot override it. Hence, many of the newer buildings that authorize rental suites will have to continue doing so for years to come.
One way to solve our affordability problem might be to modernize the act to ensure it requires a minimum 10% of units in any strata complex can be placed into the rental market. Of course, the legislation would only apply if an individual owner actually decides they want to put their place up for rent.
Strata councils would still be able to ensure 90% of the condo units are owner-occupied.
It’s clear from the city’s report that a lot of work needs to be done to help make Vancouver more affordable. Let’s hope the task force will be open to exploring this during the forthcoming consultation period.
Vancouver's own study proves available rental housing sits empty
The City of Vancouver released a report back in 2009 which had some great analysis on how the Strata Property Act was impacting affordability and access to rental units. Here are a few excerpts to put this whole debate in context:
- The impact of the prevailing rental restrictions on the potential of the condominium rental market to be rented has been significant.
- Between 9% and 15% of the apartment condominium stock cannot be rented, representing 6,000 to 10,000 units. Of the remaining stock that allows rentals, more than half of the units had partial restrictions in place. On average, these buildings allowed 15% to 17% of their units to be rented, based on the review of strata bylaws and survey of strata councils.
- None of the strata buildings had bylaws that permitted more than 50% of their units to be rented. By extrapolation, we roughly estimate that an additional 20,000 to 25,000 units have been excluded from the rental markett as a result of partial rental restrictions.
- In all three data sets, the smaller buildings were found to be more likely to have a restrictive bylaw in place, while the larger buildings were less likely to limit rentals. The pattern of rental restrictions also showed that as buildings get older, there is an increased likelihood of rental restrictions. According to the review of strata bylaws, restrictions were typically introduced nine years after the registration of the strata corporation. In the survey of CHOA members, the strata corporations adopted their rental restriction bylaws on average after 14 years of occupancy.
- Generally, Downtown and the West End were found to have the least restrictions of all sub-areas in the city.
- Since the 1980s, in parallel to the decline of purpose-built rental housing starts, privately owned strata condominiums have played an increasingly important role in the city of Vancouver’s rental housing market.
- In 2009, there were approximately 23,000 units that were investor-owned in Vancouver or 35% of the city’s apartment condominium stock. More than half of the investor-owned units were located Downtown (53%). Fairview/Kitsilano, and the West End areas housed another 31% of investor units.
- Canada Mortgage and Housing Corporation’s rental market survey provides estimates of the percentage of condominium rentals in Vancouver. According to the Fall 2008 survey, approximately 17,000 units, or 27% of Vancouver’s apartment condominium stock, were rented.
– post by Daniel