Should Vancouver Encourage Rent-Only Neighbourhoods?

Despite record construction across Vancouver over the past couple of years, the Metro area’s apartment rental vacancy rate remains below 1%, according to a recent Canada Mortgage and Housing report. On top of that, the average one-bedroom suite has climbed to more than $2,000 a month, forcing renters to spend more than the recommended 30 percent of their income on housing.

In this type of atmosphere, it is really easy for landowners to take advantage of renters who don’t have any other options other than to suck it up. In addition, businesses are having a hard time trying to find workers because many are being priced out of the region.

With the difficulty in finding a place to live, there have been many creative alternatives put forth by politicians who are trying to solve the problem. As part of the new Housing Vancouver Strategy, the city wants to add 72,000 housing units, including 20,000 purpose-built rentals. Nearly half the units will be geared to households with less than $80,000 in annual income to alleviate rental problems.

The city has done what it can to incentivize rental development, but it wants greater authority over zoning in hopes of providing more affordable housing. One of the solutions is a rental-only zone which would hopefully bring some housing costs down.

Although a dedicated rental zone is a way to reduce housing prices, there are many implications the city hasn’t considered. The city politicians have to be really careful about dividing people into owners and renters. It can cause a cultural rift in a city, creating almost second-class citizens. It would be the equivalent of having a two-tier healthcare system where parts of the city get better policing, access to hospitals, schools, and daycare.

Any blanket rezoning creates a political nightmare and will upset developers who will have little incentive to create quality, stylish residents. Selling new Condos to owners are a major money-maker for the developers, and therefore they aren’t as likely to consider the liveability of a home in a rent-only zone.

Ultimately what will happen is the city will create ghetto-like neighbourhoods which will only be a disservice to Vancouver and its citizens, despite the good intentions.

Where the city is planning on these rent-only regions is unclear, but it would make sense to have them around Brentwood Mall, Metrotown, and Lougheed Mall where there are already a number of for-rent condos. What would happen to homeowners in the vicinity is also unclear. The city couldn’t kick the owners out of their homes.

These innovative solutions, unfortunately, don’t solve the root of the problem – not enough supply and too much demand. These political solutions will more likely cause more harm than real good.