Sunday, February 6, 2011

The state of rental housing and homelessness in Vancouver

Yesterday I received a copy of a powerpoint prepared by the City reviewing the state of Vancouver's rental housing and its success addressing homelessness, Here is the link to the Strategy PowerPoint: along with a very comprehensive report on rental housing in Vancouver. It can be found here:

Data from the rental report was set out in the powerpoint presentation.

It takes at least two hours to go through the report, but since it is raining today, I highly recommend it. In fact, even if it stops raining, (and I hope it does since I’m playing in a SuperBowl golf tournament), it is worth reading.

The report was prepared by a consulting firm headed by Dale McClanaghan, (yes a former president of the NPA) with input from Coriolis, another planning and real estate consulting firm and Altus Group, which includes cost consultants, appraisers and the like. All are respected firms in the planning and economic consulting field.

It provides a very comprehensive overview of Vancouver’s rental housing stock…where it is, when it was built, its condition, the required cost of renovations and repair, replacement costs, along with policy options and much more.

While I have some concerns with some of what is in the document, and with some of what is not in the document, overall I think it is a very good piece of work.

I was surprised that Vision would hire a former NPA president to undertake a comprehensive housing strategy but gave them full marks for doing so…(Although I would note Dale was also once head of Vancity Enterprises and has been in the housing consulting and development business for a while).

However, when I went on-line to check some facts for this posting, I discovered that he wasn’t hired by Vision. No, he was hired by the NPA in 2008.

However, trying to put politics aside for a moment, the report includes some fascinating information that should interest anyone who wonders why STIR was introduced; why rental housing seems so expensive; why there are so many older rental buildings around the city and so few newer ones; etc.

One of the tables on page 16 sets out the rents for different types of rental housing from SRO’s to Single Family Rental houses. (It includes secondary suites, rented condos and single family houses). I was surprised by the high number of houses being rented out until I realized that the report uses Census Data. I suspect the single family catagory includes all those houses that have been illegally divided up into suites…(no doubt some of you live in these suites but never thought about the fact they are illegal.)

While I still need to spend more time going through the report , there is some information that surprises me. For one thing, it suggests the condition of the rental housing stock is much better than I expected. Using a sample of typical buildings, it examines the repair cost of bringing rental housing up to an acceptable standard. However, rather than set out the estimated up front repair costs, it annualizes them. This somewhat disguises just how much money needs to be spent, and what impact such expenditures might have on rents.

I think this is a very important issue, not just for the privately owned rental stock, but also for the non-profit and coop housing. My belief is that thousands of rental units need tens of thousands of dollars of repairs or the units will eventually become uninhabitable…but the money is not being spent. The non-profits/coops like Entre Nous Femmes don’t have the money and private landlords either don’t have the money, or don’t want to spend it since it may require vacating units and charging higher rents (and we all know what sometimes happens to landlords who evict people to undertake repairs…and then seek higher rents…yes, photos of their properties end up on the front pages of local newspapers, along with housing activists and politicians.

(As an aside, it sometimes seems that the landlords who want to fix up buildings and increase rents are subjected to even more criticism than those who allow their buildings to rot or possibly burn down, but maintain lower rents.)

In my opinion, the report does not fully express the seriousness of this issue.

The report also highlights the financial gap between the ECONOMIC rent, and the MARKET rent of new construction. The economic rent is that which needs to be charged to cover the capital costs, operating costs, taxes, etc.

(As another aside, I would invite readers, especially those in the housing and development field, to look at table 29 on page 95 and tell me if you agree with me that some of the cost items seem very, very odd.)

However, notwithstanding these and other criticisms, I think this is an important piece of work, and one which helps explain the housing affordability challenges facing our city. As more and more people need rental housing, the cost of producing it is going through the roof, if you’ll pardon the pun. Sadly, there is inadequately zoned land to accommodate the required housing, and I suspect that we are going to have to be much more innovative in figuring out how to produce more new units, how to repair the existing stock, and how to address the related problems of homelessness, which of course come with a lot of related issues including dealing with mental illness, drug and alcohol addictions.

But that’s another story.


Wendy said...

Michael...what are your thoughts on the fact it only covers Vancouver proper and not the metro area in thinking about affordability.

Yes, some people in Vancouver city pay a lot in rent (or even mortgage payments), but they could pay less if they moved to Burnaby or Surrey, for example.

This document doesn't acknowledge that choice. Or that some people might live in Vancouver because they can avoid car ownership (which is very costly) and therefore paying 40% of income on housing is actually cheaper than 30% but needing 2 cars.

Otherwise, I agree it's a document with lots of good information. A great resource.

Michael Geller said...

Wendy, these are good observations. I understand that Metro has completed its own comprehensive review of rental housing and a new strategy, and hopefully it will be available for public review and discussion. As for living in the suburbs without a car, it is certainly getting easier, but you are right, it's much easier in 'the city'.

Chris said...

Another example of a great report that will be impossible to compile in a few years because the Conservatives are scrapping the mandatory long-form census.

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