Rental-only zoning would help supply if done correctly, says developer
Developer Aly Jiwan is optimistic that cities will now be able to zone for rental-only developments
In the B.C. government's throne speech this week, there were many promises about how the new NDP government will improve the housing crisis — including allowing municipalities to create rental-only zones to help increase supply.
That's a promise that Aly Jiwan, CEO of Redbrick Properties — which owns, develops and manages purpose-built rentals in Greater Vancouver— is optimistic about.
"The supply is still very much lagging beind the demand for new rentals," he said.
"We haven't had really any supply of new rental housing for about 40 years."
Jiwan says that the lack of affordable rentals is due to government policies that favoured condos developers.
"What happens is that the condo developers bid up the price of the land much higher than we could afford to pay for the land to build rental," he said.
'It has to be done right'
Jiwan thinks that the NDP government has the right ideas in their platform to be able to increase rental stock in the province.
"However, it has to be done right," he said.
According to Jiwan, there are some key things that cities should consider when allowing for this kind of zoning — such as density and location.
"For example, if they bring in rental-only zones they have to make sure that the municipalities choose the right locations, choose enough sites so they don't undersupply it."
He says municipalities should also be mindful of where the rental zones will be.
"You don't want to ghettoize rental into one area, which is maybe not such a great area."
Furthermore, the locations have to have enough density so that it is economical for the land owner to sell and for the developer to buy.
Jiwan says that single-family homeowners get massive premiums when they sell to condo developers for land assembly.
"You have to be careful because in rental-only zones the dollar per buildable square foot is much much lower than for condos — maybe one third in certain areas."
This is why density is important. It will allow the sale of a home to be lucrative for the homeowners who are selling.
"If they don't sell, nothing's happening."
With files from On the Coast