British Columbia·Analysis

Vacancy solution for Vancouver? Tear down old rental buildings

Is it time to end a near decade-long moratorium on tearing down old, low-rise rental buildings?

More rentals needed: Vancouver's rental market paradox — too many buildings, too few units

A row of low-rise buildings in the area of 10th Avenue and Granville Street in Vancouver. (CBC )

In the rules of Vancouver real estate, there's an unofficial 11th commandment when it comes to rental buildings, says analyst David Goodman.

"Thou shalt not tear down under any circumstances."  

And now, he says, is the time to break it.

David Goodman, a real estate marketer in Vancouver since the 1970's, produces The Goodman Report into the rental market and rental buildings in the city. (David Goodman )

Vancouver's chronically low vacancy rate —  0.6 per cent according to the City of Vancouver  — means wild competition for any available rental scrap.

It's depressing, but we're desensitized. Stories about crowds of hopeful renters packing showings, many who come with deposit cheques in hand, seem to be old news.

It's now so competitive the Tenant Resource and Advisory Centre is even offering a new course on how to market yourself to a potential landlord — how to dress, what to say, what insurance to buy, even how to make a 'pet resumé.'

David Goodman, a well-known Vancouver real estate marketer since the 1970's, who authors a quarterly report on the rental market, calls it a crisis.  One that can only be solved, he argues, by ending a freeze on tearing down old rental buildings in the city of Vancouver.

Too few units, too much space

While many Vancouver renters live in privately owned condos or suites in houses, dedicated rental buildings are seen as offering long term security and better protection from rising rents.

It's why there are growing calls from both sides of the political spectrum for city hall to re-think its policy on preserving existing rental stock — at all costs.

David Hutniak is the CEO of Landlord B.C. He says at least 80 per cent of the city's rental buildings are low-rise, three storey walk-ups about a half a century old.

The vast majority of rental buildings in Vancouver were built half a century ago, when three stories was the norm and no one was concerned about maximizing density. 

In fact, at least 80 per cent of purpose-built rental buildings in the city fall into that category, says David Hutniak, who as CEO of Landlord B.C. represents many of those building owners.

"A lot of land that exists is sitting under three storey walk-ups, and there's regulations preventing tearing them down."

In other words, too many buildings with too few units are taking up too much space. 

If they were torn down bigger buildings — with many more rental units — could replace them.

End the moratorium

Since 2007, the City of Vancouver, for the most part according to Goodman, has effectively held on to a moratorium on the demolition of low rise walk-ups. A rate-of-change bylaw since the 80's has always protected old rental stock, but the outright freeze, says Goodman, has paralyzed the market.

"They are suppressing, artificially, the growth of these areas, [by] protecting existing tenants, but penalizing the waves of new people coming in to the city."

Goodman's blunt assessment: a series of news stories almost a decade ago about people being forced from their apartments by landlords who wanted to renovate the units, and subsequently charge much higher rents, pushed the city to ban demolitions altogether to avoid the bad press.

Goodman says it would have been better for the city to find solutions for evicted tenants, but instead, he notes the moratorium still exists today.

Protecting affordability

Vancouver's chief housing officer, Mukhtar Latif, says the city has indeed taken a position on affordability — preserving low-rise buildings, guarantees rent protection for current tenants.

Vancouver's chief housing officer Mukhtar Latif says the city has approved a number of recent projects that will lead to the creation of thousands of new rental units. (City of Vancouver )

"How do we protect existing stock whilst new stock is created? You can't go in and knock down a whole bunch of rental stock without having new supply there."

And Latif says in spite of the moratorium on demolitions, the city has found other ways to create new rental units. Various projects have been approved over the past few years, and by 2019 about 5,000 new purpose-built units will have been built. 

Goodman says that's not nearly enough.

He estimates the city could use 3,000 new, ready-to-move-in rental units each year to keep up with demand and slowly lift the vacancy rate.

And at the very least — he says loosening the rules would allow owners to upgrade their deteriorating buildings but spread the costs among more units and more renters, while still keeping rents reasonable.

"Owners are saying, 'David, I have to put another roof on this building, it's a piece of crap. I have to re-pipe my building, put new windows on, and yet I can't get any more rental income. In other words, the city is saying to me, 'Upgrade your buildings. We don't care what your rate of return is. You have an obligation to fulfil to tenants."

Old buildings, new era

The Tenant Resource and Advisory Centre acknowledges the need for more purpose-built rentals and the need to update the existing stock. 

"I don't like the idea of displacing tenants, and I don't like the idea of illegal 'renovictions," says Andrew Sakamoto, the group's executive director.

"But if we are to go down that road, I would like to see it done the right way — compensation based on length of tenancy, help with relocation costs, the right to come back to your rental at a similar price."

For David Goodman, it sounds like a compromise in the making. The housing market is hot. Developers are making money — even feeling generous — and, Goodman says, most accept they have a responsibility to ease renters into the transformation. 

He says there may never be a better time to start the process of bringing old rental buildings into the modern era.

About the Author

Salma Nurmohamed is a senior producer with CBC News. She has been a reporter and an assignment editor. Currently she is an editor with the digital team.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.