VANCOUVER (NEWS 1130) – Some developers are warning thousands of units already under construction across the province could be lost if the government introduces stronger vacancy rent controls next year.
According to a new survey by Vancouver-based Urban Development Institute (UDI), home builders may cancel projects if the provincial government introduces stronger controls.
The institute surveyed 30 members who say nearly 13,000 units could be lost if rent increases are linked to homes instead of tenants.
“If there are so many roadblocks in the way, it gets to a point where it becomes impossible to build,” says UDI President and CEO Ann McMullin.
The warning comes as BC’s Rental Housing Task Force prepares to release 29 new recommendations later this month.
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McMullin says Seattle offers extensive tax breaks and the overall approval process is much faster.
“Less than a year,” McMullin adds. “Ours can take three, four, five years. The government wants to build 115,000 rental units over the next 10 years and of course, the development industry wants to be part of building those homes.”
She adds the government should be careful, noting tougher rent controls won’t create more homes.
“You know, intuitively, it might sound great, let’s have rent control, but if you put a price control on anything, if it becomes too onerous, if you make it so costly that the banks aren’t going to lend it to, you if you’re going to demonstrate that you’re going to lose money,” McMullin adds.
The NDP government’s already agreed to limit next year’s allowable rent increase to 2.5 per cent, which is the current rate of inflation. The maximum hike would have been 4.5 per cent under the old formula.
In an email to NEWS 1130, the Ministry of Municipal Affairs and Housing says the task force has been listening to renters, landlords, and stakeholders throughout the province when working on its recommendations.
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“Developers have told us that carrying the cost of the land while they wait on a development approval is one of their top concerns – that is precisely why we are starting to work with developers, local governments, and other stakeholders on a review of the decades-old process. We are committed to making it work better and faster for people,” read the email.
By zoning for rental, the ministry says land costs will be reduced, noting rental developers won’t be competing for land with those building luxury condos.