More and more I hear how tight the rental situation is in Vancouver and some of the bottom end of vancouver real estate is being purchased by parents for their student kids or first time buyers who are paying hight rents and by young people moving into the province.
This article recently appeared in the Vancouver Sun.
An “extreme shortage” of studio and one-bedroom apartments in Vancouver is driving parents, students and pet owners out of the rental market and leading to lineups for the city’s few vacant suites.The vacancy rate for bachelor suites has plummeted to 0.3 per cent, compared to the national average of four per cent for major Canadian cities, according to the most recent data from the Canadian Mortgage and Housing Corporation.
Vacancy rates for studio and one-bedroom apartments have been below one per cent in Vancouver since 2006.
Amanda Kent (left) and Alexis Twiddy are two potential renters that were out of luck when they attended a viewing of a one bedroom apartment in the 2000-block West Third Avenue in Vancouver.
“The market is astoundingly tight; 30, 40, 50 people are lining up trying to get into one apartment,” said David Goodman, a Vancouver-based rental housing expert. “It’s reached extreme levels of shortages.”
The city’s rental shortage is now a chronic condition, according to Kennedy Stewart, a researcher at Simon Fraser University who is authoring a study of rental affordability in B.C. municipalities. “It comes with urbanization,” he said.
“A chronically low vacancy rate is the sign of a city that has to adjust its expectations of lifestyle,” he said, adding that people who want to live in high-density areas of “a teenage city” like Vancouver may have to sacrifice living space, vehicles and even furry friends until the new buildings age and owners aren’t as concerned about maintaining their pristine condition. “Older cities have a much more flexible housing stock … we still haven’t developed that yet,” Stewart said.
The situation for tenants is the worst it has been in almost a quarter of a decade, said Martha Lewis, executive director of the Tenant Resource and Advisory Centre. The last year and a half it’s gotten especially bad,” Lewis said, adding that more than half the homes in Vancouver are rental units.
Pet owners are in an especially tough spot. Before 2006, there were no provincial regulations that addressed landlords, tenants and pets, but changes now allow property owners to “choose to not have pets” or charge a deposit, said Marg Gordon, CEO of the B.C. Apartment Owner’s Management Association.
The “housing wanted” section of Vancouver’s craigslist, a community website of classified ads, is littered with “housing wanted” posts from pet owners who are having trouble finding a home.
The situation is only going to get worse if the real estate market continues to slow down and rental properties become even less appealing to own as property appreciation declines, Gordon said. “Landlords are at the point where they can’t afford to be landlords anymore,” she said.
Murray Richardson owns three properties in Vancouver and says he’s losing money because rents aren’t going up as fast as his costs, adding “nobody wants to hang on to rentals.”
It will take nothing short of a legislative and logistic overhaul to fix the “rental crisis,” said Coun. Peter Ladner. The mayoral candidate said federal laws implemented in the 1970s that stripped landlords of tax incentives other business owners enjoy was a “short-term stop-gap remedial measure” that’s been around too long and needs to be changed to make rental property management in cities like Vancouver appealing again.
Perhaps some vancouver real estate sellers should delist their condos and rent them out for a couple of years.
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Real estate sellers can delist and rent their properties but if they have purchased in the last 3 or 4 years they will hemorrhage cash profusely since even in this tight rental market they will only be able to recoup about half their mortgage payment. You can’t take a 40 year loan to pay your rent and house (or downtown apartment) “values” are easily 6 to 7 times the median family income. Statistically, renters earn less than the median so good luck renting that 800 sq ft condo for $4,000 per month to cover that mortgage!
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