1 of 2 2 of 2

Ever wonder why rates are high at ‘for-profit affordable housing’ projects that are being subsidized by the City of Vancouver?

Start looking at city hall’s formula in setting rents, suggests housing activist Sara Sagaii.

According to Sagaii, the city “worked the increase into their formula”.

“Not only are these rents not affordable— we already know that—they are also not at average market rent,” Sagaii explained.

Sagaii is with the Vancouver Tenants Unions, and she cites the city’s rental incentives guidelines for reference.

The guidelines set different ‘maximum’ rents for East Side and West Side projects in order for builders to be exempt from paying development cost levies or DCLs.

In the case of East Side developments, Sagaii noted that the rate is not based on average rates in this part of the city, but on citywide averages.

This means that anything built in the West Side will “contribute to increasing rents” in the East Side, Sagaii said.

A footnote in the city’s rental incentive guidelines as it refers to East Side developments reads: “For studio, 1-, 2-, and 3-bedroom units, the maximum DCL rents are the average rents for all residential units built since the year 2005 in the City of Vancouver as published by CMHC in the fall 2018 Rental Market Report.” [CMHC is the federal Canada and Housing Corporation.]

For 2019, the starting maximum rents set by the city for East Side developments are the following: studio $1,607; one bedroom, $1,869; two bedrooms, $2,457; and three bedrooms, $3,235.

For West Side developments, Sagaii noted that based on the guidelines, the city is “intentionally working an extra” cost into West Side rents.

It’s a 10 percent addition, Sagaii said.

A footnote in the city’s guidelines as it relates to West Side projects reads: “For studio, 1-, 2-, and 3-bedroom units, the maximum DCL rents are the average rents for all residential units built since the year 2005 in the City of Vancouver as published by CMHC in the fall 2018 Rental Market Report plus 10%.”

For 2019, the starting maximum rents for West Side developments are: studio, $1,768; one bedroom, $2,056; two bedrooms, $2,703; and three bedrooms, $3,559.

All of these rates start to apply on the day council holds a public hearing on rezoning applications for these ‘for-profit affordable rental housing’ developments.

After the hearing and until the project is built, the developer can increase rents.

Also, the initial rents apply only to the first occupant. After the first tenant leaves, any rent that the market can bear is allowed.

“Is it any surprise then that the ‘affordable’ rents keep going up year after year?” Sagaii asked.