A new five-storey rental building in Kits
"You're dropping the ghetto on Kitsilano"
Confusion over high rents at publicly-funded building in Vancouver. Kerry Gold, Globe and Mail.
This is a five-storey purpose-built rental building at 1807 Larch. Comments from the rezoning public hearing in 2019 - “you're dropping the ghetto on Kitsilano.” It's 80% at close-to-market, 20% below-market, with the 80% cross-subsidizing the 20%.
Five years later, Kerry Gold’s story makes it clear that some of the neighbours are still mad about it.
The “publicly funded” part in the headline is that the province provided a low-cost loan to the project, which gets paid back. (Basically using the fact that the province can borrow at lower interest rates.) The condition is that the 80% side has to be restricted to households with incomes in the 50th to 75th percentile range (the provincial middle-income limits). There's separate ranges for couples without children, from $85K to $130K, and for families with children, from $135K to 190K.
I know that close to $200K in household income seems like a lot. But it's far more affordable than trying to buy a $2.5M house in the neighborhood, which requires a household income of about $500K to be affordable, on top of a down payment of $500K. And it's far more secure than renting a basement suite in the neighbourhood from an individual landlord, who can always reclaim the space for personal use.
The argument for incentives to build purpose-build rental housing instead of condos is that people are willing to pay significantly more for condos (roughly 50% more). But then you end up with housing that you either have to be rich enough to own, or that you can rent but provides no security. So in order for purpose-built rental projects to happen, you need more height and density (e.g. six storeys instead of four), low-cost financing, tax incentives (waiving GST/HST, accelerated depreciation), or all three.
A big part of the problem is how long it takes to get approval. When the project was first proposed back in 2018 (six years ago!), market rents were a lot lower. Scarcity has driven them up a lot further since then. I find it amazing that in Edmonton, it’s possible to buy land and deliver housing in the same calendar year.
The column quotes people who opposed the rezoning back in 2019. I found this comment funny:
From the get-go, the Larch Street redevelopment was controversial with neighbours. Judy Osburn, an area resident who lives near the new development, said there was a popular daycare in the basement of the former church’s community space.
“But when this announcement came out, I thought, ‘okay, that’s not a bad thing if we are going to have 80 per cent for middle-income affordable rentals,’” she says.
LOL no. She spoke in opposition at the public hearing on the rezoning.
More
Speakers list for 1805 Larch rezoning, December 2019. An example of Ginger Gosnell-Myers’ observation: “It’s easier to elect a pope than to approve a small rental apartment building in the city of Vancouver.”
Press release for provincial financing agreement, December 2021. “80% of units, totalling 54, will target at- or below-market level rents restricted to middle- income households within the provincial middle-income limits. 20% of units, totalling 14, will be tenanted at moderate-income rent levels and to households earning less than $80,000 per year.”
L2 Apartments. Marketing website for the completed building. “Now pre-leasing, move-in September 2024.”
BC Builds: middle-income public housing. A similar program, providing lower-cost financing for purpose-built rental projects on public or underused land, with 80% of the apartments restricted to households within the provincial middle-income limits, and 20% below-market (cross-subsidized by the 80%).