More 2 & 3 bedroom rental housing, not small condos for investors

Condo buildings

Property developers have been allowed to build too many of the one-bedroom condo units that are most in demand by investors, but often wind up sitting empty.

Require More Multi-Bedroom Units.

City Council should insist that at least 80% of the units in any new development have more than one bedroom with 30% having at least three bedrooms. This can be done by creating Family Residential zoning for new developments.

Richmond's otherwise excellent new Market Rental Housing Policy only requires that 40% of the rental units have more than one bedroom. The rationale given for the 40% recommendation is that “approximately 40% of Richmond's renter households are families with children.” The flaw in that argument is that it’s not only families with children who require more than one bedroom. In addition to those, we have:

1. Couples planning to have a child who wish to rent a multi-bedroom unit so they don’t have to move when the child is born.

2. Couples who are senior citizens with health issues that require them to have two bedrooms.

3. Couples or single individuals who increasingly work from home and require a home office.

Also completely ignored in the policy is the huge number of millennials who were brought up in Richmond and are forced to either continue living with their parents or move away from Richmond because they cannot afford to rent a single bedroom unit. They should be able to do what most young people have always done when they move out of the family home and that is to share rental accommodation with roommates to make it affordable. That requires a multi-bedroom unit.

Quite aside from the impact on the family when our youth are forced to move away from Richmond, they are no longer available to fill the entry level jobs in our community. That labour shortage will increasingly impact everyone in Richmond unless we start doing something about it now.

For years, developers have been building the one bedroom units that are most attractive to investors, are the easiest to sell and generate the most profit. Many of them sit vacant. The City has to substantially boost the requirement for multi-bedroom units to bring the rental housing stock back into balance.

Suggestion for Investor Owned Unit Rental Pool

Developers should be able to get fast track approval for their projects by setting up strata rules that require the strata manager to ssume responsibility for renting out, at market rates, all units not occupied by the owner, or a relative of the owner. This can be made attractive to condo investors by having all rent revenue go into a common fund, from which expenses are deducted, and the investors then share in the profits according to the size of their unit. It doesn’t matter if an owner’s unit is temporarily vacant since the cost is shared by all the owners.

Unlike the Vancouver strategy of trying to track and penalize empty condo owners, this would encourage investors to help solve the housing crisis at no cost to themselves.

Under existing and proposed requirements, a certain number of the units in every new development must be affordable housing at lower rents. Rather than the current necessity to find an external manager for these units, the strata manager can manage them along with the investor-owned market rental units.

Get YVR to Build Housing for Its Minimum Wage Workers.

While Richmond is struggling to provide affordable housing for its non-YVR low income workers in small businesses and shops, YVR should be stepping up to provide affordable housing for its own retail, cleaning and food service workers.

YVR has the two essential ingredients for subsidized housing – land and money. A major hunk of the latter happens to come from the very retail, cleaning and food service concession operators and contractors that employ all those minimum wage workers. YVR’s income from concession contracts was over $115 million in 2016.

Subsidized housing for low income workers is infrastructure that ensures there will continue to be such workers. Otherwise, high housing costs will eventually force these workers to move beyond commuting distance.

Affordable Housing Units for People who Work in Richmond

The City could also work with other Richmond businesses to create affordable housing for their workers. With financial assistance from the businesses, the City could ensure that young people brought up in Richmond and with jobs in Richmond aren't forced to move away because of a lack of affordable housing.

Lessons Learned

Tell the developers what you want.
When housing developers show up with a proposal, City Council asks if they are willing to modify it to provide more multi-bedroom units. If City Council offered to fast track developments with 80% multi-bedroom units, more such developments would be proposed in the first place.

Transform investors from a problem into a solution.
Investors who buy condos are a problem because their units sit vacant. Make it easy for them to rent them out and the number of available rental units will increase rather than decrease.

Urge those with resources and a role in creating the problem to help in solving it.
YVR should be stepping up to provide affordable housing for its own retail, cleaning and food service workers. One reason they haven’t is because Richmond City Council hasn’t asked them to.

Other Richmond Issues

Non-farmers have been buying up Richmond farmland in order to build mega mansions that make it difficult to farm the land. Farmland prices are beyond what any farmer can afford.

Details and lessons learned here.

The most effective deterrents are neighbours who know one another and provide advice or raise the alarm when there is suspicious activity.

Details and lessons learned here.

Both immigration and housing prices have increased dramatically. Foreign language signage has been an issue. These have resulted in inter-cultural isolation and mistrust.

Details and lessons learned here.

When councillors don’t know what to do about major problems, they ask city staff to prepare report after report and have a half dozen highly paid senior staff attend endless meetings.

Details and lessons learned here.