More rental housing in the City Centre rather than strata condos for investors

Condo buildings

Large housing developments are building strata condos for investors rather than rental housing for young people and families.

The Problem

There is an acute shortage of market rental housing units in Richmond's City Centre near public transit and Council only makes token efforts to do something about it. Young people brought up in Richmond can’t afford to live here. Neither can many first responders, hospital staff and City employees providing essential services.

Only 26% of Richmond’s housing units are rentals compared to Vancouver where it's 53%. The historically ultra low vacancy rate of 0.5% increased to 2% in 2020, but average rent still increased 5% despite BC Government Covid rent controls. [Source: CMHC]

Although developers will make the most profit from selling condos to investors, they can also make a decent profit from purpose-built rental buildings by selling them to pension plans that want a long-term steady return from rents rather than a quick buck.

The Solution

The BC Government gave the City the power to zone particular buildings for rental tenure only precisely because it recognized that property developers can make large profits faster by selling strata condo units to investors, who often leave them vacant while waiting to profit from a rapid rise in land value. Rental zoning stops the rise in land value compared to land zoned for condos for sale.

Richmond City Council should zone majoor new housing developments like Polygon Talisman Park and Lansdowne Centre for 65% market rental, 10% below market rental and a maximum of 25% strata condos for sale.

Lowering Rents

Large developments of purpose-built rental housing under central management result in economies of scale that reduce operating costs and keep rents down while providing a reasonable profit to the owners. An individual condo owner renting out one condo has much higher costs and must charge higher rents.

Family Friendly Multi-Bedroom Rental Units

Richmond's 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.

Other Richmond Issues

Our supermarkets are importing food rather than buying food produced locally. There are steps Council can take now to turn that situation around.

Read more here.

In this time of financial hardship due to Covid, property tax increases should be kept close to the rate of inflation which is forecast to be 1.6 – 2% in 2021.

Read more here.

There should be much higher fees to remove large trees that provide shade, oxygen production, carbon storage, bird and animal habitat, and natural beauty.

Read more here.

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.

Read more 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.

Read more here.