City vacancies dwindle
Availability of rental housing is down to just 1.1%, with no plan to boost stock
Saturday, March 22, 2008
City councillors will not spend taxpayers’ money on a “redundant” housing needs assessment for Nanaimo, which has seen the rental vacancy rate plummet to 1.1% in recent years.
More than 10,000 people rent their homes in the Harbour City — one-third of the area’s housing stock — but the number of available units has not increased like the ballooning population. To increase, rental stock needs a boost from the provincial and federal government, according to industry experts. Senior governments last provided financial incentives for developers to boost rental stock more than 20 years ago.
Developers find it far more attractive to build condos and new homes, rather than apartment buildings, which show no immediate profit. This slow investment return, coupled with soaring land and construction costs, make rental developments unattractive.
Nanaimo’s social planner John Horn wants city leaders to come up with a plan that will reflect the urgent need for safe, affordable rental accommodation. Politicians shy away from such a plan, though, because “that will give them a goal and people will hold them to that goal,” said Horn.
A housing assessment would give city staff a better understanding of what’s available in the city, allowing them to come up with a strategy to preserve rental housing and find ways to create more, Horn explained.
“We’re efficient in taking crappy stock out of our city, but we’re killing the affordable housing stock,” he said. “Our records show an increase of about 45 units for the past decade. At that rate, you’re not making much of an impact.”
Coun. Dianne Brennan said a needs assessment “is not the highest priority,” but she wants to see a strategy that will encourage developers to build rental units.
Mayor Gary Korpan said staff are working on “dozens and dozens” of studies to be addressed first. “Unless you know there will be an ability to increase the housing stock, what’s there to say about it?” he said.
The number of rental units in the Harbour City and across the country has been on a slow decline for more than 20 years, according to data from the Canada Mortgage and Housing Corporation.
The number of suites in multiple-unit buildings dropped from 4,400 in 1991 to 3,600 in 2007. CMHC numbers do not include single family houses.
There really is no places to rent anymore, according to Horn, who said the remaining rental units will decrease in quality.
“Once you’ve hit that 1% availability rate, there’s virtually no vacancies,” he said. “The quality of the housing stock will not increase because there’s no motive to upgrade because you’re going to rent the place anyway.”
Councillors recently legalized secondary suites but “it’s something we should have done 20 years ago,” Horn explained.
City staff must inspect all of the 1,300 identified suites, a tedious task that will take 30 years if they maintain the current pace of looking at one suite per week.
Korpan and Brennan both called on senior levels of government to introduce more incentive programs that would encourage developers to build rental accommodation. The federal government invested in rental unit construction throughout the 1970s by offering grants and taxation concessions.
But by the mid-1980s, government cancelled programs like Multiple Unit Residential Building deductions and the Assisted Rental Program.
Korpan said there is no sign from Ottawa about introducing incentive plans.