Goodman, Vancouver’s pre-eminent seller of small (and some large) apartment blocks, has raised the alert about a Council motion that emerged from the Rental Incentives Review. The gate-worthy motion instructs staff “to prepare a report for consideration for referral to public hearing” that would extend rental replacement requirements.
…. older commercial properties with three or more rental apartments will be bound by rate-of-change regulations and will have to replace those rental apartments upon redevelopment, including redevelopment to four-storey condos.
A few observations.
If you’re in the hysteria business, don’t -gate your issue. Overuse, like inflated currency, lessens value.
Goodman maintains that this move, if enacted, would “reduce the residual land value of these commercial properties. (This) amounts to a downzoning.” Leaving aside whether that is technically a downzoning, the conclusion is nonetheless “that if you own a C-2 zoned site in Vancouver, your property is on its way to devaluation.”
That, however, doesn’t necessarily mean the price will drop commensurately. It may mean that owners over time won’t get as much a return as they might have otherwise.
It may also mean that these regulations kill off re-development and new rental housing along arterials and in some commercial zones. But it’s hard to get as excited about something that may not happen as it is to protest the loss of existing rental stock.
It’s also hard for those who have seen a spectacular rise in their asset value to receive sympathy if the rise in the worth of their property is consequently less spectacular. Sympathy tends to go to those downstream who pay the increased rents from the spectacular rise.
It’s surprising that the rental replacement policy isn’t already in place for apartments along commercial strips. If Burnaby had had that requirement for its rental stock south of Metrotown, Derek Corrigan might still be mayor. In the current political climate (elections have consequences), it will be hard to persuade the Vancouver council that they shouldn’t take action to protect the rental housing stock.
However, Goodman does possibly raise something gate-worthy at the end of the missive:
“The 5th bullet says to direct staff to report back on:
“The possibility of using zoning similar to the DEOD (Downtown East Side-Oppenheimer) zoning (60% social housing and 40% rental for anything above 1 FSR) to depress land prices so it will be cheaper to buy for non-market housing.”
Gee, I wonder which councillor moved that motion. Announcing that the intent of your policy is to sterilize land values so you can pick it up cheap won’t go down well in in the business community, or in the courts.