The development sector is pushing back against Vancouver Mayor Ken Sim’s plan to get the city into the landlord business.
Sim unveiled a pilot project last week to build market rental housing at five city-owned sites, delivering thousands of new homes while also raising non-tax revenue for the city.
But critics say the city — which would be acting as developer, landlord, and regulator and permitting body — won’t have to operate on a level playing field with private companies operating in the same sector.
Vancouver proposes market rental housing
“The city has to avoid the perception of competing, or in fact competing with the private sector,” planner and real estate consultant Michael Geller said.
“I think there is a fear they may be just doing that.”
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Geller rather than getting into the business itself, the city should look at ways to incentivize private developers, such as the layers of fees like development cost charges and community amenity contributions they must pay.
“The question is if the city wants to increase the supply of housing should it just make it easier for private sector developers to build, or should it start building itself,” he said.
Tsur Somerville, a professor at UBC’s Sauder School of Business, argued the city would be better off leasing the land to a market rental developer.
That kind of a business arrangement would deliver cash up front to the city, rather than loading it up with debt that will take decades to pay off before the projects turn a profit.
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“What about the Broadway corridor and the sewage treatment plan makes us think that governments are going to do a really good job of handling these things?” he said.
“The city shouldn’t be in the business of things that the market should do.”
For its part, the city has pledged to work with the private sector to manage and operate the buildings.
The city’s first planned project will be a pair of 54- and 40-storey towers at Hornby and Pacific streets that would deliver an estimated 1,136 rental homes, ranging from studios through three-bedroom units.
The units will be offered for rent at market rates, and means-tested to middle-income individuals and families, the city said.
The city hopes to submit the first project for rezoning this spring, which will require hearings and public consultation.
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