The federal government’s latest assessment of Greater Vancouver’s rental market is out, and paints a grim picture for the region’s renters.
Between 2020 and 2021, the vacancy rate in purpose-built rentals fell from 2.6 per cent to 1.2 per cent according to the Canada Mortgage and Housing Corporation’s (CMHC) 2022 Rental Market Report.
At the same time, rents at unit turnover climbed by 2.1 per cent.
Eric Bond, a senior CMHC specialist based in Vancouver, said the report reflects changing market conditions as the region recovers from the COVID-19 pandemic.
Pressure on the rental market is being driven by the resumption of economic growth, the return of both domestic and international students and increased migration to B.C., particularly from other provinces.
That’s all combined to create a market that is “very challenging” for renters, he said.
“If you are in the lowest 20 per cent of the income distribution, it’s really only one in 1,000 units you would be able to affordably rent,” Bond said.
According to the report, the average rent for a two-bedroom unit in a purpose-built rental building climbed last year to $1,824, while the average rent in a two-bedroom condo was up to $2,498.
Andy Yan, director of Simon Fraser University’s City Program, agreed that market conditions reflected a return to the region’s pre-pandemic pattern.
“You can arguably say that it got worse, because not only are we talking about decreasing vacancy but also increasing rents,” Yan said.
Along with the market drivers outlined by Bond, Yan said he was also concerned about pressure on the market from a reinvigorated short-term rental sector.
Yan said on top of making life difficult for renters, the tightening rental market could make things worse for already struggling businesses.
“We’re also going to be facing a labour pressure in terms of where are the workers going to live,” Yan said.
David Hutniak, CEO of Landlord BC, said the report should be a wake-up call to municipal politicians, who need to accelerate the approval of all kinds of rental housing.
“We really haven’t done anything in terms of incentives or tax policy that would make building purpose-built rental more attractive,” he said, adding that some Lower Mainland municipalities appeared to be outright resistant to approving new builds.
With Canada increasing its immigration targets, and British Columbia a perennially popular location for those new Canadians to settle, he said pressures on the market will only get worse.
Hutniak said the debate about what kind of rental and at what price was getting in the way of getting shovels in the ground.
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“This is where we are really getting stuck right now — you go to some municipalities and the debate turns into this whole, ‘Well, market housing, the rents aren’t affordable,'” he said.
“But the reality is they are affordable to a significant cohort, and if that cohort can move into the rental it opens up the older rentals which tend to be more affordable. The affordable rental today was new at some point in time, that’s the continuum.”
The one silver lining in Friday’s report was a slight growth in the overall stock of rental units over 2019.
The report found the number of purpose-built rental units in the region had climbed by just over 1,600 (1.4 per cent), while new starts on rental construction had increased by 31 per cent year-over year.
The number of condo units available for rent climbed by 2,550 (3.3 per cent), slower than between 2019 and 2020.