If there was political will, the City of North Vancouver would ask developers to offer 20 per cent units for 10 per cent below-market rentals in perpetuity—but that would require a trade-off, which means offering extra density and reducing community contributions.
More than 20 per cent below market rentals requires trade off, consultant tells CNV
This was the succinct message a city-hired consultant gave to council in June. CNV hired Coriolis Consulting Corporation in March this year to do an analysis on whether it would be feasible to implement a new zoning program that would creating more rental stock for a longer period of time.
The push for the analysis came from a motion brought forward by Councillor Rod Clark, who last year called upon the council to back him in reserving 20 per cent of new units, including condos, at 10 per cent below-market rates in perpetuity. The council needed to build the city according to the needs of its residents, Clark argued at that time.
With 50 per cent of the city’s residents as renters and only 0.3 per cent vacancy, the council supported his motion to investigate if it would be feasible to extend the city’s 10-10-10 (10 per cent of rentals, 10 per cent below market rates for 10 years) policy on rentals, also known as mid-market rental.
Blair Erb, the vice-president of Coriolis, said if the city pushed the MMR to 20 per cent, it would start a spiral of events that would eventually make a project unviable. Pushing the MMR to 20 per cent reduces the amount of money a developer can afford to pay for a site, which in turn reduces land values.
If the land values decline, there are fewer sites available for redevelopment, which reduces the pace of new development and hence fewer MMR units are available, which can push rental rates upward, creating a scenario exactly opposed to what was intended.
“There is a certain trade-off here because MMR is linked to how much bonus density is available. If you want 20 per cent of units below-market rentals, we suggest you waive off the community benefit contribution or consider giving bonus density to see that happen,” he said.
For rental projects, there is an opportunity to have more than 10 per cent units. MMR unit potential, he said, was higher at wood-frame rental projects than concrete rental projects due to differences in construction costs.
The city also has some flexibility to extend existing 10 per cent requirement to the life of building in rental projects, but asking for more than 10 per cent units in rentals will be challenging, he Erb said.
Councillor Clark said there was still scope for rental pool to be built up slowly. He cited the example of Vienna, where he said as many as 30 to 40 per cent of rental units were affordable.