09/10/15

Rental 100 has its grand Duke

Incentives to build market rental housing include eased regulations, more density

Source: http://www.vancouversun.com/business/Vancouver+looks+ease+housing+crunch+with+Rental+program/11347998/story.html

The Vancouver-based developers behind a new rental-only building in Mount Pleasant say their mixed-use project will take a bite out of the city’s notorious shortage of rental housing while providing homes for young families who want to stay in the urban core.

The Duke is a 14-storey project on East 11th Avenue near Broadway and Kingsway. When completed in August 2017, it will have 201 homes, all of which will be market rental.

“If Rental 100 didn’t exist, the Duke would be a condo building,” said Peter Edgar, president of Edgar Development Corp.

Vancouver’s Rental 100 program encourages buildings made of 100 per cent rental units. The policy waives the development cost levy, eases parking requirements, relaxes unit size and allows for more density beyond the existing zoning criteria. The city expects the Rental 100 program will help it to create an additional 5,000 units of market rental housing by 2021. Edgar said the company designed the Duke, which will have 4,925 square feet of retail space on the ground level, with more density given the waivers built into the Rental 100 program.

“It makes it more feasible to build rental in a market where, in order to come to the market land values, you typically have to build a condo building,” he said. Mount Pleasant is a neighbourhood that they targeted.

“We like Mount Pleasant and Main (Street) because we think it’s a vibrant neighbourhood and it’s becoming more popular,” he said. “It’s changing a bit, and without looking at a market study, my impression of the area is that it’s full of a younger demographic — I’d say 25- to 30-yearolds and some people starting families live there.”

The Duke will include a blend of modern studios and one-bedroom and two-bedroom units.

“We tried to make it very enticing for families to live in the building,” he said. “The entire rooftop is all amenity space, including a children’s play area and an outdoor dog walk.” An inner yard would also be visible from every suite and covered by a transparent rooftop canopy. Edgar said there are two additional indoor amenity spaces: one for children and another for adults. “It’s more of just a lounge to hang out and be social and have a sense of community,” he said.

Edgar knows well that the city is facing a major shortage of market rental.

“As someone who started his family living in a condo in downtown,” he said, “it’s very difficult to find the right unit to start a family in. I think the Duke offers that possibility.”

The City of Vancouver says it has the tightest rental market and one of the lowest vacancy rates in the entire country, averaging 0.9 per cent over the last three years.

“We are at record lows of vacancy rates in terms of rental in the city, so we are encouraging programs that can enable more rental to be developed,” Vancouver’s chief housing officer Mukhtar Latif said in an interview.

“Over the past five years, when we’ve done the analysis, we saw that five per cent of the new housing starts were rental.”

He said since incentive programs like Rental 100 came into effect, they have seen a shift toward buildings like the Duke.

“We’ve been approving roughly 1,000 secured market rental units a year,” Latif said, adding that now represents 20 per cent of new housing starts in the city. “In the absence of senior government funding, we are limited with resources that we have in the city to encourage and create as much rental supply as we can.”

Developers seeking to have the city’s development cost levy waived for a market rental project must meet the city’s criteria for affordable rental rates, which is $1,242 per month for a studio unit, ranging up to $2,338 per month for a three-bedroom unit.

As for pricing at the Duke, Edgar said they’ll wait to see what the market would bear.

Edgar Development is a relative newcomer to the development scene, launching in 2009. They also have two rental-only residential towers underway in Edmonton, Edgar said.

“We’d like to find more opportunities for purpose rental buildings in Vancouver,” he said, “and I think, going forward, that’s where we’ll be shifting our focus.”