We Have to Rebut this Vancouver Sun Article. No More “Cherry-Picking”
https://vancouversun.com/business/local-business/developers-oppose-proposed-rent-controls-as-city-of-vancouver-considers-motion-to-protect-tenants
This statement: “(In Manitoba) vacancy control hasn’t had any discernible effect on new rental supply”, found in the above-captioned Vancouver Sun article, is classic “cherry-picking” and completely ignores the broader issues at play in that province and the many nuances of Manitoba’s rent control policies. Arguably, Manitoba has had the most regressive rent control policies in Canada for decades, and throughout that time it has been renters who have suffered with steadily deteriorating and inferior existing supply, and no discernible new construction because of said rent control policies. While they have continued to make “tweaks”, vacancy control is the cornerstone of their regressive rent control policies.
The recent “uptick” in new rental development in Manitoba, if you can call it that, is driven by historically low interest rates and land costs that are a fraction of what we see in Vancouver and many other jurisdictions. Combine these two critical factors with the fact that in Manitoba; (1) rent control does not apply to new builds for 20 years, (2) units with monthly rents above a certain threshold ($1510 for 2019) are excluded from rent controls, (3) Part 9 of their Residential Tenancies Act – Application for Rent Increases, has resulted in very robust above guideline increase activity, (4) they implemented a legislative change to at least permit annual increases to be tied to CPI, and finally (5) they have a program removing vacancy control on 10% of units in any building ever year (subject to a threshold of repairs being undertaken). That is why REITS and pension funds were finally able to have some degree of confidence that building new rental housing in Manitoba was not a complete bust. This is not to suggest that they are not hedging their bets because of the continued uncertainty around what rent control legislative shoe could next drop. This continuous uncertainty ensures that they are very cautious and will not over- build supply which, in many ways, further exacerbates the vacancy situation. Furthermore, out of necessity, what little they are building is hardly “affordable” rental because they need to aim for the higher end of the market to help mitigate their risk plus, most of these new units are not family friendly, again to mitigate risk. Is this what we want?
Pointing to Manitoba’s rental legislation, and vacancy control in particular, as the “panacea” for British Columbia is full of folly, ignores the many other very significant factors that influence the tepid new rental development they are experiencing and, more critically, ignores the basic premise of supply and demand (which is why we have a rental housing crisis in Vancouver in the first place). We need to build more secure purpose-built rental housing in Vancouver and across Metro so that we can get to a balanced vacancy rate and provide housing options for current citizens, the 50,000 new residents coming to Metro each year, the record number of international students coming here, the 5,000 Amazon workers on their way in the next two years, and on and on and on. Our economic future depends upon it. Where are we going to house all these people if we don’t have a legislative environment conducive to building a ton of new purpose-built rental housing?