Over the next five to 10 years, the Vancouver market could welcome at least 12,500 new rental units if completed as planned through partnerships formed by First Nations groups.
Four specific projects will make sizable enough contributions that collectively amount to a 10% equivalent of the current greater Vancouver rental pool. Comparing the number of new rental homes expected in these projects to the total number delivered across the region in 2022, the 12,500 units represent nearly three-and-a-half years of market-wide new supply. Nevertheless, increase in migration flows will likely ensure that demand outstrips this new supply.
Most of these developments involve in-depth planning processes, from feedback loops with the public to extensively detailed planning documentation. For the most part, these applications will face the same challenges and delays experienced throughout the development community.
Beyond the ongoing debates for the yet-to-be-approved developments regarding their form and function, planning delays will be the biggest impediment to moving quickly toward construction on these projects. The developers will not be deterred and are likely looking toward the recently completed first phase of Lelem Village within the University Endowment Lands near UBC. The development is a Musqueam Indian Band/Polygon partnership that delivered 62 rental units leased out prior to construction completion. Future phases are expected to bring the rental count to 170 units.
The greater Vancouver market has found its way back to pre-pandemic vacancy levels, now averaging 0.7% across the marketplace. Market rent growth over the past year reached 8% overall with asking rates on tenant turnover sometimes reaching 25% greater than what the previous tenant had been paying, according to the Canadian Mortgage Housing Corp.'s rental market report.
Market rents have climbed so fast that new tenants, at times, are paying 40% to 50% more than long-standing tenants who have resided in the building for years. The provincial government has capped rent increases for all existing tenants at 2% in 2023, which helps to explain why the overall average market rent growth was just 8%. Demand and rent control, combined with very few new rental units over the past ten years, has landed the Vancouver market in a dire situation: the immediate requirement for a significant influx of rental housing suitable for a wide range of household sizes.
Outlined below are four First Nations developments that, if streamlined through the remaining planning processes, can add a meaningful number of rental units before 2030. Their success will be further proof that the development concepts, ranging from providing housing to facilitating reconciliation, will provide improvement to the deterioration of housing affordability and livability that plagues Vancouver.
Eighteen months ago, MST Development Corporation and Canada Lands Company revealed two potential options for an enormous 90-acre site known as Jericho Lands in the tony neighbourhood of West Point Grey. Currently, the planning process is between the third and fourth stages, during which the overall site concept is refined.
The development is expected to bring 10 million square feet of floor area, including residential unit counts estimated at nearly 10,000, possibly more. Thirty percent of the units are expected to be rented, with upwards of 80% of the rental units earmarked as market rental and subject to the usual rent control conditions, capped annual increases with opportunities to correct rent, if needed, upon tenant turnover.
Five kilometres due west of the Jericho Lands sits a 10.5-acre development site at the southeast end of the Burrard Bridge. The Squamish Nation partnered with Westbank in 2019 and has conceptualized a multi-tower residential development estimated to contain 6,000 rental units, including 1,200 affordable homes. The development will be known as Senakw. The project's construction timeline estimates suggest completion in five years. Site preparations began in January 2023.
Six kilometres south of the Burrard Bridge is another 21 acres known as the Heather Lands. The site will be developed by MST Development in partnership with Canada Lands. The master plan of the community was approved in May 2022, which will develop a wide range of retail, office, child care, education and cultural space, in addition to the 1,672 units of market rental housing and another 540 units of social housing.
Further east, another 40-acre development, Willingdon Lands is a partnership between Musqueam Indian Band, Tsleil-Waututh Nation and Aquilini Development. The site is along Willingdon Avenue in Burnaby, just south of the TransCanada Highway. Current plans include a film studio along with 17 towers containing 5,200 new homes, 1,040 of which will be market rental, and another 300 affordable.
While none of these developments are at rapid transit stations, all are along major bus routes and within a short distance of Skytrain. In the Jericho Lands case, the development will likely have an integrated Broadway Subway station if the second phase of the Broadway Subway is approved.
Like many cities in North America, Vancouver has a number of primarily single-family neighbourhoods that are considered out of reach for the average resident. These neighbourhoods have often been built over the last 100 to 150 years as enclaves for the wealthy, serviced by higher-end retail high streets, well-funded schools, and where issues facing the city as a whole can be minimized.
These specific large-scale developments are in these well-to-do enclaves but will target their future residents from a wide range of economic statuses. Luxury strata titled residential units will also be included; however, the inclusion of affordable and social housing, as well as a market rental pool, will draw an array of residents as part of the design parameters regarding inclusion.
None of the four developments will displace a single renter or rental building, and each will bring added social mixing and diversity to neighbourhoods that have historically seen few new rental projects and even less new social or affordable housing.
The addition of thousands of new units will release some pressure on the existing rental buildings, pressure that will likely be replaced over the years due to immigration targets set by the federal government at the end of 2022.
Without a significant influx of rental buildings and while welcoming thousands of new residents each year to the Vancouver market, demand will go unchecked, leading to an influx of outbound migrants to other provinces, to be replaced with new tenants at rental rates that could easily be well above the record growth witnessed in 2022.