Cities all around North America are struggling to figure out how to provide housing for their lower-income residents — not the poorest of the poor, but people making less than the median income for the region. Housing for that group is disappearing and not much new is appearing. A lot of federal/state/provincial programs focus on putting money into housing at the low end.
I’ve been intrigued by Seattle ever since Hani Lamman from Cressey told me about how much rental they’re building there, and the different kinds of programs Seattle uses to reduce rental rates.
Seattle’s not doing everything perfectly. Their street homeless count is close to 3,000. There are no rent controls — renter-protection efforts are focused on making sure landlords don’t discriminate against tenants.
And American cities have advantages we don’t. Their developers never stopped building rental, the way Canadian ones did. (No one can quite seem to figure this why. We had a long debate on Twitter last night, trying to figure it out and there was no definitive conclusion.) As well, the federal government provides a big chunk of assistance through a low-income housing tax credit, which gives investors a tax break for investing in low-income housing.
But Seattle has also been pushing aggressively to create new rentals and rentals that rent for below-market prices. My story here summarizes some of what they’re doing.
6 responses so far ↓
1 A Taxpayer // Aug 31, 2016 at 1:55 pm
Seattle has a rental vacancy rate of around 4% compared to Vancouver’s less than 1%. I suspect the difference in the rates is not unrelated to the fact that, unlike Vancouver, Seattle rentals are not subject to rent controls that makes investment in rental properties in Vancouver less attractive. Not only does this have an adverse impact on supply but the resulting shortages increases the rents for suites that are available, landlords are less attentive to tenant needs since they are easily replaced and there is a subsidy to renters based on their tenure and not on their income. Rarely does meddling in a market not result in unintended consequences and rent control is no different.
2 Lysenko's Nemesis // Sep 5, 2016 at 12:17 pm
This will not help encourage new rentals either:
“The federal government says it is under a legal obligation to put the rights of medicinal marijuana users ahead of the rights of property owners.
Health Canada was responding to criticism from a Coquitlam woman who said she incurred $135,000 in repair costs, caused by mould and damage to her rental property’s electrical system, due to a grow-op in the basement she discovered last year.
She said she was the victim of a $20,000-a-month commercial grow-up run by someone operating with two Health Canada licenses, giving them permission to grow a limited amount of pot for personal use. She had no knowledge of the grow op nor had she given her consent for it to be operated on her property.
And she says new government regulations, brought in last month in response to a Federal Court of Canada decision, will lead to more victims whose rental properties might be severely damaged.
“I don’t want this to happen to other property owners,” said the woman, who spoke on condition of anonymity.
But Health Canada, which took several days to reply to questions about her plight, issued a statement late Thursday indicating that the government’s hands are tied. .”
http://vancouversun.com/news/local-news/despite-135k-coquitlam-cleanup-medical-pot-users-needs-trump-landlord-rights-health-canada
We might be moving forward, fast, to a time when the government will have to house people. I guess the socialists will like that. No more fat landlords.
3 Bill_McCreery // Sep 7, 2016 at 10:57 am
You answered your own question: “As well, the federal government provides a big chunk of assistance through a low-income housing tax credit, which gives investors a tax break for investing in low-income housing.”.
Canada stopped subsidizing rental housing on 12 November, 1981 when they killed the MURB programme. As well, condos were seen by developers as being short term gain with fewer long term responsibilities, then on to the next one… This ‘do it and move on’ scenario is more compatible with most developers personalities.
Making the rental problem worse was the MURB proviso that allowed MURB building to be condominiumised and sold after 15 years.
4 Cindy // Sep 9, 2016 at 11:33 am
I fully agree, Government can meddle all they want but all it will do is make being a landlord unattractive in this environment of high property value gains, it makes more sense to just leave it empty. Why bother dealing with renters. in the end it will be up to Government to become landlords and we all know how bad Government is at running anything.
5 Lysenko's Nemesis // Sep 10, 2016 at 8:41 pm
Lengthy dissertation on the MURB programme.
https://open.library.ubc.ca/cIRcle/collections/ubctheses/831/items/1.0095173
6 Keith // Sep 11, 2016 at 7:28 am
The fundamental economics are terrible in Vancouver. Land prices are number one in Canada, median family income ranks 22nd. Seattle median family income is 14th in the U.S. Given the price of land and buildings, there is no business case to be made for building rental accommodations in this city, unless you are a long term deep pocketed player where conversion to condominiums is the end game.