the realities of realizing rental development...housing was luxury housing 30 years ago.”...
TRANSCRIPT
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The Realities of Realizing Rental Development
A Newcomer’s Experience…
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Rental Development Will Continue To Gain Popularity
• Low interest rates
– Canada 5-yr bond yield 0.675%
• Municipal encouragement
– STIR
– Rental100
• Increasing rents
• Declining vacancies
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Rents Have Room To Grow
Divergence between cost of ownership and cost of renting. Price to rent ratio: 57
Source: The Canadian Real Estate Association (CREA) - Home Price Index (Composite Benchmark), Housing Market Information Portal - Primary Rental Market Median Rent
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Calgary
Source: The Canadian Real Estate Association (CREA) - Home Price Index (Composite Benchmark), Housing Market Information Portal - Primary Rental Market Median Rent
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Price to rent ratio: 31
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San Francisco
Source: Zillow Home Value Index - All Homes (Metro area), Zillow Median Rent List Price - All Homes (Metro area) 5
Price to rent ratio: 19
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New York
Source: Zillow Home Value Index - All Homes (Metro area), Zillow Median Rent List Price - All Homes (Metro area) 6
Price to rent ratio: 11
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Possible Conclusions…
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a. Vancouver is an unaffordable place to buy
b. Vancouver is an affordable place to rent
c. Increasing house prices will drive new market segments into the rental market, with different tastes, values, and needs
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“Re-branding” Vancouver Rental
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Example: Via6 Apartments in Seattle
• Completed: February 2013
• Building features
– TanakaSan Asian American Restaurant
– Urban market and deli
– Coffee and juice shop
– Barbershop
– Bike store and repair shop (“ViaBike club” membership)
– Bike wash and bike storage
– Concierge (laundry and reservation assistance)
– Dog “relief” and wash areas
– Fitness centre
– Theatre and gaming room
– Indoor/outdoor pavilion with BBQ
– Work/lounge area
Source: Via6Seattle.com 9
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Important to Build Variety of Rental Housing Types, Including “Luxury” Rental
• Amid housing unaffordability, options become rental, downsized expectations, or long commute times
• Rental can be re-branded as a viable lifestyle choice, not as second-best option to home ownership
• Rental today is relatively affordable, building more makes it more so
• Rental is key to a diverse economy and talented workforce
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“That means the luxury housing being built today will contribute to the middle-class supply 30 years from now; it means today’s middle-class housing was luxury housing 30 years ago.”
Affordable rental today requires municipal incentives. Otherwise, long-term quality will be compromised.
Cities Can Help by Planning for Needs of Tomorrow
Source: The Washington Post (California Legislative Analyst’s Office) 11
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“…in the Bay Area since 2000, the researchers found, low-income neighborhoods with a lot of new construction have witnessed about half the displacement of similar neighbourhoods that haven’t added much new housing.”
Building Market Rental Increases Affordability
Source: The Washington Post (California Legislative Analyst’s Office). Displacement: population growth + decline in low income households
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Thank You