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The development sector is expressing concern regarding Vancouver Mayor Ken Sim’s recent initiative aimed at having the city engage directly in the rental housing market.
Last week, Sim announced a pilot program designed to construct market rental housing on five city-owned properties. This initiative aims to provide thousands of new residences while concurrently generating revenue without raising taxes.
However, dissenters argue that with the city taking on the roles of developer, landlord, and regulatory authority, it could create an uneven competitive landscape compared to private sector firms also working in this field.
Michael Geller, a planner and real estate consultant, emphasized the importance of avoiding the appearance of the city competing with private enterprises. “There’s a concern that they might indeed be positioning themselves as competitors,” he remarked.
Geller suggested that rather than entering the development sphere, the city should consider strategies to motivate private developers. He highlighted the complex fees imposed on these developers, such as development cost charges and community amenity contributions, which could be streamlined to facilitate more private housing projects.
“If the city aims to boost housing supply, the focus should be on easing private sector development rather than embarking on building initiatives itself,” he added.
Tsur Somerville, a professor at UBC’s Sauder School of Business, supported this view, advocating for the city to lease land to private developers instead. He argued that such an arrangement would yield immediate financial benefits for the city without the burden of accruing debt that would take years to repay before achieving profitability from these projects.
“Past experiences with city-managed projects raise doubts about the government’s effectiveness in these areas,” he observed, referencing issues like the Broadway corridor and sewage treatment initiatives.
Somerville further contended, “The city should avoid engaging in activities that the market can manage effectively.”
The city administration has stated its intention to collaborate with private-sector partners to oversee the management and operation of the proposed developments.
The inaugural project on the city’s agenda involves constructing two towers—one with 54 stories and another with 40 stories—at the intersection of Hornby and Pacific streets. This development is projected to provide approximately 1,136 rental units, which will range in size from studios to three-bedroom apartments.
According to city officials, these units will be priced at market rates and will also be accessible for middle-income families and individuals based on income assessments.
The city anticipates submitting its initial project proposal for rezoning this spring, a process that will involve public hearings and consultations.
Source
globalnews.ca