Coquitlam makes strides with rental units thanks to city's affordability strategy
Developer says the city's decision to allow higher density made it financially feasible to construct and manage an apartment building of rental units
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A new apartment building exclusively made for renters is going up in Coquitlam and the developers say it’s all thanks to the city’s new housing affordability strategy.
Redbrick Properties Inc. will break ground on the new building on the border of Coquitlam and Burnaby near Lougheed Mall this Saturday. The building is the first of its kind in four decades, said Aly Jiwan, CEO of Redbrick.
“Greater Vancouver is in a severe housing crisis, we have a shortage of affordable housing options,” he said. “It’s going to provide really good quality housing for people who want to rent as an affordable (alternative) option to buying in that area."
However, Coquitlam mayor Richard Stewart disputes the claim that it's the first, and pointed to a few other projects that included several rental properties.
Redbrick told Metro that although other developments have included rental units, none have been 100 per cent market rate rental units.
For years, developers have focused on building condos, and selling off the apartments to the highest bidders. The model is more profitable than building rental units, Jiwal said.
“It’s much more economical to build and sell out strata condos, and that’s what’s really happened over the last 40 years. Everything has gone to strata condos and we’ve had no rental built,” he said.
In response to the housing crisis in the lower mainland, a number of municipalities have passed legislation that give developers incentive to construct purpose-built rental apartments.
Jiwal said that thanks to Coquitlam’s “relaxation” of its building requirements — which is part of the city’s housing affordability strategy — it’s now financially feasible for his company to build market rental units.
“We’re paying full development costs,” he said. “We’re getting no financial incentive at all, the only relaxations we’re getting under the new housing affordability strategy is slightly extra density and slightly less parking requirements…Underground parking is extremely expensive. It's one of the most expensive parts of a multi-family development."
The building will include one studio suite, 34 one-bedroom units, and six two-bedroom units, all of which will be available for rent in August 2019. Jiwal said he couldn’t say what the rent would be until closer to the move-in date.
“We're anticipating that it's going to be far more affordable than buying a similar unit, in terms of the monthly carrying costs,” he said.
The definition of what is “affordable,” of course, can be debated at great length.
Jiwal maintains that his company can’t make a profit by providing below-market rates, and said it’s up to others to provide this type of housing.
“It's challenging for us to build below market rental, that's why we do market rental. That's maybe for governments and non-profits to tackle, not really for us.”
The average one-bedroom apartment in Coquitlam, Port Coquitlam and Port Moody rents for $1,005, according to Canada Mortgage and Housing Corporation’s annual rental survey, 12% higher than just one year ago.
Housing minister Selena Robinson was unavailable for an interview, but in a statement from her communications coordinator, she suggested that the new building is part of the equation towards solving the housing crisis, and not a solution on its own.
"Market rental projects like this one will provide much needed housing options for people in communities across the province," reads her statement.
"Redbrick’s choice to build purpose-built rental homes for working families in the community is a great example of how the private market can play an important role in providing more affordable housing."