UBC Sauder panel explores the state of the Vancouver rental housing market and what can be done to improve supply and affordability
(left to right) Squamish Nation Council Member Khelsilem, Jameson Development Corp. President Tony J. Pappajohn, UBC Sauder Centre for Urban Economics and Real Estate Director Thomas Davidoff, SFU School of Public Policy Assistant Professor Joshua Gordon, and Landlord BC CEO David Hutniak at the Vancouver rental housing: policy and prospects panel discussion event on October 16, 2019.
On October 16, UBC Sauder’s Centre for Urban Economics and Real Estate (CUER) hosted a panel with experts from academia, industry and civil society discussing the current state of rental housing in Vancouver, including challenges on the supply and demand side as well as an assessment of prospects for solutions.
The event took place against the backdrop of Metro Vancouver’s long-running housing affordability crisis. Earlier this year Vancouver was named the second least-affordable city in the world in terms of housing by the Demographia International Housing Affordability Survey, and housing affordability was a major campaign issue for all major parties in the recent federal election.
CUER Director Thomas Davidoff said that events like this annual professional forum provide a unique opportunity for informative interpersonal exchanges among industry professionals, academic researchers and the public policy community.
“Just to hear questions like how are you getting your financing, what is your internal cost of capital, what are the obstacles to development that really matter. Anything we learn about the actual development and investment process is hugely helpful, and events like this one really help us faculty members learn.”
Is rental supply the solution?
Davidoff, who is also the Stanley Hamilton Associate Professor in Real Estate Finance at UBC Sauder, moderated the panel, which included the participation of Landlord BC CEO David Hutniak, Jameson Development Corp. President Tony J. Pappajohn, Squamish Nation Council Member Khelsilem, and SFU School of Public Policy Assistant Professor Joshua Gordon.
David Hutniak opened the panel’s remarks by highlighting the size of the issue. “Understanding that approximately one third of British Columbians live in rental housing, the magnitude of this current rental housing crisis is widespread and negatively impacts the province’s entire economy,” he said.
Hutniak went on to say that political and regulatory obstacles to achieving reasonable returns on investment make rational developers and investors lean towards building condominiums over market rental housing, with several policy changes required to alter those conditions.
Speaking about the potential of rental housing as a neighbourhood-development option, Tony Pappajohn emphasized how affordability concerns are forcing workers, even those working in emergency services, to stretch their commutes.
“I just think the city’s a better city, and a healthier city, a better place to live, when we have diverse people living together in the same neighbourhood throughout the city and not just in certain areas,” Pappajohn said.
Khelsilem agreed that more needed to be done to increase the number and diversity of housing options in the city, and that real estate development represented a unique economic opportunity for Indigenous communities in the city.
“I think we’re also honestly very excited about the ability to entertain the development of rental within the city because we see it as an opportunity to provide that back to the city as well. And that the windfall gains that we’re going to make are not going to us as a private developer, but rather as a community, and those are going to be reinvested back into our community.”
Closing out the panel, Joshua Gordon expressed skepticism that focusing on purpose-built rental housing can be an adequate solution to the city’s affordability concerns. Considering the available data and research, Gordon argued that focusing on rental housing doesn’t necessarily give renters a stronger market position or lower the city’s vacancy rates and housing prices.
“We have 45,000 units under construction. So what is the strong motivation to push hard on rental when we’re already building a ton, and when we’re not even sure that building rental is actually going to improve the vacancy rate?”
Connecting students and industry
Speaking after the panel discussion, Professor Davidoff said that “our number one job is to train students in engaging with the real estate and regulatory and financing community.”
“We have many students here tonight, and they get to meet people in the industry, which obviously helps as a matter of networking. But it also helps them learn about what’s happening in the industry,” Davidoff said.
“The dream is to have students learn in the classroom and then come here and see the link between that and what people are actually doing in the business community.”
“I think that universities have a unique role in creating a place where you can not only get a range of views on certain issues, but also a range of different levels of view. Anywhere from the experience of a consumer, an industry participant, a policy developer, a non-profit organization, and so on,” said UBC Sauder Associate Professor Tsur Somerville, a senior fellow at CUER.
Fourth-year B.Comm. (Finance) student Kathy Gao agrees that events like this panel are a valuable part of the UBC Sauder experience.
“It makes me so happy that the school I’m a part of hosts this kind of events, because I really think that’s a university’s place in public discussion,” Gao said. “These kinds of discussions aren’t really something that corporations or governments can foster on their own, because they all have their own competing interests.”
For those who were unable to attend, the entire event is available to view online through UBC Sauder’s YouTube channel: