The cost to build new housing, along with higher interest rates, has stalled developments
The City of Vancouver approved a record number of housing units last year, according to a city staff report, but still made the province’s list of municipalities that need to step up their housing game or deal with the consequences. Nicknamed the “naughty list” by the media, the growing list includes municipalities that aren’t delivering housing at a pace to suit demand.
Condo approvals also jumped up since a record low year in 2019. That year, there were 1,930 approvals for condo projects, and in 2022 there were 4,406 approvals. The city’s target is to approve at least 3,000 units a year. He says the concern should be the type of supply that each market needs. That means the policy should look at not just approvals, but the number of construction starts and completions, as well as the number of affordable units lost due to redevelopment.
And approvals don’t necessarily lead to completions, according to developers. This year there is relatively little construction underway and not many new condos for sale. But then the project appeared to stall. Last November, the province stepped in and provided mortgage financing of almost $165-million, which Housing Minister Ravi Kahlon announced this month. The City of Vancouver is waiving development cost levies valued at about $3-million. Mayor Ken Sim embraced the province’s directive to generate more supply. At the press conference for the announcement, he said every type of housing is needed and promise that Vancouver would lead by example.
Hani Lammam, executive vice-president of Cressey Development Group, said higher interest rates and additional costs such as city fees have pushed up how much it costs to build new housing. People can only pay so much, particularly in rent, he says.“The problem is that the formula to build housing doesn’t currently work,” Mr. Lammam said.
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