The City of Vancouver appears to be off to a slow start with meeting the provincial government’s new legislated housing supply targets.
These targets are set under the Housing Supply Act, with the provincial government announcing the targets last fall for the first 10 cities under the legislation.
Between October 2023 and September 2028, the City of Vancouver is required to push 28,900 net new residential units to a state of completion, not merely approvals. This includes specific quotas for housing tenure, affordability range, and size (number of bedrooms per unit).
Each municipal government under the legislation is required to submit regular reports providing an update on their jurisdiction’s progress.
According to a new report by City staff, over the first six month period between October 2023 and March 2024, Vancouver recorded a total of 1,607 unit completions.
At this pace, Vancouver would fall well short of the legislation’s first year target of 5,202 unit completions, which continues a two-year trend of declining completions that first began in 2022 — due to delays in construction from organic construction cycles, higher construction costs and interest rates, the labour shortage, and the availability of materials.
“It is important to note that projects reaching completions in 2024 are measuring applications that began construction 2-3 years ago,” reads a City staff report. “These projects have already worked their way through the municipal permitting process and were approved over the last 5 years or longer.”
Over the first six months, 51% (819 units) were secured purpose-built rental housing and the remaining 49% (788 units) were ownership housing. This near 50-50 split strays away from the provincial guidance of 72% rental and 28% ownership.
When it comes to unit size completions, 18% (193 units) were studio units, 28% (297 units) were one-bedroom units, 37% (402 units) were two-bedroom units, and 17% (185 units) were three-bedroom units. In contrast, the provincial guidance is 40% studio units, 20% one-bedroom units, 18% two-bedroom units, and 22% three-bedroom units or more.
For affordability levels, 99% (808 unit) of the completed rental homes were market units, while just 1% (11 units) were various below-market units. The provincial guidance is 62% market rental housing, 35% at or below housing income limits, and 3% supportive housing.
But City staff expect the rate of completion will accelerate as the first year progresses and for future reporting periods. It is anticipated the impact of recent policy changes by the municipal government to simplify the application and review processes and reform development strategies and zoning will be reflected in the later years of the current five-year provincial target order timeline or into the next timeline.
The next report is due in mid-November 2024 for the period between October 2023 and September 2024, which will provide a full account for the first full year of the target order.
City staff further state there are currently over 31,000 residential units at different stages of application, which exceeds the five-year provincial target of 28,900 units. This includes about 14,600 units recently approved and 8,000 units currently under construction, which follows a record number of rental housing approvals and building permits issued over the past two years. It is anticipated an additional 8,700 units will reach completion over the next five years from the applications currently under review.
The provincial government’s annual targets for the City of Vancouver over a five-year period have been established at 5,202 units for the first year, 10,597 units for the second year, 16,281 units for the third year, 22,349 units for the fourth year, and 28,900 units for the fifth year.
From the target order of a total of 28,900 units, this includes 8,015 ownership homes and 20,886 secured purpose-built rental homes, including 12,992 market rental units and 7,894 below-market rental units.
Within these totals, there are also unit size mix considerations, with the provincial government stipulating 3,001 studio or one-bedroom units, 5,231 two-bedroom units, and 6,209 units with three or more bedrooms.
Another 583 of these units are requested to be supportive housing.
The City of Vancouver’s target alone accounts for nearly half of the combined total of 60,123 units all 10 initial cities under the legislation are required to achieve.
In Summer 2024, the provincial government will announce the target orders for the next 20 municipal governments under the Housing Supply Act, including Surrey, New Westminster, North Vancouver City, Port Coquitlam, Maple Ridge, and White Rock.