In 2009, as part of the City of Vancouver’s rental housing strategy, CitySpaces undertook a research study on Vancouver’s apartment condominium rental market. The study provides a better understanding of how apartment condominiums have contributed to Vancouver’s rental housing stock and how this role has shifted over time. The study included:
- A profile of Vancouver’s apartment condominium stock owned by investors;
- Analysis on the potential return on rental investment;
- Review of legislation and estimates of rental restriction bylaws in strata condominiums; and
- Identification of investor’s motivations and tenant-owner dynamics in strata-condominium buildings
Approach & Data Sources
The study involved the following:
- A review of BC Assessment data to estimate the share of units that are investor-owned.
- A review of rent data from CMHC’s market rental reports and custom data tabulations from the Census
- A simple cashflow model showed the potential return on investment of a condominium rental in Vancouver.
- A review of Provincial legislation governing rentals in strata condominiums and other data sets to estimate the prevalence of rental restriction bylaws.
- A mail-out survey of Condo Home Owners’ Association members and a telephone survey of homeowners and agents with rental listings.
- Key-informant interviews to consider issues of tenant-owner dynamics and the motivations and factors influencing investors.
The Findings
The apartment condominium rental stock has played a major role in contributing to Vancouver’s rental housing stock. While apartment condominium rentals have higher rents compared to purpose-built apartment units, renters are often more willing to pay a premium for units that are located Downtown and in newer buildings.
Over time, apartment condominium units owned by investors shift over to owner occupancy. However, this loss of units is offset by investors buying newer condominiums. In the study, the share of the stock that is owned by investors remained the same in 2001 and in 2009 (35%). In 2009, there were 23,000 units owned by investors and had the potential to be rented. Roughly three quarters of those units were estimated to be rented (17,000 units).
This research found that rental restriction bylaws have had a remarkable impact on the ability of investors to rent their units. Between 9% and 15% of apartment buildings in Vancouver were estimated to have bylaws that prohibit condominium rentals, that is between 6,000 and 10,000 units that cannot be rented. Another 50% of the stock was subject to partial rental restrictions, affecting roughly 33,000 units.
Recent amendments to the legislation that governs strata condominiums has the potential to limit the effect of rental restriction bylaws on new condominium developments. How this change will ultimately affect the supply of condominium rentals will not become evident for many years.
Project Partners
Significant contributions to the study were made by Urban Futures Inc., the Sauder School of Business, and the Condo Homeowners‘ Association.
Direct link to report on City of Vancouver's website:
http://vancouver.ca/docs/policy/housing-role-rented-condo-stock.pdf
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