The Vancouver Life Real Estate Podcast New Zoning & Government Rebates To Help Housing. Maybe.
On September 14th, Vancouver City Council greenlit the MultiPlex Plan, a sweeping rezoning strategy aimed at introducing more flexibility into residential development within Vancouver. This ambitious plan consolidates nine residential zones into a single R1-1 Residential Inclusive zone, affecting the majority of single family lots in the Vancouver East and Vancouver West areas. There are also some notable areas that are exempt from this and we discuss them mid way through our podcast episode.
The MultiPlex plan allows for between 3 to 6 or even up to 8 units per lot, with a maximum density of 1.0 Floor Area Ratio (FAR) and a building height cap of 37.7 feet, typically limited to three stories. For example, a 4,000 sqft lot could support a 4,000 sqft building.
It's estimated that approximately 65,000 lots will be affected by the sweeping zoning amendment and around 200 multiplexes could be constructed annually, potentially accommodating an additional 1,700 people when they are eventually built. With that said challenges such as infrastructure upgrades, parking solutions, and the impact on local schools & hospitals still loom. So far the City of Vancouver website has yet to provide more detailed information.
Simultaneously, on September 14th, the Prime Minister unveiled the Federal GST Rental Rebate initiative, aimed at incentivizing the construction of purpose-built rental housing across Canada. This enhanced rebate, effective for projects commencing construction from September 14, 2023 onward, until December 31, 2030, increases the GST Rental Rebate from 36% to 100%. Eligibility extends to new purpose-built rental housing projects only.
While the rebate serves as an incentive for rental housing construction, we question whether it’s enough to spur significant growth in the rental housing market. In order to create a more favourable landscape to take a project like this on, measures such as removing rental caps or indexing them to inflation will be required to further stimulate development.
Canada's inflation rate continued to surprise to the upside for the second consecutive month in August, with the Consumer Price Index (CPI) surging to 4.0%, up from 3.3%, surpassing expectations of 3.8%. Looking ahead, it is anticipated that inflation will accelerate for one more month in September before a potential cooling trend in October. Even if inflation maintains an average monthly increase of 0.2% from this point onward, the year-end projection for 2023 points to a rate north of 4%, which is a concerning figure for the Bank of Canada.
This episode has a ton of great value including more information on the record amount of immigration, historic lows for building permits and rising mortgage rates all converging at the same time!
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