Developers will be required to provide more rental housing supply through their upcoming developments in Richmond, either through an in-kind contribution that incorporates rentals into their project or a financial contribution towards the pool of funding for city-led projects.
During a public meeting last week, Richmond City Council approved policies that now require a minimum 15% low-end market rental residential floor area in multi-family projects with over 60 apartment units, within the area deemed to be the City Centre Area Plan. This is up from the previous policy of 10%.
For future multi-family projects with 60 units or fewer, the developers will be required to pay rental cash-in-lieu rates, which will be updated every two years.
The new rates vary between the new city centre and outside of city centre categories. They are $8 per sq ft outside of the city centre and $12 per sq ft inside of the city centre for single-family rezonings, $12 per sq ft outside of the city centre and $18 per sq ft inside of the city centre for townhouse developments, and $15 per sq ft outside of city centre and $25 per sq ft inside of the city centre for apartment developments with 60 units or fewer.
This is up from the existing citywide rates of $4 per sq ft for single-family, $8.50 per sq ft for townhouses, and $10 to $14 per sq ft for apartments. According to city staff, these rates (last updated in 2017) are now outdated relative to current housing market conditions, with both construction costs and average sale prices now significantly higher compared to five years ago.
The city cites an analysis by consultant GP Rollo & Associates, which found that these heightened rates are “appropriate” for most developments, including projects developed by smaller builders. The increases are not expected to significantly impact the pace of market developments or create significant financial risks for developers.
To establish fairness for projects already being considered, city council also approved a one-year grandfathering period for in-stream development applications currently being reviewed by the municipal government. Eligible projects can follow previous policies, as long as their application achieves the first reading with city council within one year of the adoption of the amended bylaws.
Vanprop Investments’ project of redeveloping their 50-acre Lansdowne Mall property is expected to be required to follow the new policies. It will be a significant source of new rental housing, with the high-density, mixed-use community projected to create up to 4,500 new homes for as many as 10,000 residents.
At a later time, city council will also consider a requirement to dedicate 10% of the residential floor area to market rental units in multi-family projects with over 60 units.
Under the previous policies, between January 2018 and August 2021, Richmond was able to secure an average of 118 units of low-end market rental housing each year, and an average of 142 market rental units.
The policy changes are expected to grow the average annual totals to about 180 low-end market rental units and 125 market rental units, in addition to market rental units generated through density bonusing.
Since 2007, the municipal government’s Affordable Housing Strategy has secured over 1,500 affordable housing units and $45 million in cash-in-lieu contributions. And separately, the Market Rental Housing Policy has catalyzed about 568 market rental units since 2018.
Roughly a quarter of Richmond households live in a rental unit, and about 1,000 households in the city are on the BC Housing waitlist for affordable housing.
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Source: the Hive, Kenneth Chan