Renters gaining 'upper hand' with incentives, shrinking rents in Metro Vancouver
VANCOUVER -- Where bidding wars and long lineups greeted renters looking for a new home, more options and sinking rates are now the norm — with some landlords and property managers offering hefty incentives for tenants to sign leases.
The COVID-19 pandemic has sent the short-term rental industry, student housing and real estate market into uncertain waters with renters the beneficiaries of increased supply as demand plummets.
CTV News found no shortage of rental listings on Craigslist and other online marketplaces offering “move in bonuses” from $300 to $1,000, plus two months' free rent for one swanky West End development and even a free mattress and linens for a chic Chinatown micro-loft.
“It’s refreshing to see that opportunity for the renters who maybe have more options now, have that slight upper hand where they can get a place that they like — maybe it’s closer to where they work, it’s more suitable for their family,” said realtor and licensed property manager David Hutchinson, who credits the collapse of the short-term rental market with much of the surge in rental supply.
“It seems these Airbnb hosts who were making a lot of money before and of course now aren’t making any are just trying to fill those gaps in and they just want to have their cake and eat it, too — I saw one listing for a 6 month lease, which might work for a few but it’s not going to work for a lot of people.”
The website for the posh Vancouver House encourages prospective tenants to “ask about moving bonus!” (CTV News did ask and has not heard back.) And there are other perks to be had, like the Albert Block Studios in Chinatown, where a 420 square foot studio is listed for $1,700 per month but has a temporary promotion for “a new queen size memory foam mattress (for the Murphy bed), pillows, comforter, linens and towels. AND we are offering in addition a $500 lease signing bonus, deducted from first month's rent.”
While websites like PadMapper have charted a two to four per cent decline in Vancouver rents since the start of the pandemic, analysts say that does little to make a wildly unaffordable city much better for those struggling to keep up with astronomical rents.
“Many of these are also the young renters, we’re talking about and there may be more units that are available although they’re not necessarily affordable, and at the same time there isn’t the underlying employment that supports the payment of these rents,” said Andy Yan, housing analyst and director of Simon Fraser University’s The City Program.
He pointed out that many renters work in the sectors hardest hit by the pandemic, including retail, hospitality and the gig economy, so they may be stuck where they are or even moving back with their parents rather than taking advantage of more convenient or nicer short-term rentals or student-oriented units that are trickling onto the market.
“It’s a complicated economic reality shaping what was already a complicated housing system and I think it’s how these two systems interact with each other — talking about what’s going on in terms of consumer confidence, in terms of whether things like Airbnb will ever recover — that’ll tell what comes next,” said Yan.
The recovery of various economic sectors and whether confidence in tourism will rebound to the point someone is willing to stay in a stranger’s home are all wild cards, though Yan hopes policymakers will take this as an opportunity to take advantage of the changes underway and steer them in a new direction.
“Now it’s an ability to take a pause, take stock of really what has happened and shape public policy in terms of both demand and supply to really deal with what was one of the biggest challenges of living in metropolitan Vancouver,” he said.
For recent UBC grad Josh Lim, the landscape is an optimistic one. An anecdotal result of universities and colleges committing to predominantly online classes in the fall, he’s one of many who report an unexpected variety of offerings on Vancouver’s west side and the Cambie area in particular.
“What normally would be somewhere that would have a huge lineup around Cambie in a prime location, they were really sort of desperate for renters,” said Lim. “I’m definitely seeing a lot of ads just staying there for weeks on end and slowly lower the prices.”
Hutchinson says with the real estate market stagnating, he’s seeing more and more homeowner who can’t get the price they’d hoped for opting to rent their property to long-term tenants instead — at least for the time being. He’s urging them to take a long-term view of their investment, rather than count on near-term profits from short-term rentals.
“The real winner is the good, old-fashioned landlord that just rented their place on a one year lease,” said Hutchinson. “I think if you’re a landlord you want to treat your tenants pretty well right now.”