Housing: Issues and Policy Concepts
A review of housing issues and policy options to help resolve the housing crisis in Abbotsford.
Short Term Rentals (STR) in Abbotsford portrayed by AirDNA on October 10, 2022
Our rental vacancy rate should be greater than 3%. However, based on the Canada Mortgage and Housing Corporation (CMHC) data from 2021, the average vacancy rate for residential rental dwellings is 1.6% in the Abbotsford-Mission Census Metropolitan Area (CMA).
The average rent in 2021 was $1,057 for a one-bedroom and $1,279 for a two-bedroom.
The CMHC data does not include non-commercially zoned units (e.g., basement suites).
Short Term Rentals (STR) remain unregulated in the City, although there is a traditional Bed and Breakfast (B&B) business licensing by-law. According to AirDNA data, the average monthly revenue for an STR in Abbotsford is $1,796 as of October 10, 2022. A monthly rent difference of $739 for a one-bedroom and $517 for a two-bedroom.
Current Situation - Rental Market
Short Term Rentals (STR) in Abbotsford portrayed by AirDNA on October 10, 2022
Our rental vacancy rate should be greater than 3%. However, based on the Canada Mortgage and Housing Corporation (CMHC) data from 2021, the average vacancy rate for residential rental dwellings is 1.6% in the Abbotsford-Mission Census Metropolitan Area (CMA).
The average rent in 2021 was $1,057 for a one-bedroom and $1,279 for a two-bedroom.
The CMHC data does not include non-commercially zoned units (e.g., basement suites).
Short Term Rentals (STR) remain unregulated in the City, although there is a traditional Bed and Breakfast (B&B) business licensing by-law. According to AirDNA data, the average monthly revenue for an STR in Abbotsford is $1,796 as of October 10, 2022. A monthly rent difference of $739 for a one-bedroom and $517 for a two-bedroom.
For an in-depth overview, refer to the KPI: Key Performance Indicators - Housing page.
In my opinion, the City of Abbotsford (COA) broadened the market appeal of our detached homes to speculators, like real estate investment trusts (REIT), through a policy change in 2014.
According to the freedom of information (FOI) request file 0580-20/2022-172 dated August 2, 2022, the COA repealed a policy that discouraged detached housing speculation.
For a residential property to have a secondary suite, the repealed by-law required the building to be occupied by the registered owner of the lot as a principal residence. Thereby limiting the rental revenue potential for speculators, making the property less valuable (more affordable) for homeowners, and consequently, rental rates of secondary units.
Screen Capture: An excerpt from the repealed by-law discouraging speculators.
According to a staff remark [addressed to me] in the FOI file, by-laws were not allowed to regulate people and tenure at the time. However, that does not hold up to scrutiny. And, if accurate, why has the by-law not been brought back during the housing crisis?
For decades municipalities in British Columbia have had by-laws for bed and breakfasts (B&B) operated in residential zones, which regulate people and tenure. In commercial real estate zones, for example, in British Columbia, some municipal by-laws regulate the tenant occupancy of a primary resident owner or operator for mom-and-pop motel properties. My research shows this is typically limited to one unit on the motel property. During the past decade, municipalities in British Columbia have implemented by-laws to regulate short-term rentals (STR), which have varying requirements related to people and tenure in residentially zoned areas.
An excerpt from the 22-PDF page staff report regarding file 3360-30/ZB-001, dated February 3, 2014, outlining conceptual directions for various zoning, states:
"The existing Zoning By-law poses many challenges for both City staff, property owners,
developers, and business owners proposing to undertake improvements to their property
or change of locations."
[Background: Abbotsford Zoning By-law No. 250-1996, which the excerpt refers to, was a consolidation of by-laws from Abbotsford and Matsqui amalgamation in 1995.]
I did not note any references to tenants, first-time home buyers or speculation, nor the words "people" or "tenure" in the staff report.
Reference Articles:
"Repeat buyers and investors behind B.C.'s pandemic real-estate boom: Analysts," by Joanne Lee-Young, Vancouver Sun - January 17, 2022
"Kelowna realtor says speculators are at the root of city's out-of-control house prices," by Wayne Moore, Castanet - April 14, 2022
"'A new phenomenon': Big investors eye Canada's home market, ReMax president says," Chris Arsenault, CBC News - August 3, 2022
A multi-part article, with one part about an international Abbotsford real estate speculator: "Man sleeping in his car says tenants owe more than $31K, won't leave his rental property," by Erica Johnson, CBC News - November 7, 2022
Less Than 90 Days To-Implement Policy Options
1) Speculator Discouragement
In my opinion, the City of Abbotsford (COA) broadened the market appeal of our detached homes to speculators, like real estate investment trusts (REIT), through a policy change in 2014.
According to the freedom of information (FOI) request file 0580-20/2022-172 dated August 2, 2022, the COA repealed a policy that discouraged detached housing speculation.
For a residential property to have a secondary suite, the repealed by-law required the building to be occupied by the registered owner of the lot as a principal residence. Thereby limiting the rental revenue potential for speculators, making the property less valuable (more affordable) for homeowners, and consequently, rental rates of secondary units.
Screen Capture: An excerpt from the repealed by-law discouraging speculators.
According to a staff remark [addressed to me] in the FOI file, by-laws were not allowed to regulate people and tenure at the time. However, that does not hold up to scrutiny. And, if accurate, why has the by-law not been brought back during the housing crisis?
For decades municipalities in British Columbia have had by-laws for bed and breakfasts (B&B) operated in residential zones, which regulate people and tenure. In commercial real estate zones, for example, in British Columbia, some municipal by-laws regulate the tenant occupancy of a primary resident owner or operator for mom-and-pop motel properties. My research shows this is typically limited to one unit on the motel property. During the past decade, municipalities in British Columbia have implemented by-laws to regulate short-term rentals (STR), which have varying requirements related to people and tenure in residentially zoned areas.
An excerpt from the 22-PDF page staff report regarding file 3360-30/ZB-001, dated February 3, 2014, outlining conceptual directions for various zoning, states:
"The existing Zoning By-law poses many challenges for both City staff, property owners,
developers, and business owners proposing to undertake improvements to their property
or change of locations."
[Background: Abbotsford Zoning By-law No. 250-1996, which the excerpt refers to, was a consolidation of by-laws from Abbotsford and Matsqui amalgamation in 1995.]
I did not note any references to tenants, first-time home buyers or speculation, nor the words "people" or "tenure" in the staff report.
Reference Articles:
"Repeat buyers and investors behind B.C.'s pandemic real-estate boom: Analysts," by Joanne Lee-Young, Vancouver Sun - January 17, 2022
"Kelowna realtor says speculators are at the root of city's out-of-control house prices," by Wayne Moore, Castanet - April 14, 2022
"'A new phenomenon': Big investors eye Canada's home market, ReMax president says," Chris Arsenault, CBC News - August 3, 2022
A multi-part article, with one part about an international Abbotsford real estate speculator: "Man sleeping in his car says tenants owe more than $31K, won't leave his rental property," by Erica Johnson, CBC News - November 7, 2022
"Canadian Companies That Own At Least 100 Homes Have Surged With Cheap Money," by Stephen Punwasi, Better Dwelling - November 11, 2022
"Investors made up 20 to 30% of homeowners in some provinces: Statistics Canada," the Canadian Press, Castanet - February 3, 2023
"Half of BC’s New Condos Apartments Are Investor Owned," by Better Dwelling - February 9, 2023
Example report of investor detached housing speculation in Atlanta, Georgia. “They go after every listing under $500,000 … it’s like clockwork:" "The American Dream for Rent," by Brian Eason and John Perry, Atlanta Journal-Constitution - February 9, 2023
"1 in 5 Canadian properties are owned by investors. That makes it harder for 1st time buyers," by Akshay Kulkarni, CBC News - February 11, 2023
Photo: An open house at Summit Tiny Homes in Vernon, British Columbia, on May 25, 2019. Copyright Ross Brown.
When the housing crisis became an issue in the Village of Valemount in northern British Columbia, its council took action.
The Village adopted a temporary use permit, where R.V.s and portable structures (e.g., tiny homes) can reside on residential lots as residences.
Manufactured where trades are abundant and the cost of living is less, tiny homes can offer a more competitive price per square metre.
Abbotsford could adopt a similar temporary use permit to alleviate immediate pressure until the rental vacancy rate exceeds 3% for two consecutive years, with a permanent option for tiny homes.
Photos: The interior of a display home at Summit Tiny Homes in Vernon, British Columbia, on May 25, 2019. Copyright Ross Brown.
Reference Article and Document
"Village of Valemount now allowing people to live in R.V.s for up to 4 years," CBC News - August 17, 2021
Village of Valemount - Policy 83, Temporary Residential Structures
Regulating short-term rentals (STR) is a turn-key solution for the City, discouraging speculators by limiting licencing to primary residents.
In the past decade, other municipalities have completed the research, formation and implementation of STR by-laws in British Columbia.
Among the most comprehensive set of by-laws has been implemented by the City of Penticton. Penticton has regulations for a traditional B&B, plus an expanded size B&B referred to as a B&B Inn. There are three options for an STR business license.
Regulating STRs and updating the existing B&B by-law would provide additional benefits to the City's tourism sector through increased hotel room inventory and tax revenue while offering a more extensive selection of room types, broadening overall destination appeal. Plus, establishing a framework for guest safety and satisfaction and self-employment opportunities for residents through hosting.
Without live data metrics benchmarked against ideal comparables, improving processes within the City for better outcomes, including building permit processing times, will be difficult. I wrote about it in a separate post, Dashboard: Key Performance Indicators (KPI).
2) Tiny Homes
Photo: An open house at Summit Tiny Homes in Vernon, British Columbia, on May 25, 2019. Copyright Ross Brown.
When the housing crisis became an issue in the Village of Valemount in northern British Columbia, its council took action.
The Village adopted a temporary use permit, where R.V.s and portable structures (e.g., tiny homes) can reside on residential lots as residences.
Manufactured where trades are abundant and the cost of living is less, tiny homes can offer a more competitive price per square metre.
Abbotsford could adopt a similar temporary use permit to alleviate immediate pressure until the rental vacancy rate exceeds 3% for two consecutive years, with a permanent option for tiny homes.
- An aesthetically pleasing tiny home trailer, which could include requirements regarding landscaping and a small fenced-off area for the occupant
- Connected to internet, electricity, water and sewer
- Location-based parking requirements (e.g., One parking stall for the small home if not within X metres of a transit line or an all ages and ability (AAA) active transportation corridor.)
- Business licences for a secondary tiny home unit could only be obtained for a homeowner's primary residence, reducing speculation.
Photos: The interior of a display home at Summit Tiny Homes in Vernon, British Columbia, on May 25, 2019. Copyright Ross Brown.
Reference Article and Document
"Village of Valemount now allowing people to live in R.V.s for up to 4 years," CBC News - August 17, 2021
Village of Valemount - Policy 83, Temporary Residential Structures
3) Regulate Short Term Rentals (STR)
Regulating short-term rentals (STR) is a turn-key solution for the City, discouraging speculators by limiting licencing to primary residents.
In the past decade, other municipalities have completed the research, formation and implementation of STR by-laws in British Columbia.
Among the most comprehensive set of by-laws has been implemented by the City of Penticton. Penticton has regulations for a traditional B&B, plus an expanded size B&B referred to as a B&B Inn. There are three options for an STR business license.
Regulating STRs and updating the existing B&B by-law would provide additional benefits to the City's tourism sector through increased hotel room inventory and tax revenue while offering a more extensive selection of room types, broadening overall destination appeal. Plus, establishing a framework for guest safety and satisfaction and self-employment opportunities for residents through hosting.
4) Improve building permit processing timelines
Without live data metrics benchmarked against ideal comparables, improving processes within the City for better outcomes, including building permit processing times, will be difficult. I wrote about it in a separate post, Dashboard: Key Performance Indicators (KPI).
Further Reading
Understanding Municipal Fundamentals
Issues Literature Review - Housing and Homelessness
Urban Development Project Evaluation
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Issues Literature Review - Housing and Homelessness
Urban Development Project Evaluation
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Future Discussion Queue
Missing Middle / Prototypes / Zoning
Property Tax Financial Modelling (Reverse engineer infrastructure financial modelling)
Building Permit Wait Time / KPI / Six Sigma / SOPs / Scaling
Business Licencing for Multi-family Housing
Missing Middle / Prototypes / Zoning
Property Tax Financial Modelling (Reverse engineer infrastructure financial modelling)
Building Permit Wait Time / KPI / Six Sigma / SOPs / Scaling
Business Licencing for Multi-family Housing
Whistler Housing Authority model
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Keywords: Abbotsford, housing, affordability, crisis, rent, rental, vacancy, average, rent, rates, roll, opinion, articles, missing middle, tiny, home, homes
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Keywords: Abbotsford, housing, affordability, crisis, rent, rental, vacancy, average, rent, rates, roll, opinion, articles, missing middle, tiny, home, homes