Canada's Housing Bubble

Dec 28, 2009 Toby Gorman  Nanaimo News Bulletin

Rental unit availability creeps above 3 per cent.

The availability of rental housing in Nanaimo increased substantially over the last year, according to the Canadian Mortgage and Housing Corporation.

After a record-low dip to 0.65 per cent in the summer of 2008, availability has increased to 3.4 per cent for all types of rental units.

An increase in rental supply, mainly from investor-owned condominiums and secondary suites, and a softer labour market pushed vacancy rates, according to CMHC.

Nanaimo city council voted to allow granny and secondary suites in homes in 2008, increasing the rental inventory.

While the increased availability provides relief for renters looking for apartments, that might not be the case residents of Seacrest Apartments on Chapel Street.

In March 2008, Seacrest’s owner, New Look Capital, applied to the city to have the 109-unit building converted to condominiums to help pay for $8 million in required upgrades.

That application was never approved and many on council pointed to its policy that apartments could not be converted if the vacancy rate was less than three per cent.

With the rate now at 3.4 per cent, New Look has re-applied.

“If it’s successful, a lot of people would be displaced,” said John Mundy, a resident at Seacrest. “Even with the vacancy rate up, I think people would have a hard time finding accommodation. A lot of people live here because they work in services downtown and they can walk to work. Hopefully city council sees that when it comes before them again.”

Mundy says he knows of at least 15 to 20 new tenants who would be forced to move again if the units were converted to strata condos.

Current occupants would have to either purchase their units, rely on new owners to let them stay or move.

An application will likely take a couple of months to process before it goes to council. A representative from New Look was not available for comment at press time.

Keith Brown, a consultant planner who previously worked with New Look, said he would expect the city to honour its own policy.

“The vacancy rate will likely continue to climb, especially with secondary suites now available. So based on its decision last year, you would think they would realize this is a two-way street and allow the conversion. However, it is council’s decision. Just because the rate is higher doesn’t guarantee council will allow it.”

New Look previously stated the conversion is needed to pay for seismic upgrades and a sprinkler system.

In its application in March 2008, the company also included a $1-million incentive to go toward building a 35-unit low barrier housing unit.