VANCOUVER, B.C. – On Tuesday June 11, 2019, Vancouver City Councillor Pete Fry will introduce a motion aimed at using technology-enabled forms of hospitality to support the building of new permanent rental homes.
“There are a number of potential benefits if we can make this work: increased rental housing and funding for it, much needed accommodation units to support our tourist industry; decreased demand for peer-to-peer short term rentals; and increased tax and licensing revenue for the city,” explained Fry.
Fry’s motion asks staff to look at how incentive options, other than the current approach of developer cost levy waivers, might increase creation of new purpose-built rentals by improving financial performance and return on investment for developers; while at the same time addressing Vancouver’s shortage of hotel accommodations.
Specifically, Fry wants staff to explore limited term master leases for tech-enabled hospitality in combination with covenants, split classification tax, licensing, and zoning changes as possible ways to incentivize and secure funding for purpose-built rentals.
Tech-enabled refers to a new type of apartment style hotel accommodations that are minimally intrusive and don’t require traditional amenities like a lobby or concierge.
“We are in a housing crisis; and we need to look at innovative ways to get rentals built,” said Fry. “We’re also on the verge of a crisis in tourist and convention accommodations. If we can use the market to subsidize the building of new rentals, rather than the public purse as we’ve been doing, and at the same time meet our tourism needs, then we should be exploring those options.
“To be clear, the intent is not to convert existing rentals to hotels, rather to incentivize construction of new rentals with a portion of master-leased limited-time hotel units.”
Unlike peer-to-peer short term rentals which are operated out of residential stock by individuals and are difficult to regulate; these units would be run by commercial operators, paying commercial taxes and obliged to be more regulatory compliant.
“For example, if we give a proposed rental building 3 extra floors to serve as tech-enabled hotel rooms; the developer gets a secured lease at higher rates for those 3 floors for say a maximum of 10 years. The guaranteed income will enable them to secure the funding needed to build the project and make it economically viable; after 10 years, the hotel units will revert to long-term rentals. Throughout the lease, the city could be collecting commercial tax rates from the hotel units,” explained Fry.
“And then there’s the added bonus of addressing demand for tourist accommodations by providing much needed moderate price hotel units that the tourism industry says are severely lacking and affecting the number of conferences that come to our city.”
Fry’s motion will be introduced Tuesday, with debate and discussion Wednesday.
-30-
More Information:
Motion: Exploring New Forms of Hospitality and Housing Tenure to Support Purpose Built Rental
