Coquitlam anticipates housing slowdown as new program locked in

With provincial legislation changing the way Coquitlam does business, city council is looking for a path to affordable housing.

The city has until June 30 to lock in new rules around how they’ll handle bonuses for developments that are taller or denser than anticipated – even though not many of those projects are currently in the offing.

“We’re not getting anything built,” explained Coun. Craig Hodge.

If developers can’t demonstrate profitability, they won’t get financing, he said. “They can’t go to foreign buyers to do a lot of presales,” he added.

Council approved 9,753 market rental units and 3,057 below-market or non-market units between 2018 and 2024. Many of those rentals were supplied by developers looking to add a few extra storeys or more units to their projects.

However, provincial legislation established new minimum densities around transit hubs. Those minimums are far higher than the city’s former starting point, which several councillors characterized as taking away the city’s negotiating leverage.

“We desperately need the housing but we don’t have any market,” said Mayor Richard Stewart.

At the moment, the housing industry and the housing finance sector have each “pressed pause,” Stewart added.

Stewart said he hoped the new program would incentivize “a fraction” of the below-market units fostered by the former approach.

Discussing the development slowdown, Coun. Dennis Marsden said bankers tend to left off the hook.

“You’re going to see councillors that will cringe at the amount of profit that needs to be in a project to get its financing,” Marsden said, adding his concerns about councillors trying to tweak a project based on those profit margins.

Coquitlam should look to maintain its good relationship with the development community, Coun. Trish Mandewo said.

“I know there are other cities that actually go and look at the pro formas. I don’t think we want to get into that,” she said.

Council was somewhat divided on the issue of accepting cash in lieu of market rental units.

“We want affordable units. We don’t want cash,” Coun. Matt Djonlic said.

However, both Marsden and Mandewo said they weren’t opposed to Coquitlam accepting cash so long as council has a solid plan for turning that money into housing.

“If developers think that they’re coming to council on large developments that can accommodate below-market rentals and want to do cash-in-lieu instead, they’re going to be in for a rough ride,” said Coun. Robert Mazzarolo.

Cash-in-lieu rates would be reviewed annually by city staff.